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Harvard Business School professor, Robert Simons, argues that to stay ahead of the pack, you must translate your competitive strategy into day-to-day actions that will enable your company to win in the marketplace. His new book, Seven Strategy Questions: A Simple Approach/or Better Execution sets out the key questions you must be asking yourself as you look towards the future and rejuvenate your business strategy.

Question 1 - Who is your primary customer? Most businesses recognise the need to serve customers well. But how do you achieve that essential goal in a way that gives you a sustainable competitive advantage? The first step is to establish a clear picture of your target market and more specifically, your primary customer. This provides the focus for reallocation of resources to deliver maximum value to that customer.

Question 2 - How do your core values prioritise shareholders, employees, and customers? Surprisingly, there is no single right or wrong answer here. It may be your philosophy to treat your employees as the number 1 priority - moulding and nurturing them to carry your flag and take care of the customer and the bottom line. This question is important because there will often be trade-offs between these three pillars of success. When it comes down to the crunch, who does come first? Is it the customer, the employee or the return to the owner? Decisions on how to handle these trade-offs may vary greatly depending on the priority of your core values. This will define your organisational culture, drive decision-making and ensure consistency in behaviour as you build and maintain your reputation and position in the market.

Question 3 - What critical performance variables are you tracking? The emphasis here is on "critical". Simons dispels the myth that the more you measure, the better. You simply do not have the time. Rather, try to imagine what could go wrong with your strategy that would cause your business to fail in a few years time. This will pinpoint the things that you need to measure and track. Systems and accountability can therefore be aligned to the most critical aspects of performance that require your ongoing attention to ensure success.

2011 The Learning Wave Limited

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Question 4 - What strategic boundaries have you set? If you wish to engender an innovative, entrepreneurial business culture, it makes sense to allow creative freedom within established limits. In other words, tell people what they can't do rather than what they can do - then allow them to be creative and innovative within the established boundaries. Question 5 - How are you generating creative tension? If you are looking to redefine your business, you must be open to new ideas. Creative tension is the fuel for innovation. What have you done to provide a sense of urgency, compulsion or excitement that will bring about the change necessary to take your business to a new level? Question 6 - How committed should your employees be to helping each other? Know what work environment is best for the wellbeing and productivity of your employees. Common goals and objectives will help your staff to work together and share responsibility for your company's success. Incentives must encourage employees to work together in the best interests of your business. You know you have it right if you pass this test: What works for the staff benefits the business and vice versa. Question 7 - What strategic uncertainties keep you awake at night? If everything were controllable and there were no outside influences, the above would provide a framework, ground rules and focus to help you nut out the detail of your revised business strategy. However, it is normally the uncertainties that keep you awake at night. Ensure that you have the mechanisms in place to review these constantly as new issues will arise as previous ones are resolved. Communication channels must be in place to ensure that everyone is attuned to the uncertainties. Conclusion The strategies themselves flow from the answers to the above questions. In this increasingly technological age, Simons stresses the importance of face-to-face discussions as you work with others to reinvent your business. He argues that this is the best way to understand how others feel about your business, its priorities and, its future. An effective strategy will ensure that you channel your resources into the right efforts. Simons writes, it's about "tightening your business thinking" and avoiding "unstated assumptions that, if poorly conceived, can sap your business of its energy and potential."
Source: Financial & Business Advisor: January-February 2011

2011 The Learning Wave Limited

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