An effective choice-focused strategic Fig 1: Companies should only choose to excel in
Blue Insight process positions an organisation to make sustainable strategic decisions. A one value dimension.
Focus: Creating a Winning Strategy strategy is the chosen way to win in an
environment. If the environment is not The three essential leadership questions defined, it is difficult to assess the quality we usually phrase when meeting senior of the strategy, hence rejecting a bad executives are: strategy or improving a good one. A bad • What is the environment in which strategy often ignores the power of choice our organisation must compete and and focus, and compensates by trying to win? accommodate a multitude of conflicting demands and interests. A good strategy, • What are those few things our in contrast, works by focusing energy and and customer intimacy. Market leaders organisation must do outstandingly resources on one, or a very few, pivotal only excel in one value dimension, since well to win and keep on winning in objectives, which accomplishments will the operational models are inherently this environment? lead to a cascade of favourable outcomes. different in the different dimensions. In • How will we mobilise our organisa- Surely, you do not want your manage- the other two dimensions, the company tion to implement these things faster ment team to bounce around between has to perform above threshold standard and better than our competitors? different topics, never digging in and un- as well as working continuously with This Blue Insight explores the second of derstanding the core business and what operational efficiency. See fig 1, page 1. these essential questions and elaborates it means. Successful companies maintain Strategy can be said to be the art of on how to make the right strategic choice focus and sustain profitable growth, while making the most intelligent choices through a clear articulation of custom- others get lost in a diffusion of possibil- er focus, winning proposition and key Strategic choices will help a company use ities. Companies, which lose opportuni- priorities, in order to win in the chosen its limited resources to win the competi- ties, are most often unfocused and have environment1. Key challenges for the tion for value creation. Making strategic lost track of the most important things at leadership team in this endeavour are: choices and sticking to them is difficult. the centre of their core business. It takes courage to choose one course of • Creating a sense of urgency and direct The one with the best insights is likely action over another and to stick to the attention to what is important. to win decision when the pressure of daily busi- • No lasting success has been built Knowledge equals power as the old ness tempts to blur the focus. without an intense focus on the right saying goes. But today when the distinc- To remain competitive today, while also things. tion between true knowledge and mere preparing for tomorrow, is not simply a • Developing a clear focus is something information has become more important question of getting out of one strategy that most companies find extremely than ever, there is a dense information and into another. On the contrary, you hard to do. jungle to pass through in pursuit of find- must decide how to maintain the existing The world serves a never-ending series of ing knowledge to be converted to usable business profitable in order to buy the temptations, distractions, doubts, and un- insights. Every business breakthrough time needed to adapt to the new model. certainties. At the root of strategy lies the starts with a unique insight. The struggle Therefore, the primary leadership chal- ability to make good strategic choices. for superior insights is the real starting lenge is to create and sustain an adaptive point for any business competition. company, i.e. a company with a built-in Leadership teams and senior executives The company, which arrives at the right ability to renew itself over and over again. must be good at focusing the attention insight first and uses it in an unparalleled This is important, since winning once is of their people. They lead and communi- way, has a superior advantage. Com- not good enough, a company must be cate, and through their ability to inspire panies having a systematic process of able to win and go on winning. and encourage they influence significant divergent learning, which enables them outcomes. They are in charge of organisa- So, the ultimate job of a strategy is to de- to uncover meaningful trends regarding tions that compete vigorously with others. fine how you will win. Or more precisely, customers, competitors, own realities, So doing better than rivals is vital. This the strategy determines how you will industry dynamics, and the broader envi- is where the need for a focused strategy use your scarce resources in the best way ronment, have the best chances of finding comes in. possible to win. The formula for winning the right insights first. A company´s strategy is defined by the is to build sustainable capabilities, which Even though strategy has a lot to do with create greater value for the customers, multiple and varied choices it makes finding the direction, a strategy must also and at the same time generate superior about when and where to compete and be integrated with choices about the com- profits for the company as well as positive how to win the business in the environ- pany´s identity, purpose, and capabilities. benefits for society and key stakeholders. ment it has chosen. True strategic choices This integrated view on strategy calls for It is not enough to simply delight the cus- require giving up one thing in order to an answer to questions like: What will tomers, which sometimes is easy to do. reap the benefits from another. Making this company be? Why will it matter? An- You need to figure out the composition strategic choices is by definition hard. swers to these questions have to include of the winning formula. First, this is done And often, the company does not antic- in which value dimension the company by reflecting and considering what those ipate the need to focus, which results in must excel in order to generate superior few things are that the organisation must important strategic choices neither being customer value. There are three dimen- do outstandingly well to win and go on framed, made, nor appears to being made sions in which a company generates winning in the selected environment, and but falls apart due to lack of action. value, product leadership, cost leadership, secondly focusing on which key things 1: Inspired by the thinking of Willie Pietersen.
2(3) that will really drive success. thing, but not make them do everything. Fig 2: Strategic Learning is a systems approach to To focus means to think through and strategy and execution. Only 42% of top executives are satisfied with the output from their strategy answer a set of questions to determine promise where and how to use the company’s scare resources. Our research conclusions on the subject of Strategy Creation and Implementation2 • In which businesses will we suggest that 58% of top executives are compete? not satisfied with the output from their • Which geographies will we target? strategy promise. Put differently, there is • Which customer segments will we a strategy-to-execution gap close to 60% pursue? among the researched top executives in • What products and services will we terms of how they perceive their strategy offer? promise and the actual strategy output. 60% of top executives believe that their • How will we deliver our products strategic priorities do not lead to focused and services? which choices need to be made. Going implementation and execution. They • How will we create greater value for through a bridging process, starting with claim for instance that one reason is that our customers? the insights and analysing the issues they unfocused and unclear priorities are • How we will generate superior raise, enables the strategic alternatives communicated from the leadership team profits? to emerge and assist in making the right into the larger organisation. Thus, many choice. See fig 3, page 2. • How will we generate positive bene- top executives simply do not get the effect fits to society and our key stakehold- There are three main elements involved they are looking for from their strategic ers? in defining strategic choices: initiatives. The real business focus must be external, 1. Customer focus But is implementation and execution e.g. customer dynamics, competitors and 2. Winning proposition really the problem? Perhaps so, but if shifts in technology, etc. These perspec- the problem is the lack of a clear and 3. Five key priorities tives must be addressed when consider- compelling strategy, the rush to discuss Customer focus defines which custom- ing a company´s winning proposition, implementation and execution will prob- ers will be served and which will not where and how to win. ably hide the most crucial issues. Unless be served, and it identifies what is most there is a crisp and clear focus, effective Making informed strategic choices important for those customers. The better strategy implementation and execution is A winning strategy begins with superior job one does in identifying and meeting very hard. insights. The quality of generated insights the customers’ hierarchy of needs, the Focus is one of four phases in a virtuous will have a direct impact on the quali- stronger and more profitable the bonds to strategy cycle ty of the strategic choices. Up-to-date them will be. Finally, customer focus also insights gained from increased learning defines what products and services will Strategic Learning is a systems approach of the actual situational context regarding be offered to them. The winner, indepen- to strategy and execution that embraces, customers, competitors, the company’s dent of industry, will most likely be the develops and disseminates knowledge own realities, industry dynamics, and company that swiftly identifies the most and is able to adapt to changes in the the broader environment, are needed to important customer needs and acts to world so that it benefits customers, conclude which key issues and alterna- satisfy those needs effectively and better employees, shareholders and society. tives the business is facing. Situational than anyone else. The Strategic Learning strategy process analysis, as a vehicle for consolidating framework has a four-phase dynamic The winning proposition is the hard cur- the main points from increased learning, cycle of Learn, Focus, Align, and Execute rency of a company´s strategy. It defines is a foundation for turning trends and (See fig 2 on page 2). These phases build what the company will do differently or reflection points into insights, and iden- on one another and are repeated to create better than its competitors to generate tifying major alternative courses from and sustain a winning performance. The more often an organisation repeats this Fig 3: The high level architecture of creating a winning strategy cycle, the better it becomes in doing it, thus enhancing its adaptive capability. The result is a process of on-going re- newal that characterises a truly adaptive organisation. What does focus mean? Focus does not necessarily mean being the biggest and most profitable compa- ny in the world or even in the industry. Focus means knowing in which direction we want the company to go and knowing what to do and what to stop doing to get there. A senior executive can more or less command the organisation to do any- 2: Blue Research: Strategy Creation and Implementation, 2013.
3(3) greater value for its customers and su- able from a total stakeholder perspective. leadership teams and senior executives to perior profits for itself as well as benefits A litmus test of a winning strategy is that develop strategic choices, including de- for society and its stakeholders. Winning the company has decided not only what it fining customer focus and crafting win- is not a matter of absolute performance will do, but also what it will not do. Every ning propositions. Our support is always but depends on how well a company time you fail to choose, you are choosing bespoke and there are several possible performs relative to others. The winning to spend part of your company´s scarce entry points to a successful collaboration, proposition must anticipate the moves resources on the wrong things. The best for example: of the competition. This is the essence of decision is the right one, the second best Running a Strategic Focus Workshop strategic thinking. Once there is a clear decision is the wrong one, and the worst with the management team is a proven view on which customers to target and decision is no decision at all. A great process for identifying and structuring what products and services to offer them, winning proposition combined with five strategic choices. the time is ripe to define the company’s clearly stated key priorities is as much Conducting a Strategy Audit with focus winning proposition. Remember, the about leadership as it is about strategy. It on a set of strategic options in question. challenge is to define the winning prop- is a call for action and tells people what This is a reverse-engineering approach osition, not just a value proposition. The they will do when they go to work every for validating the company’s current or latter is often nothing more than me-too morning. planned strategy, as well as the strategic thinking. The winning proposition may The strategic priorities need to be trans- effectiveness. be based on a theory of success, but it lated into the right operational context must always be based on the company’s Engaging in Strategic Coaching of senior with activities defining what must be strengths and capabilities, i.e. what it executives’ and managers’ strategic chal- done to make the strategy successful. This does outstandingly well. lenges supports and assists them individ- is the task of Align, the following phase ually in their ongoing strategy develop- The five key priorities ensure that bold in the Strategic Learning strategy process. ment and implementation work. priorities are made. They should define Leadership evolution the most important things a company Running the Focus Phase of the Strategic Many of the senior executives and Learning strategy process gives man- will do to achieve its winning proposi- managers, which we support in clarifying agement a comprehensive approach to tion, i.e. those vital few things that will the strategic focus and finding the right strategy creation. make the biggest difference. This is the strategic choices, have come to under- final step in forming the strategic choices, stand that key to create conditions that and is done by making a list of the top Blue Insight will allow strategy to emerge naturally is priorities that will help the company We help clients close the strategy-to-exe- through a process we call self-organisa- to effectively concentrate and use its cution gap by creating and implementing tion. This process highlights the impor- resources to deliver the winning propo- winning strategies. tance of crucial success factors such as sition. The key priorities are those things individual expression, decentralisation, Blue Insight is a boutique advisory one must focus relentlessly on to reach and to induce creativity, the right balance firm, focusing on strategy creation and success. Our experience tells us that there between order and chaos. We believe that implementation. Our focus on employing is a clear risk that people presented with traditional forms of top-down control are professionals with extensive experience too many priorities will not remember doomed in a world where no single mind provides us with the executive resources anyone. Hence, the limit set to five. fully can understand the compounded of a larger organisation while still being An important outcome from making challenges facing a company or organi- flexible and responsive in the relation to strategic choices and formulating a win- sation. By enabling diversity and using our clients’ challenges. ning strategy is the formulation of a com- the wisdom of the crowd in a facilitated pelling vision. A vision statement should Blue Insight is devoted to knowledge and process, increase the chances to find be a simple and motivating word picture situational insight and is aligned to the unique competitive advantages. It creates that, yet realistically, involves a stretch shift in demand for management con- an environment in which bright insights, of what the organisation aspires to be in sulting services by its way of leveraging unusual perspectives, little known facts, the future and a statement that provides knowledge, experience and giving advice. and contrarian approaches have an a clear sense of direction that everyone in Our experienced Consulting Associates opportunity to surface and be recognised. the organisation understands and will act work closely with clients throughout the But at the end of the day, all these intel- upon. The desired response from the peo- stages of strategy creation and implemen- lectual assets must be focused on making ple should be: Yes, that’s where we want to tation. the best strategic choices. go. When working closely with senior ex- How can we help? ecutives, we find that defining the vision Blue Insight statement is best done in iteration with It is impossible to eliminate risks from Consulting Associates the strategy definition work. By doing so, strategic decision-making, but we argue Stockholm Office: that it is possible for companies to World Trade Center the vision becomes an extension of the Klarabergsviadukten 70 company´s customer focus and winning significantly improve their chances of Box 70396 proposition, i.e. an aspirational statement success when it comes to finding the right SE-107 24 SWEDEN of where the winning strategy will take strategic focus, making the right choices London Office: the company in the future. and developing a winning proposition. 16 St Martin’s Le Grand Rather than looking for the next musing, St Paul’s If the strategy definition work results in London EC1A 4EN it is probably better to be thorough about UNITED KINGDOM two or more strategic directions, man- what we know works and make sure www.blueinsight.se agement needs to make a clear decision we do that well. Blue Insight has long info@blueinsight.se which one to pursue, i.e. the most favour- experience and knowledge of helping