What Does "No Strategy" Look Like?

I’ve been away thinking through some of my processes the last few weeks…

I’m trying to codify stuff and explain the process a bit more and some I’m going to be slightly less frequent, but with more in-depth stuff. I realized I was only scratching the surface on too many things.

Today, I’m sharing the first in a series that explains my strategy thinking and how people and when people find me and work with me.

“Does my business have a real strategy?”

This is the question I spend most of my time helping business leaders answer.

In most cases, the answer is no.

The reality is that every struggling, stagnant, or declining business finds itself in this situation due to its unique situation, but they all share a similar feeling of being rudderless.

Rudderless businesses often display one or more of the following signs:

·      They aren’t generating profits.

·      They aren’t likely to create new customers.

·      They are probably seeing a decreasing market share.

These signs are often hidden from plain sight by illusions of success like:

·      Consistent revenues.

·      High prices that mask lower customer volume.

·      Sales volume that comes from sales promotions and gimmicks like deep discounts.

How does it feel to work inside of or manage a rudderless business?

The most common feedback is that these businesses feel like:

·      All ideas are good ideas.

·      Every idea must be perfect.

·      We can’t afford to act upon this.

How does this impact the business’s execution?

“All ideas are good ideas!”

This is a dodge.

This is to “Spaghetti Thinking” meaning that if you throw enough stuff on the wall something is bound to stick.

This isn’t accurate.

There is a time for ideas and “Spaghetti Thinking” and that’s usually when you are building a strategy.

A good time is when you ask your most important question:

“What does success look like?”

When you hear “all ideas are good ideas” you know that the business has no filter for decisions.  

Strategy is choice.

What you will do…of course.

More importantly, what you won’t do.

Having the “all ideas are good ideas” mindset negates that thinking.

“Every idea must be perfect!”

This thinking damns every idea to the trash because no idea starts out perfect.

Every idea iterates and is shaped by the environment around it.

A successful business has its ideas shaped by the target market, the position, resources, and the business environment.

Attempting to find a “perfect” idea is a sign of fear, procrastination, and indecisiveness.

Fear of what?

Responsibility.

Strategy requires responsibility.

You are making a bet on the direction of the business, the future.

Responsibility requires choice, conviction, and bravery.

Because there are no perfect answers.

Everything involves risk.

“We Can’t Afford to Act on This…”

This is another form of procrastination.

The core of this is scarcity.

The foundation is a sense of “perceived loss” even when the old ways aren’t working.

This belief is a flashing sign that you haven’t made the choices necessary to create a real strategy.

Without these choices, every decision feels dangerous.

The truth is avoiding these choices is riskier.

Your business stagnates and the status quo never holds. Slowly, results start to slip until you suddenly find yourself in a situation that can’t be ignored.

“We’ve Tried Everything…”

In my research, I’ve found that around 60% of businesses say they have a strategy.

Dig deeper: around 80% of that 60% don’t have a real strategy.

This means 48% of the businesses that say they have a strategy have a strategy.

Let the numbers point you to how rare real strategy is:

100 businesses walk into a room.

40 of them have no strategy and know it.

60 remain with a “strategy”.

80% or more of those 60 don’t truly have a strategy.

Instead of a strategy, these businesses have:

·      A wish list.

·      A group of unrelated targets.

·      A vague direction.

This means that out of 100 businesses somewhere between 10-15% of them are truly acting with the focus of a real strategy.

What is the Cost of a Lack of Strategy?

Leaders struggle with the importance of investing time and energy into getting the strategy right.

Because the financial costs of a lack of strategy often show up too late, let’s look at the warning signs:

·      Misallocating your resources of time, energy, money, and people.

·      Not having a clear target customer segment, means you are probably wasting some or all of your marketing budget.

·      Losing the trust of your stakeholders because they can’t see or state the direction of your business. This opens the door for distrust and disengagement.

Quantifying the impact is nearly impossible because the lack of strategy also highlights deficient:

·      Measures of performance.

·      Realistic financial targets.

·      A true understanding of the costs associated with marketing, sales, service, and innovation in the business.

Moving from Rudderless to Focused

The solution to solving the challenge of being rudderless is strategy.

Focus.

It means creating a clear, compelling strategy for your business.

You can achieve this by having a clear process that moves you from chaos to control.

This process isn’t as complex as you think.

Start with defining success.

As the Cheshire Cat said in Alice in Wonderland, “If you don’t know where you are going any road will take you there.”

Next, you define your customer.

The common pitfall is to claim your product or service is for “everyone”.

Attempting to make an offer to everyone, the signal is that your offer is for no one.

Strategy forces you to make that decision.

Third, you need to decide why your customers are picking you over the other alternatives in the market.

Why you?

This is your value proposition.

Fourth, resources.

What do you need to execute your strategy?

Many strategies fail due to a lack of resources.

Many strategies never ask the question of what resources they need to be successful.

This gets your strategy off on the wrong foot.

You have to start with a foundation of understanding the true costs of success.

Finally, what actions are you going to take?  

No action. No strategy.

Strategy isn’t planning.

Strategy is making a decision and moving in the direction that decision points you.

You must take action.

Your first action, ‘Define success’…

In the next piece in this series, I will lay out the starting point of a real strategy: answering the question “What does success look like?”

You’ve made it here: if you know someone that has ongoing strategy challenges and might need help figuring out if they even have a strategy, share this one with them.