It is the time of year when many companies start planning their strategy for the following year. Unfortunately, much strategy planning is an exercise in futility – plans are shelved quickly and don’t address what needs to be addressed.
Part of this is confusion over what strategy is – strategy IS NOT long-term or high-level plans. Just because a plan encompasses an entire year does not make it a strategy.
Michael Porter taught us that:
- Strategy defines the company’s distinctive approach to competing and its competitive advantages.
- All strategy is based on understanding competition.
- A good strategy creates unique value for a particular set of customers and captures some of that value for the firm.
What that in mind, my definition of strategy is this:
Strategy: the capabilities required to win in the market and obtain organizational results.
Below are the nine essential questions to ask yourself as you plan for your strategy for 2023.
1. What is the problem?
Every business exists to solve a problem for somebody – somebody who will pay to have that problem solved. What problem do you solve? For whom? Why do they pay to have that problem solved?
2. What does the future look like?
What does the future look like for yourself, your company, customers, employees, and society? How will you measure it to know if you are achieving that future?
3. How do we behave as a company?
What values and principles do we hold dear? How do we resolve conflict and trust each other?
4. Where do we compete?
What does the external environment look like? What rules affect how we compete and win?
5. How do we win?
What is our Unique Value Proposition? How do we convince potential customers they should buy our product or service instead of something else?
6. What capabilities do we need?
What internal capabilities do we need to make our value proposition come true? Specifically, what key activities do we perform every day, what skills and abilities do our people need, and what tools and resources do we need?
7. How do we know if we are winning?
What measurements do we collect and review regularly to know if we are delivering on our value proposition? This step involves creating a scorecard and then reviewing that scorecard regularly.
8. What do we do every day?
What are the key activities that we do every day? Are these activities documented, and can they do what needs to be done effectively and efficiently?
9. How do we improve?
What improvements will we make to our business, key activities, and capabilities to ensure we can win in the market and get the results we desire now and in the future?
