Today’s business environment is fast, complex and exciting.
Building and growing a business takes a robust understanding of your company’s capabilities and its external environment. Here are concepts to keep in mind as you grow your business.
1. Understand Opportunities and Challenges
With technological innovation comes many new opportunities. But, profitability is more challenging in many industries
These factors are impacting profitability in many industries:
- Price competition & commoditization
- Digital Disruption
- Market Saturation & Maturity
- Many channels (online, in-person, omni-channel, etc)
- Global competition
- Educated customers with many options and substitutes
- Intense industry rivalry
The Point is: it’s harder to make sales in any industry, especially in mature industries
2. Understand the Differences: Strategy Formulation vs Execution
Strategy needs to be broken down to Strategy Formulation vs Strategy Execution. Anyone can brainstorm up a strategy, but implementing strategy can be a challenge for many companies, particularly large companies who may be less nimble. You need to do both Strategy Formulation AND Strategy Execution well.
3. Evolve and adapt to external environments
Strategy is better thought of as a “system” of “consistent” activities.
Avoid thinking of strategic success as just applying one “right” activity or strategy. It’s more complex than that. Why?
Business people need to adapt rapidly to many complex market forces. Also, because if your strategy consists of doing only one thing, it will easily copied by competitors.
Gone are the days of brainstorming for many months and years to reach one so-called perfect strategy. That’s why “Agile Strategy” and Rapid Experimentation are popular now. Why?
Because you can more efficiently adapt by doing small rapid tests and by Going To Market faster than your competition.
Also and importantly, effective strategies are best thought of as a system of mutually reinforcing activities. In other words, you need to do many activities/processes/systems that are “consistent” with each other and that create value. Here’s an example:
Our Technology innovation > Allows us to Provide new Digital Research products > Raises our customers’ Willingness to Pay > Reduces Costs > boosts profits > reinvest profits in new technology (continue the cycle)
Effective strategy needs to have all 3 working together (think of a triangle of mutually reinforcing sides)
- External consistency — Activities that you do outside your company are consistent (e.g. customers see consistent quality products like Apple)
- Internal consistency — Activities that you do internally at your company consistently create value
- Flexibility — Your strategy/company can adapt rapidly and flexibly to challenges that may arise (e.g. don’t be rigid)
4. Brainstorm ways to grow
It’s not one thing that we do that creates success. It’s doing many activities together which are “consistent,” such as:
- Use internal & external data
- Get customer feedback
- Pursue Rapid Experimentation
- Embrace a corporate culture that empowers team to innovate and improve
- Build a culture of rapid information sharing
- Embrace Diversity — encourages new ideas and innovation
- Focus on technology
- Incorporate Innovation
- Drive Efficiency
- Focus on Value-Creation
- Discover Blue Ocean Strategy / Value Creation