Secret Of Strategy - Part 2

How to Create Strategies That Work In Today's Markets.

Of course you've detected that when you do what you've always done, you'll likely get what you've always got. In this case that means performing the military science game: coming up with acceptable--or worse--comfortable options and death penalization them as time permits. Likely, what you'll get is business as usual, and things will be... well, they'll be fine.

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But "fine" may not be what you're after, and you are probably reading a series called "How to Create Strategies That Work" so you can do better--perhaps much better...

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And if you are willing to take some time and do your homework: the research, inquiry, analysis, synthesis, and the energizing of scheme--you can add dramatically more power apiec of your individual tactics, and possibly revolutionize your entire business.

In the beginning of this series I showed you how to start the process of selecting a market-dominating business and marketing scheme.

The first four stairs are:

1. Set your vision
2. Gather environmental and competitive intelligence
3. Take stock of your organization's strengths and weaknesses
4. Answer the Global Strategy Question

I splashy those in The Secrets of Strategy, Part 1. In this clause I'm going to cover the next four stairs:

1. Establish decisive objectives
2. Rate and rank your "SWOTs"
3. Match your internal and external factors to identify strategic alternatives
4. Select the highest-impact strategies for implementation

Establish Decisive Objectives

Strategy is contextual. This means you should not make any kind of strategic decision--choosing scheme A over Strategy B, for instance--without first setting a context with Decisive Objectives.

The word decisive is from the Latin decidere, which means to cut off. Decisive objectives are the goals that cut off orthogonal business opportunities and distracting details. They define the boundaries of your company's efforts and direction, and establish the measures by which you will gauge your achiever.

This step is to select company-defining goals, the accomplishment of which will mean your vision has started to become a reality. These objectives or goals should relate to the following:

1. In what markets will you do business?
2. What market share will you have? Will you be a marginal player with a small percentage, a big player with a significant portion of the market, or will you dominate your market and crush all competition?
3. Where will you operate geographically? This question ties back to the issue of market share; you power dominate the market locally but be a small player nationally.
4. How much revenue and profit will you earn? Larger revenue goals will have different strategic needs.
5. What impact will your business wear your industry, your community, your world?
6. How will you exit your business? Will you run the business and eventually pass it on to family members? Will you sell it privately? Will you go public?

These are examples of the kinds of goals which shape your company. The decisive objectives create the context for the scheme alternatives you generate. Rate and rank your "SWOTs" Previously, you analyzed your external environment and internal strengths and weaknesses. Now rate and rank the most important factors. Evaluate each external factor: is it an chance to be taken advantage of, a threat to be defended against, or is simply something neutral you can safely ignore? Do the same for your internal factors: are they strengths to capitalize upon, weaknesses which much be bolstered or outsourced, or neutral conditions? Using your Decisive Objectives as a guide, select amongst the potential opportunities, threats, strengths and weaknesses, those factors you consider critical to the achiever of your business. (Ignore the neutral factors.) Group the critical factors into internal and external. Rate each internal factor from.01 to.99 supported its perceived grandness to your business. The total should add up to 1.0. Do the same for the external factors. Select the top five to ten internal factors and external factors for matching.

Match your internal and external factors to identify strategic alternatives

Matching combines each internal factor with an external factor, generating a possibly relevant scheme. A package manufacturer power match an internal strength such as flexibility with an external chance of a new law in a related industry, yielding a strategic alternative to reconfigure the package and provide solutions to the new legal requirements.

Or, a duck farmer power match his internal strength of breeding expertise with an external chance tight low-fat, high-protein foods to yield a scheme marketing low- fat duck.

Strengths are matched with opportunities to create SO strategies. These are generally your strongest, highest leverage options. Strengths match with threats to create ST strategies. These use your natural assets to minimize external threats to existing revenue streams and your current competitive position. But since the best defense is often a strong offense, you may find yourself reverting to an SO scheme-- typically a better alternative.

WO strategies use external opportunities to reduce the impact of internal weaknesses. Of course, you may simply choose to put your imaginations into areas of strength and outsource weak factors.

WT strategies are the weakest of all: defensive approaches designed to minimize internal weaknesses or external threats. Sometimes necessary to protect weakening revenue streams, there are often other, more powerful approaches that take better advantage of company strengths.

This process is often called SWOT, named for the four types of internal and external factors. I prefer to call it SOT, since the most powerful options will not pay much attention to weaknesses. In our business doctrine you will gain more ground more quickly by amplifying and exploiting your strengths and outsourcing--or ignoring--the areas in which you are weak.

Select specific strategies for implementation

At this point many people choose to intuitively select which strategies to pursue. Others may prefer to bring rigor to the senior process. This final step combines your various subjective analyses into a defined framework, giving each scheme a strategic impact score.

Compare your new strategic alternatives to your list of critical factors to find those factors affected by each scheme. For each match, rank the attraction of the scheme relative to the factor from 1-4 (1--not attractive, 2--somewhat attractive, 3--reasonably attractive, 4--highly attractive) and multiply it by the factor's rating (.01 -.99). Sum all the heaps for that scheme into a total "strategic impact score."

Lastly, select your go-forward strategies supported the highest strategic impact heaps.

This is a tight process with many stairs, but it is well worth the effort. The strategies you create will take superior of advantage of your strengths and opportunities, piece protective your company most effectively against threats and weaknesses. They will provide your company with leverage to make the most of your assets, your competitive position and your markets, all piece insuring your strategies are consistent with your company's vision and goals.

Important notice for scheme-minded entrepreneurs:

Strategy creation is a long road to hoe, and goes much more smoothly when you know what questions to ask and in what sequence. To make it easier for you and your senior team, I've created the Growth Strategy Roadmap.

This program of flowcharts, questions, checklists, and elaborate processes takes you through the entire progression of evaluating your external and internal environments, and provides all the stairs and forms necessary to generate matched options, and rate, rank and select a high-leverage, high-growth scheme.

Copyright 2004 Quantum Growth Coaching. All Rights Reserved

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