Business Strategy: How Do You Know When You’re Winning?

Leadership
Vision & Strategy

It’s one thing to come up with a great business idea. But it’s another to develop an effective business strategy that will help you hit your goals. If you’ve ever watched South Park, you may remember the enthusiastic but slightly misguided underpants gnomes (yes, I’m quoting South Park). They had a very simple business plan:

Image source: South Park Studios “Gnomes” S02

 

Phase 1, steal underpants. Phase 3, turn a profit. There was a big gap in Phase 2. You see, they had no business strategy for how exactly stealing underpants will lead to making money. 

Defining Success is a Key Element of Business Strategy

The gnomes forgot to answer the most important question of all: how will they win? This question is one of the six critical questions every business needs to answer from Patrick Lencioni’s book, The Advantage. The question is twofold – you need to determine what success looks like for your business and then how you will achieve it.

This is something that many businesses are weak on. Most people come up with a purpose, core values, and a general vision of where they want to go. But they all too often lack the detail of how they’re going to win (other than simply doing more).

The more strategic you are, the less you have to worry about your competition. In fact, you want to get to the point where your competition is irrelevant. Spending time on how we win is an incredibly important task.

 

How to Develop a Business Strategy That Works

We’ve already looked at 4 steps to create a business strategy. Let’s revisit this idea with a focus on how to know if you’re winning. There are a number of elements to this. 

1.Define Your Sandbox

The sandbox is where and with whom you’re going to play. Your core customer, or ‘who you are playing with’ in your sandbox should be first on the list when you’re developing your business strategy. You’ll want to consider what segmentation of the market makes the most sense for your business. This is the 80% of customers that you want to target – those who will make the biggest impact for your business. 

Does your business provide solutions to a particular age group or gender? People with particular hobbies or professions? The core customers are those whose problems you specifically solve. They are who your marketing messages are designed for, and where most of your efforts are focused.

The ‘where’ is relatively straightforward. This is the sector and geographic area you will play in. Is it Canada? North America? Or will you be a global brand? The answer to this makes a huge difference to the business strategy you’ll develop. If you’re a local brand, you can tap into sentiments for supporting locally made products. If you decide to sell to the U.S. market, then it’s a whole different way of doing sales and you’ll need to ensure your team understands that cultural difference.

 

2.Create Your Value Proposition

Your business strategy should be developed with a clear idea of what specific problems you will solve for your customers. Being able to answer this well takes work. Customer research should include talking to your ideal customers to find out what challenges they have. By learning what fears and other emotional pain points they have, you’ll be able to better understand how your business can solve them. Be clear on the problems you can and want to solve, and you can more effectively target your products and services.

 

3.Figure Out What makes Your Business Unique

When you directly compete with others it’s a race to the bottom over price. So, what should you do instead? Find what makes you different and unique! It’s not about being better at something. It’s about identifying the key differentiators your business can provide that your customer wants, as outlined in the Blue Ocean Strategy, a fantastic book by Renee Mauborgne and W. Chan Kim. 

When you can figure out your differentiator, you’re no longer competing; you’re offering a different value proposition. Developing this and strengthening this year after year, is very important if you don’t want to be a commodity service.

 

How to Understand Business Strategy

Every business owner should understand at least the basics of strategy. There are countless great books on strategy. These are a few of my favourites that offer ideas I use with my clients as a business strategy consultant:

  • Blue Ocean Strategy by Renee Mauborgne and W. Chan Kim

This book offers 300 pages of a play-by-play explanation of how to go about identifying your key differentiators so you can create that uncontested ‘blue ocean’ market space around you.

  • What is Strategy?: An Illustrated Guide to Michael Porter by Joan Magretta 

This delightful picture book is the shortest, simplest way to understand the fundamentals of strategy. Anyone can pick it up and read it in 20 minutes and come away of a basic idea of what strategy is.

  • Playing to Win by Roger L. Martin and A.G. Lafley 

The elements of business strategy discussed above are directly taken from this helpful book that describes how the authors were able to double P&G’s sales, quadruple its profits, and increase its market value. This book is a playbook for how to win as a business. 

Developing business strategy is an evolving process. You can’t go into a meeting and come up with a bulletproof strategy in one go. You start by answering the key questions and figuring out the elements discussed in this blog. But actually creating and strengthening that differentiation is a process that can take years. Each time you work on it, you stand out a little more from the competition and get increasingly clear on exactly how you’re going to win. And eventually, you’ll know exactly how to make a profit from stealing underpants. 

Need help thinking this through? Contact us today to learn how we can help.

Mike Knapp

STRATEGIC PLANNING & EXECUTION

Mike has been helping businesses achieve their goals for more than 20 years. He believes there is a better way for business owners and leaders to build their businesses and achieve their big goals. As a Gravitas Impact Premium coach, he leverages the 7 Attributes of Agile Growth™ to simplify the art of strategy and discipline of execution.

Related posts

VIEW ALL
https://www.incrementa.ca/wp-content/uploads/2024/05/how-to-stop-micromanaging-and-start-empowering-600x343.jpg

How to Stop Micromanaging and Start Empowering | 10X Growth

Leadership
Roger is a tech genius who’s created some amazing software applications and solutions for some big-name clients o
https://www.incrementa.ca/wp-content/uploads/2024/05/how-to-scale-a-construction-business-min-600x400.jpg

[2024] How to Scale a Construction Business

Leadership
Eight years ago, Dave embarked on what would soon become the adventure of a lifetime. With nothing but his trusty t

Let’s talk

The incrementa insider

Subscribe to our mailing list for practical ideas to improve your business.
  • We promise to never share your private information! Privacy Policy.