Business strategy is about deciding on whose needs and which customers you are going to serve and then on how to do this uniquely well. If you’re going head to head you’re not going to win. Mission statements, a desire to be #1 or 2 in a market, etc, are not strategies. Strategy is a concrete set of choices about your business in order to deliver unique value to whatever customers you want to serve. You can’t serve all customers or meet all needs so you need to be distinctive about where you’re going to play.
Ie you need to tailor the primary and support activities in the value chain around this proposition. Eg how do you manage your human resources and what type of human resources are you trying to attract? You can’t do what everyone else is doing. This provides a new operating model.
Strategy is not execution. Porter hears things like it’s all about execution, and execution eats strategy for lunch that it doesn’t even bother him any more. But choices are different to execution. If you can’t figure this out you’ve got a problem. There’s no one best strategy, just whether it offers unique value to the customers it wants. And integrating these choices through the value chain and activity system to provide fit. There’s no such thing as a good Marketing or HR strategy, only good HR for the overall strategy, so it all fits together as part of an overall holistic system.
I really enjoyed the session and was disappointed to overhear a couple of people later suggesting it was like listening to their lecturers at college. I wanted to tell them: believe me, your lecturers weren’t even in the same galaxy as Porter. And what did they expect anyway. As Porter said, strategy is used too loosely, at a very high level. But it’s actually incredibly specific. About how it relates to your industry, your choices and how you position yourself. If you’re Simon Sinek speaking about a need to change your mindset you’re just going tell a few stories (this is me again now). If you’re Gary Hamel and you want to get people excited about a problem that doesn’t really exist then you’re going to share some research evidence and case studies. But if you want people to understand a precise way of doing strategic management then you’re going to need to share some models.
The literature in both strategy and economics addresses many different points in this chain of causality. Indeed, many differences are less conflicts than theory positioned at different points in the chain, as we will see later. Any theory of strategy must grapple with how far back in the chain of causality to go. The answer may well be different for different purposes. A theory that aims very early in the chain may be intractable or lack operationality. Also, aspects of the firm that are variable in the long run may be fixed or sticky in the short run. Conversely, a theory oriented later in the chain may be overly limiting and miss important possibilities.”
Organisation strategy is about deciding on what needs in your business you are going to serve and then on how to do this uniquely well. It is a concrete set of choices about your organisation in order to deliver unique value to whatever business needs you want to serve. You can’t meet all needs so you need to be distinctive about where you’re going to play.
- Consulting Research Speaking Training Writing
- Strategy – Talent – Engagement – Change and OD
- Contact me to create more value for your business
- jon [dot] ingham [at] strategic [dash] hcm [dot] com