Every company has a corporate strategy.But most people don’t understand what it is.
In a Strategy& survey of more than 1,900 executives, an astounding 80 percent said their strategy was not well understood within their own company.
Obviously, people can’t align with—or execute—a strategy they don’t understand.
Strategy is “one of those words.” Every company needs One, but even the strategy consulting firms don’t have a common definition for what a strategy is.
Rather than create a new definition of strategy or propose yet another framework, this chapter focuses on five critical strategy questions every company must answer in order to provide clarity to the organization:
- Which market segment(s) should you target?
- What product(s) and/or service(s) should you sell?
- Where should you compete?
- How much should you charge?
- What is your business model?
To unleash the accelerating power of alignment, your company must answer them clearly and precisely.
Unfortunately, many companies struggle to do this. If they even have a strategy, it could be summarized as “more.” More markets, more proposals, more products, more cities, etc.
The problem is that sometimes, more is less.
In contrast, fast-lane companies are much more disciplined about their strategy. In this chapter, we will look at how USAA, Basecamp, Iridium, Dollar Tree, and TOMS answered the five strategy questions.
Obviously, there are many other strategy questions that must be answered. Many of these are functional strategies. The Chief Financial Officer must develop a strategy to finance the company’s operations. The Chief Marketing Officer must develop a strategy to build awareness and demand. The Chief People Officer must develop a strategy to recruit, retain, and develop the very best people. This week, we will focus on the five corporate strategy questions.
NOTE: These stories are excerpted from my book, Drive One Direction.