The term strategy gets tossed around in a large number of mentoring sessions. Yet I’ve never heard anyone define it. And I plead guilty as well, as I’ve not defined it on my blog either.
So the Forbes article by Jeroen Kraaijenbrink What Does Strategy Really Mean?caught my attention.
JK defines strategy for business very simply: the venture’s unique way of sustainable value creation.
He goes on to disaggregate this sentence and I’ll provide my own interpretations:
Strategy answers two of my six questions: what value your organization creates and for whom. Value is created through the delivery of products and or services to organizations or individuals. Mentors and othersearth shorthand this as your value proposition. But as I’ve said before, value is in the eye of the beholder. Customers buy to fill a need or desire, but that need or desire may vary. So it’s the job of the founder to find the mode, that is the most common reason customers buy and make that the bull’s eye on the customer target, with other reasons radiating out from the bull’s eye. Thus your marketing and sales effort must always be on target, even if you miss the bull’s eye.
The term that mentors, investors and other tend to use is sustainable competitive advantage. But note, this is not a customer-centric phrase. Great entrepreneurs like Jeff Bezos obsess about satisfying their customers, not necessarily creating some advantage over their competitors, that’s a byproduct of a customer-centric strategy.
But to be sustainable means that your strategy is hard to copy or circumvent by others. Otherwise as soon as your venture appears on the market radar screen you’ll be copied and soon out of business. JK makes a third point that I’ve seldom heard: your strategy can’t rely on resources that are easily depleted.
One of my pet peeves is the use of unique as a variable. It is not. Unique, like being dead or alive, is a constant. The term “our product is the most unique ever created” is meaningless. Your product is unique or not. Thus JK wisely uses the term different. And he adds that neither your product nor service needs to be unique, but an element of either should be unique. For example, Michael Dell built a billion dollar business out of his unique delivery model: mass customization of personal computers. Finally JK wisely adds that your unique element doesn’t have to be unique in the world, but only in the market you target.
Way strikes me as an odd term; what he means is process. Your strategy must be operationalized, in other words translated into what you do. And what you do on a daily basis. Strategy is not a one-time thing, hashed out around a table at an off-site meeting of the founders. Strategy imbues everything your venture does.
To summarize: strategy is your venture’s unique way of sustainable value creation. You need to both define it and operationalize it. Then it all comes down do one thing: execution.