In too many cases, these companies lack a unique strategic vision that would differentiate the company and its products and services from the competition.
Instead, their strategic vision is to do more – sell more products in more markets to more customers – and execute better than anyone else.
Strategy guru Michael Porter refers to this as the “Be the Best” Mindset. This mindset generally leads to a zero sum competition where everybody is going after the same customers with the same undifferentiated products; but, at lower prices. With this approach, everyone loses except the customer who now gets the same products and services at those lower prices.
To develop a true strategic vision, our companies must find a way to be unique.
- How can we differentiate ourselves by meeting the different needs of our targeted customers in a way that is clearly superior to our competitors?
Below, I list five steps that all our companies should take to create that unique strategic vision.
The first challenge is to determine what is unique in our companies, products and services around which we can build a successful and unique strategic vision. Thus, we need to take a cold, hard look inside our companies to determine where we are currently differentiated.
- Go where the growth is: with what products and services are we seeing above market growth and rising margins? Why?
- In which market segments or customer bases are we seeing increasing share? Why?
- What do we do as a company that is different from what all our competitors do? How can we realize more value from this activity?
Put Ourselves in Our Customer’s Shoes
To better understand how our products and services are used, we need to put ourselves in our customer’s shoes to see our product, services, and company from their point of view. It is usually best if we can “eat our own cooking” by buying and using our company’s products or services.
This gives invaluable insight into:
- What real value our products and services bring to a customer
- How we can differentiate ourselves with simplicity or service to make the purchasing and use experience easier
- What other products or services we can sell to the customer when they buy our products
- How we can make the repeat buy decision for our customers more automatic
- What other customer needs are we not addressing that we could address
Speak to Customers and Vendors
Next, we need to confirm these insights by having the marketing and the executive team get out and speak with our customers and vendors.
- How are our products and we, as a company, perceived in the marketplace?
- What additional value could we offer our customers?
- What are the industry trends that both our customers and our vendors are seeing?
- How might these relate to our business?
- How might we capitalize on these trends?
We then must think hard about how we can use this customer insight and the broader industry trends to better position our company in the marketplace.
Think About Data
We also need to think deeply about how we can use data to better serve and understand our customers. To do this, we should brainstorm and consider the question:
- If we had perfect data about all our current and potential customers and what value we can bring to them, how would we use that data to our advantage?
By reflecting on that question, we can:
- Better understand the trends for the customer and their need for our products and services
- Determine how to prompt the customer to buy or repeat buy from us
- Satisfy the full customer experience with additional product and service sales
- Sell additional products that the customer needs at the time that they buy our product
- Prompt the customer to buy other related products or services (much as Amazon does with its recommendations and tracking of what others also buy and look at)
- Deliver our product and service in a unique and less expensive way
Consider Other Megatrends
Above, we spoke about the megatrend of data (digitization and data analytics). We should also ask how we can capitalize on other megatrends in business:
- Green / Natural – how can we make our products and our companies more appealing (especially to millennials) by being more green?
- Ease – how can we make it easier for the customer to buy, use, service, and repeat buy our product?
- Service Component – how can we move from selling a product to providing a service where the product is just one component of the service?
- Subscription Economy – how can we move one step further by making the re-buy decision automatic and selling our product and services as a subscription?
- Sharing Economy – what effect, if any, would the sharing economy have on our products and services and how they are purchased, used or consumed?
Much of the legwork can be done quickly. But the thinking and insights will be hard work. Yet, this strategic thinking is necessary and essential if we are to be excellent leaders driving our companies to success.
“One cognitive ability distinguished star performers from average: pattern recognition, the ‘big picture’ thinking that allows leaders to pick out the meaningful trends from a welter of information around them and to think strategically far into the future.” Daniel Goleman (Author and psychologist writing about a study of top executives at fifteen large companies)
By following these five steps and thinking critically about our companies, customers and marketplaces, we will be able to create a unique strategic vision that will drive our companies to grow faster than the overall market, increase sales and profits consistently, and win.