According to a blog item in Harvard Business Review(HBR), there are three standard strategy processes that most companies follow and the writer suggested they just don’t cut it. But the position, and the suggested alternative, is far too simplistic…
The blog states the common strategy methods are –
- Waiting until the annual strategy review to revisit your strategy
- Putting together a SWOT analysis as an input to the start of the strategy process; and
- Beginning with a long and arduous exercise to wordsmith a mission/vision statement.
While we agree that revisiting your strategy only annually is inadequate, there’s more to the other two than a blanket ruling out.
Let’s take a look at both the blog writer’s suggestions and at why these suggestions don’t work –
The up-front SWOT analysis
The writer believes the most common way to kick off a strategy is with a SWOT analysis. But they believe that there is no such thing as a generic strength, weakness, opportunity, or threat.
Instead, they say strengths are strengths only in the context of a particular where-to-play and how-to-win choice. You’ll see this phrase a few times in their piece.
They say that attempting to analyse these S, W, O and T items in advance is a costly waste that produces little of compelling value.
In a sense, they’re correct in saying that a SWOT cannot be a standalone element of strategy. But we disagree with the idea of evaluating a SWOT against a pre-determined strategy.
Instead, we find a SWOT analysis should be used as one of three factors that help you get the right business model or competitive strategy in the first place.
The other two key factors are analysis of competitors and analysis of the market’s needs and fears.
By using the SWOT in this way, it can help determine a gap… we can answer the question, “What does our market want which our competitors are failing to adequately address but which we could deliver?”
Writing a mission or vision statement
According to the writer, the strategy team within companies might also turn attention to producing a vision or mission statement. And that without having made a where-to-play or how-to-win choice, spending time word-smithing a vision/mission statement is a waste of time.
So put simply, HBR believes that mission statements are unhelpful because they are not derived from something. Again, this just isn’t quite right…
A vision or mission is something that describes the purpose of a company and should be more inward looking. It’s a chance for the company to paint a picture to its team of where it’s going and what it wants to do.
It’s not meant to be an outward looking device that compels a market or even encapsulates a strategy. That’s the job of a Unique Selling Proposition or USP. And in fact a good USP can be used to help not only to compel the market but serve as a key idea around which to direct your team.
We’ve seen this in action, repeatedly.
A mission trying to do the job of a USP is misspent. A mission is an objective and a strategy helps achieve an objective.
The USP, and not the mission, should be derived from something. It should be derived from the Market intelligence, Competitor Intelligence and SWOT analysis we mentioned earlier.
The order should be this: Ownership and stakeholders have a plain-English purpose and mission. This is an objective, something that needs a strategy. So you take those intelligence-gatherings and work out the best strategy to achieve those objectives. That strategy also needs a message to take to market. That’s the USP.
