Verify & Validate Your Strategy
I believe that the most important part in any development process – be it a Product development or a Strategy development is the Verification and Validation. One needs to verify his Strategy and validate the outcome before Implementation. I would like to share some key takeaways from this week’s reading which added further credibility to my belief.
Can You Say What Your Strategy Is?
This article started with an intriguing question – ‘Can you summarize your company’s strategy in 35 words or less? If so, would your colleagues put it the same way?’. The question sounded very interesting and I wanted to see how true it is. I immediately took my phone and dialled to two of my friends working in a very successful firm. They both gave an almost similar answers. Then I dialled to two other friends working in a growing company and surprisingly, they both had different views of their organization’s strategy. This made me wonder how true the statement is.
The most common mistake that many companies still continue to do is not having a simple and clear statement of strategy. They try to execute their Blind Strategy on a trial and error basis and eventually they learn. But by the time they learn, the True value of a Strategy is Lost. It is not uncommon to see that many Organizations abandoning their original strategy and picking up a new strategy during the Flow. Even large companies like Honda fell for this trap. Without a proper strategy they entered the US market to sell their Low cost bikes, but soon realized their mistake and changed their course. But not all company can afford the luxury of changing their strategy in the midway.
The author defines three critical components of a good strategy statement.
First, any good strategy must provide a clear and specific sense of what the company seeks to achieve. The strategic objective should be specific, measurable and time bound. Organizations often confuse their statement of values or their mission with their strategic objective. Second, the Firm’s scope – The firm should define the scope or domain of the business. The Firm should identify who their customers and competitors are; what is their market and where they are going to operate; and how they are going to operate. Third and most important – what is your Advantage?. Your competitive advantage is the essence of your strategy. The way you do differently from or better than your competitors defines the all-important means by which you will achieve your objective.
Finally, an Example is Worth a Thousand Words. I would like to emphasize the importance of above mentioned facts by providing a real world example. Toyota was able to successfully dominate the market because of their successful strategy.
- Main Objective - To enhance customer satisfaction by providing high quality service and value for money.
- Scope – Widening the operations in the potential overseas market
- Advantages – Lean Manufacturing. The ability to maintain a cost-effective manufacturing process.
1. Can You Say What Your Strategy Is? (Collis and Rukstad, Harvard Business Review, April 2008).