Tuesday, April 19, 2016

Your Competitive Advantage ≡ Your Strategy

"Would you tell me, please, which way I ought to go from here?"
"That depends a good deal on where you want to get to," said the Cat.
"I don't much care where—" said Alice.
"Then it doesn't matter which way you go," said the Cat.
"—so long as I get SOMEWHERE," Alice added as an explanation.
"Oh, you're sure to do that," said the Cat, "if you only walk long enough."

-Lewis Carol’s Alice in Wonderland

I was reminded of this beautiful exchange between the Cheshire Cat and Alice when I read “Can You Say What Your Strategy Is?”, which coincides perfectly with the strategy at my former company. It is ironic that anyone would spend years of their life, including all of their life savings and others’, all while having skipped the first step: creating a strategy.

A few years into my tenure at my former company, I was invited to spend a weekend in a training for new managers. While I was disappointed to spend the weekend working, I was excited for the opportunity to learn. Toward the end of the event, our lecturer (an MBA professor), asked us to explain what our company’s strategy is. The professor asked the question of highly educated, experienced managers that had been working at the company for a few years. The answers were as varied as the number of people in the class. The answers ranged from “to change the world” to “to make people’s lives better”. They were grasping for answers.

I always have wondered why the professor asked this question of us burgeoning managers instead of the executives of the company, but I learned a very valuable lesson from the experience anyway: a company’s strategy needs to be clear. Not only to the founder, or to the executives, but to everyone, including the employees, customers, and potential customers.

Simon Sinek gave an inspirational TED talk in 2009 entitled “How great leaders inspire action”, but whenever I think about the talk I think “what, how, why” (in fact, when I was digging for this talk earlier, I typed “TED apple why how what” into Google, and up popped Sinek’s talk). In this message, Sinek repeatedly states, “People don’t care what you do, they care why you do it.” If you start with why, not only will how and what naturally fall into place, but the end result will be better because of it. Like Sinek said, “if Apple built a toaster, we’d all go out and buy it.”

In “Can You Say What Your Strategy Is?”, David Collis and Michael Rukstad argue that a company’s competitive advantage is its strategy. I am going to rearrange and paraphrase that statement by saying, “You don’t have a competitive advantage if you don’t have a strategy”. I would also argue that if your employees and customers don’t know your strategy, you don’t have a strategy. My company suffered from many things, but I believe that a lack of strategy tops the list (or at least results in many of the other problems). Apple is at the opposite end of the spectrum. According to Sinek, Apple’s “why” is “everything we do is to break the status-quo”. I think that anyone would explain Apple’s strategy in similar words (or, at least they would have 5 years ago).

The Cheshire Cat has wise words for Alice, whose only objective is to stay in business. There are many ways to stay afloat, but if you don’t care why you do what you do, then it doesn’t matter which of them you choose.

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