Before we set out to identify and create disruptive strategies, we must first carefully consider what it means to have a strategy. The term strategy is the most overused word in business vernacular. People at all levels of organizations commonly misuse "strategy" when they are actually referring to tactics. Even top level executives often confuse strategy with trying to be the best at something. It is not a strategy to say we want to "be the best" at something. In order to create sustainable value over time, firms have to make tradeoffs that ultimately place them in unique positions that are difficult to replicate by competitors.
Michael Porter is a Harvard business school professor and world renowned authority on strategy. He has written a large number of books and given countless lectures on the topic. A spectacular starting point for anyone interested in devising corporate strategy should read Porter’s groundbreaking paper on the topic, "What is Strategy"
The paper states that most companies approach strategy in ways that are flawed from the outset, and that most executives make the mistake of confusing strategy itself with other things, like operational effectiveness. Note the distinction:
Operational Effectiveness - Performing similar activities better than rivals
Strategic Positioning - Performing different activities than rivals or performing similar activities in different ways than rivals.
It is not enough to have a simple fill-in-the-blank statement that full encompasses ones strategy--it needs to be an ongoing conversation that eventually becomes woven into the cultural fabric of an organization. We need to talk about different decision making frameworks, industry climates, and competitive "what-if" senarios. It is important to note that strategy formation is fundamentally about deciding upon and nurturing a particular way to be unique. When considering what it means to think strategically about work, it maybe useful to read a few quotes regarding corporate strategy by Michael Porter.
"Operational effectiveness is not strategy”
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The essence of strategy is choosing what not to do.
A strategy delineates a territory in which a company seeks to be unique.
"A company can outperform its rivals only if it can establish a difference that it can preserved"
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“Strategy is about making choices, trade-offs; it's about deliberately choosing to be different.”
"The essence of strategy is that you must set limits on what you're trying to accomplish."
"In a period of economic downturn, the overwhelming instinct is to pare back, cut costs, and lay off. If you do that, do so with your strategy in mind. The worst mistake is to cut across the board. Instead, reconnect and recommit to a clear strategy that will distinguish yourself from others."
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“Healthcare isn’t the nine hundred pound gorilla in the room – it’s the nine million pound gorilla.”
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"Ultimately, health care fails the most basic test. It's not organized around the needs of the patient."
Strategy <> Uniqueness >> Sustainable Competitive Advantage
JqL