For the most recent McKinsey Quarterly, the firm produced a video in which two of its experts discuss the evolution of strategy in business. The video echos so much of what we advise our clients -- growing companies -- as we help them develop, adjust, and align their teams around their ideal strategies. Here are three of the points we firmly believe that were backed up by comments in the video. All three are critical focal points entrepreneurs and leaders should attend to when it comes to strategy: 1. Market selection and targeting has the lion's share of impact on your growth. A direct quote from the video: "80% of growth is explained by decisions about where to compete or by market selection." You must begin your growth strategy with a realistic assessment of how you make money, what problems you solve, for whom -- and on that last bit, even more specifically, for which segment(s) of the market. Doing so well requires considering marketplace trends, competitive forces, your product's fit with market segment needs, and your company's very DNA. Get this wrong and you might experience incremental growth, but not cross the chasm.
2. Positioning of your company and product is critical, and should precede and guide decisions on brand, product development, marketing plans, pricing, and even hiring. To quote the video: "Companies should be just as focused [on] positional improvement as they are on performance improvement .... [it is] fundamentally about positioning the company against the right trends, catching the right waves, and putting our bets on the right markets." SeriesC defines positioning as the articulation of strategy, inseparable from it. When our clients ask us to help them with positioning, we approach it not as a creative exercise, but as a scientific and fact-driven one.
3. When a strategy fails, leaders might be inclined to fault the strategy. In the vast majority of cases, however, the strategy itself is not to blame; it's the execution that went wrong. We often encourage clients who are facing failed strategies to assess how well or poorly they executed the strategy in four categories: Processes, Culture, Product, and Tools/Information. So frequently, this analysis unearths breakdowns in multiple places within multiple categories. A quote from the McKinsey video hit on one of those categories, culture: "Strategy’s not just about what’s on paper, but about the thinking and feeling processes of the leaders of the company." In other words, strategy will go nowhere if the leadership who must execute it are not aligned to it and psychologically prepared to embrace and support it.
Do you have a question about your strategy, or how to bring focus to its development? Leave us a comment or contact our consultant team.