Saturday, April 12, 2008

My Strategy – Part 1

What Is Strategy? is a classic Harvard Business Review article by Michael Porter. He points out that the essence of strategy is choosing a unique and valuable position rooted in systems of activities that are difficult to match. Strategy itself is a long term action plan designed to achieve a particular goal, the vision.

There are some unique and valuable positions behind my Manager’s Toolbox strategy

To internalize and summarize
the knowledge I need
during my management career.

What makes my strategy unique? It is a needs based strategy which Porter defines as serving most or all the needs of a particular group of customers when there are groups of customers with different needs, and when a tailored set of activities can serve those needs best. A good example of needs based positioning is your local pub, where they serve you not only beer, but also food and entertainment to satisfy more of your needs - not the best quality but good enough to make you stay longer and make you spend more money there.
Photo of pub food by DanieVDM

Other strategic positions are variety based or access based. A good example of variety based position is McDonald’s who can best produce a variety of products using distinctive sets of activities. McDonald’s tried to introduce pizza but failed because they could not figure out how to make and serve a pizza in 30 seconds or less (using their distinctive set of activities). Starbucks in turn is an example of access based positioning; segmenting customers who are accessible in different ways because of customer geography or scale. You can find a Starbucks sometimes in every corner when the customer scale and geography allows this.

Treacy and Wiersema describe three strategic value disciplines that can create customer value and provide a competitive advantage. They are operational excellence, product leadership, and customer intimacy. Think about summarizing the knowledge needed during a management career. There is nobody that can beat the operational excellence of Wikipedia. How could anybody summarize more information faster or cheaper? The same way I do not think there is nobody who can question the product leadership of Harvard Business Review. They recently celebrated 100 years of Harvard Business School with a special issue on leadership and strategy.

Now think of internalizing and summarizing the knowledge I need during my management career. My strategic positioning for Manager’s Toolbox is clearly a customer intimacy strategy cultivating close and long term customer relationships and intimate knowledge of customer requirements. This comes even more apparent after making a strategic trade-off and deciding that

I am my only customer.

Manager’s Toolbox is helping me internalize the knowledge I need – and you bet I have a long term relationship with myself and intimate knowledge about my requirements. Understanding this took me one year when I did not write any blog entries. I was just not able to define who my customer would be and how I could provide them value. When I realised that I am the only customer, I also realized that I can easily provide myself value just by internalizing knowledge and summarizing it to this blog. And my strategic positioning and value discipline became crystal clear.

What are your personal or your organization’s strategic positioning and value discipline?

Have you clearly defined them?

Do you make strategic choices based on them?

Are you performing unique activities or just trying to produce more, faster and cheaper than your competitors?


Anonymous said...

You mention a HBR article by Porter - which Month/Year? I'd like to read. Thank you

Anonymous said...

the link did not work otherwise i would have found it on my own. thanks.