Strategy for Startups

Strategy is all about choices.

In order to develop a winning strategy for your business, you need to answer these 5 questions:

  1. What is our winning aspiration?

  2. Where are we going to play?

  3. How are we going to win where we’ve chosen to play?

  4. What capabilities we had to build to make sure we could win the way we wanted to?

  5. What management systems we have to built to make sure that we have those capabilities maintained on an ongoing basis to win where we’ve chosen to play and meet our aspirations?

It's a proven framework developed by A.G. Lafley, a former CEO of Proctor&Gamble and business school dean of the Roman School of Management. During the years 2000 to 2009, P&G sales doubled and profits quadrupled.

The company was able to deliver significantly more value, create competitive advantage, and perform at a consistently high level over the decade. The P&G's strategic choices delivered winning results for a company using this framework.

To begin with, let's talk about question #1 - 'What is our winning aspiration?'


Winning should be at the heart of any strategy. Too many top managers believe their strategy job is largely done when they share their aspiration with employees.


Unfortunately, nothing happens after that. The company needs Where and How choices in order to act. Without them, it can’t win.

It is important to understand who you are winning With and Against. These answers set the context for all the strategic choices that follow. They are the foundation of you discussion of strategy.

Why is it so important to make winning an explicit aspiration? When a company sets out to participate, rather than win, it will inevitably fail to make the tough choices and the significant investments. Many companies eventually go out of business due to modest aspirations.

 

Who you are winning WITH?

Peter Drucker, the father of business consulting, once said: “The Purpose of an organization is to create a customer”. 

That's why, winning aspirations should be crafted with the consumer explicitly in mind. Most companies, if you ask them what business they’re in, will tell you what their product line is or will detail their service offering.

Many phone manufacturers, for example, would say they are in the business of making smartphones. They would not likely say that they are in the business of connecting people and enabling communication any place, any time. But that is the business they are actually in — and a smartphone is just one way to accomplish that.

For example, Starbucks mission statement: “To inspire and nurture the human spirit — one person, one cup, and one neighborhood at a time.”

Or Nike’s: “To bring inspiration and innovation to every athlete* in the world.” (The additional note, indicated by the asterisk, reads: “*If you have a body, you’re an athlete.”)

And McDonald’s: “Be our customers’ favorite place and way to eat.”

Each is a statement of what the company Seeks to Be and a reflection of its Reason to Exist. It’s vital to focus more outward on your most important consumers and very best competitors, rather than inward on your products and innovations.

Don't focus solely on your products and innovations. This is what’s called — Marketing Myopia. It’s the biggest danger for a company and takes your away from the consumer.

In Proctor & Gamble’s home-care business, for instance, the aspiration is not to have the most powerful cleanser or most effective bleach. It is to reinvent cleaning experiences, taking the hard work out of household chores.

 

Who you are winning AGAINST?

Any and every organization has competition, direct or not. Your competitors are at your doorstep. And even if they’re not outside at the moment, I assure you they are en route.

If you know your competition, it will be easier to define areas where you can create competitive advantage.

  • Who really is your best competitor?

  • What are they doing strategically and operationally that is better than you?

  • Where and how do they outperform you?

  • What could you learn from them and do differently?


📌 Takeaways

  • Strategy is about making specific choices to win in the marketplace.

  • Start with consumer and customers rather than money.

  • Your company’s winning aspirations define the purpose of your enterprise.

  • Do play to win, rather than simply to compete. To play merely to participate is self-defeating. It’s a recipe for mediocrity.

  • Know your competition. It will help you create a better competitive advantage.

Are your organization have winning aspiration in place? How does it help you?  Post the answer in the comments below 👇🏻.


About the author

Alex Gilev is a UX strategy consultant with experience leading a variety of complex projects in B2C, and B2B organizations.


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