Check on Your Strategy, or be Chucked Out by Customers
Even though the global economy is collapsing at a very rapid rate, most business leaders only think that they have to spend less . . . while using the same strategy.
Wrong!
Here are five important questions that the leaders should be asking to shift to the right strategy:
Where does your existing business strategy make your operations unnecessarily complicated?
The traditional approach in most companies was to do as many functions as possible for oneself. This ties up a lot of talent on executing the existing strategy, who could better spend their time on developing or implementing improved strategy models.
In many cases, outside suppliers can do the task better. Even if they can't, your most talented people can be freed up to work on higher value activities. Just simplifying what needs to be done can increase an organization's effectiveness enormously even as a company like Huffy shifted from 1,600 employees to 120.
The traditional downsizing, by comparison, simply reduces the effectiveness of the existing business strategy and drains from the time available to develop better business models.
How could a new business strategy allow you to pursue larger, higher potential future opportunities?
Like Mr. Rowland Schaefer's wig business after the fashion shifted, are you finding yourself near the bottom of the barrel of opportunity? Remember that half of all business areas are, by definition, of below average potential.
What are some of the high potential areas that connect well to business model strengths you have today? If you cannot find any, is there another way to add business strengths? For example, could you make acquisitions of key personnel or partner with the top companies? Could you develop valuable intellectual property that would give you a foot in the door, like Gemstar-TV Guide did?
How can a new business model change your focus into the highest potential areas?
Huffy's selection of Nike as a partial role model could be a guide for you. If all you did was market products or services that you designed, how much more effective could your organization be? If all you did was develop intellectual property that could be licensed and sold to others, how much more effective could your organization be? Feel free to think about other companies that have much different business models than your own that emphasize just a few activities.
What are the best places to be in order to prosper in pursuing the highest potential future opportunities?
You can employ the thought process that Mr. Bernard Liautaud and Business Objects employed to think this through. A good starting point is to think about what's wrong with where you execute your existing business strategy, and try to understand why you are located in the wrong place (if that's the case, which it usually will be).
How can your new business model expand the potential of the future opportunity and your ability to prosper with it?
Notice that successful companies are usually conditioning customers and essential stakeholders to be more receptive to their business models. How much more can be done in this regard than has ever been done before in your industry?
Create a better business model along these lines and the next year will be your best year so far.
Good luck!
Copyright 2008 Donald W. Mitchell, All Rights Reserved
Donald Mitchell is CEO of Mitchell and Company, a strategy and financial consulting firm in Weston, MA. He is coauthor of seven books including Adventures of an Optimist, The 2,000 Percent Solution, and The Ultimate Competitive Advantage. You can find free tips for accomplishing 20 times more by registering at:
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