Strategy can be a fluffy word for many, even if you have gone to business school. (And it is often in the eye of the beholder aka I know strategy when I see it.)
Simply put, strategy boils down to “how are you going to do what you set out to do?” or “what are you going to do (at a high level) to achieve your goal?”.
I am a big fan of analogies as it easier to build on an existing worldview / mental map / association than to create a new one from scratch. (At its most basic in terms of marketing, there is the temptation to classify something as “the Corvette of …” or “the Champagne of …” of its ilk. That is an analogy.)
I am also a runner so I propose to explore the notion of strategy from the perspective of a marathon, tossing in the odd business term to show some similarities. At the end of the day, the idea of how you get from point A to point B is still valid.
Strategy example — running a marathon
When you set out to run a marathon, you likely have a strategy in mind. Though not exhaustive (no pun intended), a list of strategies would include:
1) Complete it: If you are running a marathon for your first time, you may just want to get to the finish line so you can mark it off as completed. You’ve trained for it, you know you will make mistakes and be sore at the end, but you expect that everything will work out right. In business terms, this about executing to plan with as little drama as possible.
2) Survive it: If you haven’t really trained for a race or had some sort of last minute setback, maybe all you care about is getting to the finish line and getting it over and done with. What is separating you from failure is all mental. This is similar to a business scenario when you attempt to achieve a goal without all of the pieces in place. At its worst, its called “spray and pray”.
3) Run an even pace: This is more challenging, implying that you maintain an even pace (or speed), no matter the terrain. If the road kicks up, you will dig deep in order to keep the same pace. In business terms, this means that you adjust to whatever obstacles the market or customers throw your way. You hit your goal in stride (pun intended).
4) Maintain an even effort: This is closely related to running an even pace, but instead of measuring an outcome like pace, you will measure something like your heart rate. You know your limits and don’t want to blow up, so you adjust your foot speed to the terrain to maintain an even heart rate. From a business perspective, this is akin to focusing on a different metric than say just dollar signs. You get to the finish line but you judge your success on the basis of a different factor.
5) Run a negative split: This strategy means that you try to run the 2nd half of the race faster than the first half. However, you are not exactly allowed to take it too easy — also known as sandbagging it — in the first half. In running terms, this strategy is like the holy grail or a unicorn. You have heard about it, you have never seen it, and you can’t imagine being able to do it, but you are happy to cheer on someone who can. In business terms, it means that you need the right metrics to incite people to give the right effort at the right time, a consistent effort with a sense of added urgency at the end.
6) Have fun: This strategy is filed under “just happy to be there”. You have already hit your objectives earlier in the year (or your career) and you are going to enjoy every minute of it. (Hard to believe for those who have never run a marathon, but if you have run the Boston Marathon or pretty much any race at Disney World, you know what this is like.) In business terms, this is like setting a goal that anyone can hit with their eyes closed, so maybe not the kind of goal you want to set or strategy to adopt.
7) Tune-up run: This is what you do when you have a goal race a little bit later and want to validate your form or training in advance. (Most people would turn to a half-marathon for a tune-up, but a serious marathoner or ultra-runner might be dumb/crazy/motivated enough to run a full for this purpose.) From a business perspective, this might be the equivalent of dipping a toe in the water of a new geography or testing market acceptance of a new product.
8) Set a new personal best: This is the strategy where everything has to fall into place just right for it to work: your training, your nutrition before and during the race, your hydration, your pacing, the weather, the course itself, etc. The personal best (or PB) is the high water mark, considered the ultimate sign of progress in a running career. This strategy lends itself well to a stretch goal, with everything else also in place, in business.
Strategy in sales
There are an equally wide variety of strategies even for something as straightforward as “go out and get sales” and I’ll add some real world anecdotes where possible. These sales strategies include:
1) Get a new customer / new pin (on a map): Under this strategy, the focus is clearly on getting new customers, though the nature and location of customers could qualify the resulting strategy: Do we want any new customer ? Only new SMBs or enterprise customers? Only new clients in a given geography? Etc. The possibilities are indeed endless (in theory) though the temporal need to hit a sales target should bring some focus pretty quickly.
2) Up-sell existing customers: It is a truism that it is easier to sell additional products to an existing customer than it is to sell new products to a new customer. Under this scenario, the former is preferred. This can also be thought of increasing customer share of wallet.
3) Get launch customers: If the product or solution in question is new to the market, the focus may be on securing launch customers with an eye to validating the market need. These customers may be existing ones or new ones, another possible way of breaking down the strategy. Furthermore, the need to get launch customers who can provide endorsements or quotes for a broader market launch may be another consideration, with pricing and deal characteristics adjusted accordingly.
4) Maximize sales: This is pretty straightforward. Increase the top line, increase revenues. Got it. Good. An example of the challenges of this approach was Toyota in the early years of the 21st century as it sought to supplant GM as the world’s largest car company in terms of sales. Toyota found to its detriment that profitability, quality and other aspects of long-term sustainability can be sacrificed on the long march towards revenue supremacy. (In spite of Toyota’s troubles and subsequent mea culpa to customers and investors, Volkswagen has expressed a similar desire to be the largest car company by sales. Yes, hubris springs eternal.)
5) Maximize profits: This is the flip-side of maximising sales. However, taken to the extreme it can be just as problematic. Sales opportunities may be skipped lest they impact margins or operating costs cut to the detriment of customer satisfaction. It is not for no reason that the balanced scorecard was invented.
6) Meet some non-sales target: If the organisation has made some other sort of commitment to investors or to the marketplace, then it may pursue any one (or a combination) of the strategies listed above in order to demonstrate market traction or some other vindication for an investment, an acquisition, etc.
There is no strategy without context
It is worth pointing out that, similar to running a marathon, none of this exists in a vacuum. In addition to time constraints such as the end of the quarter or the fiscal year, there are notions of industry, sales cycles, sales complexity and other variables and risks that come into play to rapidly turn the guaranteed outcomes predicted by strategic theory into best efforts. Hence the importance of identifying risks and mitigating them, but that will have to be the subject of another posting.
Image credit: https://flic.kr/p/Jioiv