I call myself a strategist. A better way to say is I want to be a strategist. That’s why I have spent a lot of times to acquire knowledge in every aspect of businesses. The idea is to use the right weapon in the right battle. In this post, I will talk about strategy again. I want to expand further from the previous post that talked about the definition of strategy. This post is more about having a strategic mindset.
The essence of strategy
To be a strategist, you have to think like a strategst. What it means is you have to apply strategy in everything you do – in both personal and professional aspects of your life.
A simple way to explain how to use strategy in everything you do is that it is an action that you take for you to get the outcome you expect. What I mean is if you follow this principle, you have to approach everything with the desired outcome before you take any action. It will help you stop reacting and start responding instead. Reacting is an emotional state to a particular situation which you have less control. Responding is the opposite. You insert control in your action.
Remember this – the most important skill and power’s crucial foundation of a strategist is the ability to master your emotions. Anger is the most destructive of emotional response, for it clouds your vision the most. An emotional reaction to a situation is a mistake that will cost you a lot more than any temporary satisfaction you might gain by expressing your feeling.
I am not going to lie to you that I am not as good at controlling my emotions as I want to be. But, I did build an alert to stop when I realise that I emotionally react to a situation. It’s a damage control mechanism that helps me from digging a hole too deep.
So, don’t let emotions cloud your judgement. It’s easier said than done. But with practice, we all can do this. Managing your self-awareness is crucial to both personal and professional life. In essence, we develop a strategy to deal with unusual events such as a crisis or an unexpected opportunity.
A starting point of good strategy
There are lots of strategy talks in business. I bet you are involved in strategy work in some shapes and forms. How do you know that you are developing a good strategy? How does it start? Put simply, a good strategy identifies challenges and sets cohesive actions to address those challenges.
The starting point is then to identify the challenges. One way of thinking is to look for anomalies. An anomaly is a fact that doesn’t fit received wisdom. In business, an anomaly could be a great source of opportunities.
Take Starbucks as an example. In 1983, Howard Schultz noticed an anomaly when he visited Italy. He noticed that the way Italians consume coffee was different from Americans. That insight led him to form a strategic hypothesis with a list of business challenges and how to address them.
The starting point of a good strategy is not about putting a budget or a financial plan together. It’s not about the percentage growth we expect next year. A good strategy starts with in-depth observation of anomaly.
One of the ways to make your business strategy having a chance of success is strategic leverage. What it means is you see something, a pivot point, that you could concentrate and create leverage. It’s like pushing small force at the right pivot point to generate a much bigger effect.
The starting point in generating strategic leverage is anticipation. Anticipation means you have insights about your business or about the area of your expertise. Then, you predict what would happen in the future. It’s not psychic power. It’s an ability to use knowledge to predict the future.
As an example, I anticipate the following to happen in the hotel industry.
- A new cleaning protocol is a must for every hotel. It will be a new standard that impacts the way hotels are communicating with guests.
- Social distancing will impact how hotels operate. The role of the buffet will be dramatically reduced to non-existence. Hotels will change how guests check-in.
- More investment will be placed on technologies e.g. keyless check-in, in-room entertainment, etc.
- Small things like pen and paper will be removed because they carry germs.
- We will see more cleaning companies set up to provide services like quality assurance, cleaning audit, a cleaning certificate program.
- There will be new roles relating to cleaning, e.g. Hygiene manager.
Anticipation creates a framework and a direction to your business strategy. Once you have this insight, you can determine clear objectives and an action plan.
I talked about the competitive advantage in the previous post. A good strategy requires a business to identify a strategic advantage. This is because the advantage is rooted in differences – in the asymmetries among rivals. It’s the leader’s job to determine which asymmetries are crucial that can be turned to be a (sustainable) competitive advantage.
In my opinion, a few sure ways to achieve a true sustainable competitive advantage is through branding, company’s culture, and leadership just causes. There are intangible, and they give “meaning” to a business. That meaning could turn to be value for customers. Increasing value requires a strategy for progress on at least one of four different fronts:
- Deepening advantages – it means widening the gap by increasing value to customers, reducing costs, or both.
- Broadening the extent of advantages – this is to use the existing skills in a different but related area of businesses.
- Creating higher demand for advantaged products or services
- Strengthening the isolating mechanisms that block easy replication and imitation by competitors.
Strategy is a fascinating concept that is very dynamic. We are living and working in an environment that everything is moving so fast. It’s challenging to a good strategy to either avoid an unforeseeable crisis or to take advantage of incoming opportunities. However, having a stratic mindset would help guide you in the right direction.