Strategy of Making ‘Transparent Strategy’


In the context of communicating strategy to employees and other stake holders, I believe that the best method is to make organisation strategy absolutely transparent to all employees and stake holders. Some people may argue that a select group should drive strategy and transfer same in the form of activities down the line. Though advantages and disadvantages of both of these methods can be debated for long, I would like to present my point of view in favor of making strategy transparent. In fact in my views making strategy transparent is a kind of strategy in itself.

To make a strategy transparent needs a lot of courage and conviction. And this starts from conviction in the strategy itself. Is my strategy a real differentiator? Are our products, services or offerings differentiated enough to attract target audience? Is my workforce capable enough to implement and deliver the outcome of my strategy? If I have to make my strategy known to everyone, I would have to compel myself first to answer above questions. The advantage is the outcome; my strategy would address real capability of organisation to deliver, my strategy would address the desired solution my product or service going to deliver to the target audience, my strategy would be guiding principle for HR managers and functional heads to build capabilities of work force exactly in line with the strategy. Most important the outcome this method results in is ‘a single focused strategy’ for the organisation

However, it would not be a secret for the world outside organisation to know about such transparent plans. Very soon competitors would discover this and could react in advance. My argument is; is it a real risk? In fact this could work in our favor  The competitions, if react, along with addressing their capabilities, have to alter their original strategy. Finally it would result in modification or change in organisational strengths, products, services etc. In most of the cases it would end up in multiple strategies focusing excessively on competition which is a definite recipe for disaster. A.G. Lafley and Roger Martin mention six common strategic errors in “Playing to Win: How Strategy Really Works, Harvard Business Review Press

1. There is the Do-It-All strategy, shorthand for failing to make real choices about priorities.

2. The Don Quixote strategy unwisely attacks the company’s strongest competitor first.

3. The Waterloo strategy pursues war on too many fronts at once.

4. The Something-For-Everyone tries to capture every sort of customer at once, rather than prioritizing.

5. The Programme-Of-The-Month eschews distinctiveness for whatever strategy is currently fashionable in an industry.

6. The Dreams-That-Never-Come-True strategy never translates ambitious mission statements into clear choices about which markets to compete in and how to win in them.

In one of the survey by Booz and Company more than two third of executives who responded to the survey from various companies agreed that their biggest frustration is ‘having too many conflicting priorities’ (As published in HBR blog “Making your strategy more relevant” by by Paul Leinwand and Cesare Mainardi). It seems more relevant to have focused transparent strategy, but it is not easy. In a competitive environment the easiest strategy is to play safe and in such situation most of the companies end up working on multiple strategies.

Michael Porter explaining his five forces model in one of the interviews says competitive rivalry is not a zero sum game. Everyone in an industry can work on product and services to create a differentiated value and collectively can increase the pie in the first place. Still there would be a fair competition. However, customers would have an option to choose between products based on their merits and not merely based on competitive pricing. This would uplift industry profitability. And that is the biggest incentive for investment in research and development. A win- win recipe for both the consumer and company.

Advertisements

Brand Managers! What are you building, a category or a brand?


One distribution channel is setting up the rules of game in today’s environment is multi franchise organized retail. Now a days the only distribution channel is prominent for the most of the consumer durable and FMCG product is organized retail. This multi franchise model is redefining challenges of branding and product management.
The older brand building activities now become category building activity. For example, imagine a manufacturer of refrigerator who successfully builds a brand and in turn customers turn up to the retail store. But inside the store, story is different. The need trigger or decision to have a refrigerator could have been augmented by the said manufacturer, but inside the store customer is open to buy any brand. For a walk in customer inside a store there are lot of variables available to take a purchase decision. It may or may not be dependent on the branding of the company which prompted the customer to consider the product.
This case implies that the older way of advertising and branding are basically building more of a category than a brand. At this point positioning of product plays a key role. The brand managers should think of which gap or problem they are solving by making a positioning of a product. Because a slight differentiation if exploited properly could play a major role in making purchase decision. These gaps or points of differentiation are available everywhere. It could be price point, product features, point of entry in customer home, geography, channel or even variables like buying need of customer, perceived value of product by the customers etc.
While positioning a product one should be very clear on competitive strategy. As in multi franchise sales network a wrong strategy will give opportunity to competition to win and set the direction of game. It’s a zero sum game. Its like a game of cards where you keep guessing of available cards with the opponents. You check your strong and weak cards along with setting trump card. You make a plan with a sequence of moves. And if your sequence of moves are ideal you can even win with your weaker cards, because you are setting the direction and opponents have to react to your move. But there is one flaw. The whole strategy is based on few real things ( strong and weak cards, trump etc) and more guess work like who are the opponents having cards stronger than your weaker cards. And an assumption that all the best cards are not in one opponents basket. So it is risky. And so it is challenging. When you put a wrong move someone else wins and then he starts setting directions to the game. Since guess work and risk are still on the table, you’ll have to wait for next opportunity to win a move and take the commands of the game back in your folds. Strong and weak cards can be replaced by competitive strengths and weaknesses of any organization.