Strategy Check Newsletter: February 14, 2007

Strategic Thinking: Strategies for Better Strategizing

Over the course of the past two decades, it has become increasingly, abundantly clear that companies must find ways to be more innovative, more flexible and better prepared. Yet despite a steady supply of new jargon, models and techniques, the practices by which most companies create strategy have by and large not helped firms become more prepared for the unexpected. For the development and communication of strategy to become the inspired and inspiring process it must be, it is up to company leaders to alter their strategizing practices in three crucial ways:

Be more subjective and less generic. If strategies are to be deeply insightful and keenly motivational, they must have an intuitive, subjective and imaginative component.
Explore new ways to stimulate insights and communication. Get people engaged emotionally. When millions of neurons fire to help us describe, create and challenge what we are touching, we connect with the strategy.
Recognize that context matters. Enable people to make new connections between themselves, the task and the team. Go off site, break the boundaries, do something different. Help people to access their imagination, insights, and knowledge.

It is up to leaders to reinvent the components of strategy creation by engaging more of what makes people human - our imagination.

How to Guide: Reaching the $1 Million Mark

At the end of the day, what is every business trying to do? Grow. More customers, more sales, positive cash flow, larger deal sizes, higher volume, more billable hours, justification for higher prices, etc. Ask any hard-working entrepreneur what she is working on and you’re bound to hear a comment related to growth. Why? Because if you’re not growing, you’re shrinking. It’s why we are all in business – to build or create something bigger than ourselves. And specifically, how do you grow your business to more than $1 million in revenue?

The standard growth strategies are numerous (and confusing) such as partnerships, market expansion, acquisition, product extension, and franchising. While these strategies are important and useful, I believe growth is ultimately determined by providing value to your customers, the people you hire, the processes they develop, and culture you choose to build. So instead of thinking about the detailed strategies themselves, let’s look at a few exciting and practical ways to help you move closer to the $1 million mark.

Case Study: The Service Economy

In most developed countries, some two-thirds of the GNP is made up of services. However, strategic planning and concept development are still focused on solving problems for the manufacturing industry. The only new service industry in which strategy concept makers have shown any interest is financial services, especially banking. Big banks are an integrated part of the world of big global manufacturing industrials.

Is it because of this poor state of knowledge that almost the only service company that has had any impact on general strategy formulation is the fast food chain McDonalds? The success of McDonalds is based on a simple and effective strategic formula: standardization of service into a package of the smallest detail, strict quality control and cost-effective production by young, cheap, unskilled workers supervised by managers on the shop-floor.

Karl-Erik believes that "McDonaldization" strategy is far too simple a way of looking at the dynamic and fast changing world outside the manufacturing industries -people-intensive and people-dependent. Karl-Erik suggests that in order to develop truly original strategy concepts for the non-manufacturing companies one should try to turn the traditional logic of manufacturing "upside down". Instead of basing our conceptual thinking on 100 year-old doctrines based on the notion of the one-product factory, Karl-Erik suggest that we should look away from the manufacturing industry, very far away.

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