Research shows very few companies actually know how to create an effective strategic plan AND successfully implement it in the marketplace. Is your company one of them?
Failure to properly implement your marketplace strategy does much more than create glitches in the business. It can actually lead to business failure. And, in many situations, an incorrectly administered strategy is worse than no strategy at all.
Thats why, in my new book, Strategy Activation: How to Turn Your Vision into Marketplace Success, I explain how “strategy disconnects” occur in even the best organizations.
Why Strategy Disconnects Occur And What It Can Mean to Your Business
Disconnect begins when businesses make a promise to the marketplace without first completing a self-assessment of competencies.
When creating their marketplace strategy, most organizations research customer needs, competition promises and relevant gaps between the two. Yet, most companies do not recognize their current capabilities and limitations when considering their strategic options. Or they overestimate how much change they can absorb in pursuit of the strategy.
Either misstep can have a tremendous negative impact on delivering on the promise.
To Succeed in an Increasingly Knowledge-Based Economy, You Must:
- Determine where the real and future market gaps in your industry exist
- Identify opportunities that align with your existing image and resulting marketplace “permissions”
- Confirm that your organization has the right capabilities or realistic odds of creating the necessary capabilities
- Envision how your strategy will be implemented at each key customer touchpoint
- Define clear roles and chain of responsibility
- Remain flexible and responsive to marketplace shifts
Most organizations have a number of strategic options and viable paths to potential marketplace success. Understand and use my three general rules when it comes to settling on the best strategic option for your organization:
3 Rules You Must Know When Choosing Your Marketplace Strategy
1. Your marketplace strategy must communicate a compelling and relevant promise to customers, regardless if it is faster turnaround time, luxury style or lower prices. In short, it must address a customer need.
2. The marketplace strategy must align with your organizations capabilities. Capabilites can grow and change over time but the organization is limited by how much change it can absorb in a specific time period.
3. Your go-to-market strategy must leverage your current image and resulting marketplace permissions. For example, few of us would pay McDonalds $20 for a filet mignon. Its hard for us to believe a fast food restaurant could deliver the quality worthy of such an expensive meal.
Remember, a Marketplace Strategy In and of Itself Will Never be Enough.
The key lies in executing your marketplace strategies flawlessly.
That means you must capitalize on existing strengths. An organization can only truly and consistently deliver products and services that its people, processes, tools and systems are capable of generating. Anything else is just empty talk.
Thats why your company needs to assess its strong points from the start. Your organizations strategies must be aligned with its strengths. You cant lose focus by chasing after spurious targets that are promised by the competition if they do not fit your business model.
For example, consider the wholesale mortgage lender that built its business and reputation around high touch personalized service. Real people answered the phone when customers called. This was their historic strength.
During the refinance boom the marketplace began to change and competitors began promising high-tech, low-touch solutions to solve short-term capacity constraints. Our lender decided to go with the flow and do the same, for the wrong reasons and with the wrong setup.
The lender abandoned its original strategy of high touch service, which aligned with the companys positioning, image, promise and differentiation. They chased a technology-superiority strategy focusing on an aspect of the business (technology) that had never previously been one of their strengths.
Investments were cut back in recruiting and training of personnel and instead put into building new advanced systems. The results were anything but positive.
The “me too” strategy was not the way to go. Heres why:
- Their customers bemoaned the loss of the personalized service orientation,
- Customers didnt believe that this particular lender could deliver technological excellence
- The organization risked losing its relevancy and preferred vendor status with many loyal customers.
- The lender disregarded its best marketplace strategy one that was compelling, differentiating and feasible
The moral of the story: There are many different viable strategies. The point is to determine the marketplace strategy that is best for your organization and stick with it. Follow my strategic planning advice and you will create a marketplace strategy that actually gets results.