I have written about this topic in the past. And your one phrase strategy is as important as ever in the midst of the economic ramifications of COVID-19. Is your one phrase strategy powerful and leading your efforts to recover, grow or pivot? This is a good focus for you next quarterly planning session. All the best. David
If you can’t state your strategy in a sentence, you don’t have one!
Many companies think they have a strategy, but usually what they have done is focus on steps, goals, and objectives or issues owners and leadership teams often think about. To have an effective sustainable strategy, let’s be clear on what strategy is not.
- We may want to grow – but growth is not a strategy.
- We may want to go international – but going international is not a strategy.
- We may want to improve our businesses – but improvement is not a strategy.
- We may want to be more efficient – but efficiency is not a strategy.
- We may want to consolidate – but consolidation is not a strategy.
- We want to be beat our competitors – but beating our competitors is not a strategy.
These are all steps we can take – they are not strategies. Many companies become fixated on a particular step or objective and consider it to be their strategy. These companies then literally go over the cliff, because people do not know why they are doing those things.
Strategy is all about the competitive advantage you are able to sustain over time. Patrick Lencioni (author of The Advantage) states that strategy in the simplest form is your plan for success. It is a collection of intentional decisions your company makes to give itself the best chance to thrive and differentiate from competitors.
Though I’ve focused my clients for years on the importance of a one-page strategic plan, let me suggest that a precise “one-PHRASE strategy plan” must be your starting point.
Think of the one-phrase strategy as the focus for the underlying activities that differentiate your company from your competition. The key word is activities. Michael Porter, Harvard’s famous strategy guru, emphasizes in his article What is Strategy, it’s going about your business in a different way than your competitors that defines your strategy.
So, what does a one-phrase strategy look like? Here are some examples from companies you will most likely recognize.
- Wheels up. Southwest Airlines-the more time their planes are in the air, the more profit they make. And it is clearly understood by all employees.
- It’s not about the servers, it’s about the support. Rackspace – one of the first mega server farms realized their service provides more differentiation than their technology.
- Be direct. Dell Computer focused on direct computer sales to you, without a middleman.
- Focus on trading communities. eBay realized this focus was the key to massive growth.
- Low prices, every day. Walmart-need I say more?
- Be the #1 or #2 in every industry in which we compete, or get out. GE – although it has experienced difficult times today, this was the major mantra under Jack Welch.
- Unmatchable value for the investor-owner. Vanguard-focusing on the fact that most mutual funds have a hard time beating the market.
- Meet customer’s short haul needs at fares competitive with the cost of automobile travel. Southwest Airlines – this was their original one-phrase strategy. Yes one-phrases can change!
What do all these phrases have in common? They force trade-offs, test strategic soundness of actions, and they set clear boundaries.
These example companies have relentlessly focused on their one-phrase strategy – channeling all their innovations and energies on striving for its achievement. And in the process they have propelled significant growth and led their respective industries.
Create Your One-Phrase Strategy
Here is a simple 5 step process to develop your own one-phrase strategy (1).
- Draft a working phrase. Summarize your plan to allocate scarce resources in order to create value that distinguishes you from competition.
- Test its endurance. Does it capture the essence of your competitive value?
- Test its communicative power. Is it clear, concise, and memorable?
- Test its ability to promote and guide action. Does it exhibit the three attributes: forcing trade-offs, testing strategic soundness of actions, and setting boundaries?
- Communicate it (chant the rant!). Communicate it consistently, simply, and repeatedly.
This would be a great topic for your next leadership team meeting. Your one-phrase distills your strategy into its unique life blood and communicates it throughout your organization. It drives greater CLARITY. And this is why it is such a critical competitive decision for your company!
Contact me to discuss creating your one-phrase strategy.
All the best,
Copyright 2019-2020 David Paul Carter. All rights reserved.
(1) Transforming Corner-Office Strategy into Frontline Action, Gadiesh and Gilbert, HBR On Strategy, 2011.