Does Your Business Have a Working Strategy?

The previous Veracle discussed whether strategy is really indispensable for businesses. It ends with a few reflective questions for business people.

One of the questions relates to the types of strategies adopted by businesses. No, it does not refer to the cost-based, differentiation-based stuff. It refers to types of strategies at a more fundamental, and practical, level.

The question asks whether your business has a working strategy.

What is a working strategy?

We know that a strategy is a plan of action designed to achieve long-term goals.

A working strategy is a plan of action that incorporates the components essential to achieve the goals.

Before we discuss components of a working strategy, let us first understand the strategies businesses typically employ.

A close observation of businesses reveals interesting insights about the strategies they use to operate and grow.

Such strategies classify into three types.

1. Nope Strategy
2. Hope Strategy
3. Deliberate Strategy

The names given to these strategies might sound ludicrous, but the underlying phenomena are visible all around us.

The first two approaches in the list above are examples of what not to do. Yet, this is what many businesses still do.

The third approach focuses on developing a working strategy. This is the strategy successful businesses implement.

The three types of strategies are different based on the attitudes of executives running the businesses. The difference comes from two factors. First, “the need for predictability of positive outcome”, and second, “the risk propensity to commit resources to grow”.

The need for predictability of positive outcomes

The need for predictability of positive outcomes means whether the executives are keen to consciously make the growth happen, rather than leaving it to uncertainty in the face of a constantly changing business environment.

In simple words, executives’ need for predictability of positive outcomes is high when they are growth-oriented and cannot tolerate uncertainty for long. And executives’ need for predictability of positive outcomes is low when they are cost-saving oriented and are afraid to lose what they currently have.

For instance, Kodak is an example where the top management was cost-saving oriented. They were afraid to lose their film business and so, were reluctant to look beyond film for future growth areas.

The risk propensity to commit resources

The risk propensity to commit resources for growth means the willingness of business executives to expend resources – energy, money, and efforts – to consciously make the growth happen.

To illustrate, Xerox and Sony help us explain this phenomenon.

Xerox was actually the first company to invent the PC. Surprised? But, it is true.

Yet, they did not commit resources to its advancement thereby losing the market share to Apple. Smith and Alexander even wrote a book about Xerox called: “Fumbling the Future: How Xerox Invented, then Ignored, the First Personal Computer.”

On similar lines, Sony actually had the technology to launch a product even better than the iPod. But the executives were too afraid to commit resources to test out something new, eventually losing to – guess who? Apple again.

So, how do these two factors influence Nope, Hope, and Deliberate Strategies?

“Nope strategy” is one where business executives have an operational business but have no real working strategy to grow the business. The business executives are oriented towards protecting what they already have, rather than creating new areas of strategic growth.

Nokia and Kodak are two prominent examples of companies failing to Nope Strategy.

Nokia is discussed at length in the next Veracle.

In the “Hope strategy” approach, business executives are keen on the positive growth outcome but are not inclined to commit the resources required for it. The executives operate the business by doing a lot of the same things. The business has some inexplicit approach that is rooted in the belief that if a business follows the industry best practices and adopts the prevalent marketing trends, it should grow.

On probing them, one hears an implicit hope that a working strategy will somehow emerge from the many best practices followed.

Hope strategy is a bit tricky because it does not sound wrong. Here, the business outcome is unpredictable because it varies based on many environmental factors.

What about Deliberate Strategy?

“Deliberate strategy”, on the other hand, is interesting. Here, an organization devises a plan of action that includes the components of a working strategy. This is to make it work in the context of its environment. It includes defining a specific business objective that is both measurable and achievable. Thereafter, the business develops a deliberate plan that serves as a working strategy to achieve that business objective.

Apple’s growth over the last decade is evidence of how deliberate strategy succeeds. Amazon is another example of a firm growing in this manner.

At Veravizion, we believe in employing a deliberate strategy to help our clients define and achieve their business objectives. Businesses have too many resources at stake to not employ a strategy that truly works.

Circling back to working strategy…

A working strategy, then, is one that assists an organization to achieve its business objectives in a predictable manner.

Predictability is the key.

That is why deliberate strategy is important!

In the next three Veracles, we will dig deeper to understand the attributes of each type of the strategies. We will discuss these with examples to find out the strategy that works.

Related Posts:

• Strategic Transformation Part-1
• What does Digital Maturity really mean
• Are you survival-oriented or a growth-oriented executive?

<– Is business strategy really indispensable?

Can a business still win with a Nope Strategy? –>

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Cover photo credit: photo by ricardo frantz on Unsplash