Does Your Business Have a Working Strategy?

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Does your business have a working strategy

Does Your Business Have a Working Strategy?

Veravizion 2 comments

The previous Veracle discussed whether strategy is really indispensable for businesses. It ends with a few contemplative questions for businesspeople.

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 try to discuss more about what makes a working strategy, let us first understand the strategies businesses typically employ.

A close observation of businesses, including e-commerce companies, reveal 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 (and yet what many businesses in reality do!).

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

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

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

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

Kodak is an example where the top management was cost-saving oriented; they were reluctant to look beyond film as an area for future growth.

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

Xerox and Sony help us explain this phenomenon.

Xerox was actually the first company to invent the PC and yet did not commit resources to its advancement thereby losing in the marketplace 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.

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 example is discussed at length in the next Veracle.

In “Hope strategy” approach, business-executives are keen for the positive growth outcome but are not inclined to commit 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.

Deliberate strategy, on the other hand, is interesting. In this approach, an organization devises a plan of action that includes the components 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 of the last decade is an 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 which assists an organization achieve their business objectives in a predictable manner.

Predictability is key here!

That is why deliberate strategy is important!

It allows an organization to drive their business objectives in a predictable manner.

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

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Cover photo credit: photo by ricardo frantz on Unsplash

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2 Comments

Premanand Chandrasekaran

May 5, 2019 at 3:36 pm

Wonderful veracle as always! However, I wonder if a lot of the use cases presented above are a complete lack of strategy or whether the lack of execution acumen against a strategy? I guess in the end, the end result is the same.

    Veravizion

    May 17, 2019 at 11:39 pm

    Thanks!
    Most of the use-cases mentioned above represent examples of failure due to lack of “Deliberate Strategy”.

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