Think wide to succeed: How will you compete?
I am a strategist.
There you go, that makes it clear to you what I am and do, just as you instantly know what a dentist or a U.S. President is and does, right?
Sadly, I know it’s often not clear at all. Unlike the sport of Pickleball or the pursuit of everything Barbie, strategists aren’t the rage. We aren’t on everyone’s tongue. But we should be. We’re the ones who guide organizations to be more successful and to better serve their customers.
When I am asked what a strategist does, I have no glib or quick answer. If I turn to my professional organization, the International Association of Strategy Professionals (IASP), for the answer, I can reference its newly updated Body of Knowledge 3.0 for strategy planning and strategy management.[i] The BOK 3.0 tells me that a strategist works in or with organizations to:
Formulate Strategy
Transform the Organization
Execute Strategy
Engage Stakeholders
Govern Strategy
Of course, that explanation begs the question, what is strategy? Again turning to the BOK 3.0, one learns that strategy is “the high-level guidelines an organization adopts to provide value to its stakeholders and/or gain an advantage over competitors. Whether these guidelines are deliberately designed and/or emerge in time, they determine how the rest of the efforts of the organization will be deployed.”
That explanation does not exactly roll off one’s tongue. I prefer strategist Max McKeown’s explanation, that strategy is “shaping the future” to get to "desirable ends with available means.”
As a strategist, I see my greatest value to organizations, leaders, owners, professionals, and entrepreneurs as pushing “wide thinking” questions and then promoting follow-though on the answers.
What’s wide thinking, you ask? In essence, it’s strategic thinking. It amalgamates many types of thinking: critical, creative, design, lateral, systems, and more. Wide thinking is:
Getting out of the weeds and the day-to-day.
Recognizing the interconnectedness and interdependence of the elements within a system and that changes or actions in one part of a system can have profound effects on the entire system.
Separating causes and symptoms, that is, effects, and being hypotheses-driven.
Thinking backward from the desired future and then thinking forward to find the best path to achieve it.
Using indirect and creative methods to see problems from new perspectives to gain insights to find innovative solutions.
Thinking in time: Looking at how the picture will change and the answers will play out as time passes.
Seeking what’s most desirable, given what’s technologically possible and economically viable.
In my ongoing work with organizations and decision makers, a host of problems, issues, and opportunities repeatedly surface. My client may raise a topic worthy of wide thinking or I may see its shape looming around us as we work toward a better future.
Important “wide thinking” strategic questions that I frequently see emerge for organizational leaders include:
How will you compete?
In what ocean will you sail?
What’s your differentiation?
Maximize profit or mission?
Values to guide actions: What are the organization’s values and what do they lead you to do and not do?
Business scale: How big do you want to be? Is the business scalable at an acceptable level of profitability? What are your scaling options? Are you replicable?
Solo or team? When do you add people and create a team?
Market depth and accessibility: Is your market big enough? Can you efficiently access your market?
Bootstrap or OPM (other people’s money)? Slower growth with no strings attached or faster growth with others involved and to whom you are beholden?
Go to market direct or via intermediaries? Are you better off finding and serving customers directly or attaining faster/broader market access with the middleman taking a cut?
Production or provision? Will you produce the product or service or provide a product or service that someone else produces?
Intellectual property: Can you differentiate the organization by creating it?
What’s your ideal client avatar and what does your avatar lead you to do or not do?
Build to last or to sell?
For the start of our series on wide thinking, let’s explore the question of how will you compete.
Wide thinking: How will you compete?
Research on market-leading corporations undertaken several decades ago by strategists Michael Treacy and Fred Wiersema explored the strategic choice of how to compete.[ii] They found that companies in any industry will not necessarily look or operate in the same way. They will cluster around these three value propositions: lowest price, best product, and best service.
Their research revealed a fundamental truth: Market leaders emphasize one dimension on which they compete. On other dimensions, “good enough” is good enough. They don’t try to be all things to all people.
The wide-thinking question is: What’s the basis for competition that you will chose and lean into?
You can be the low-cost provider.
Think Walmart. They win because they offer the low price. But should you compete on the basis of price? Walmart can do it because they have the market power: A huge store network, superb supply chain management, command of suppliers, and overall economies of scale. Walmart’s margins are not high, but the company’s volume results in tens of billions of profit each year.
Former Walmart CEO Mike Duke explained, “At Walmart, it goes back to Sam Walton and the foundation and business model that we simply operate for less, or everyday low cost. We're known for operating in a very efficient way and then giving those savings to customers.”[iii]
Can you achieve market power in your market, like Walmart in mass retail? If not, competing on price will produce paltry or bad financial outcomes. It can be a race to the bottom, leading to failure.
You can provide the best products and services.
Think Apple. They win because their products and services are superb and innovative. Apple can do it because of its great ideas, technical expertise, and resources. Apple has built a system of products, services, and software that work seamlessly together to provide a unique user experience. This ecosystem creates customer loyalty and limits the inroads competitors can make on its users.
Apple CEO Tim Cook explained, “We believe that we're on the face of the earth to make great products and that's not changing. We're constantly focusing on innovating."[iv]
Can you provide the best products or services in your market, like Apple in consumer electronics and software? If not, competing on the basis of excellent products or services can lead to high costs and loss of customers to companies whose products or services are even better than yours.
You can provide superior customer service, “love your customers to death.”
Think Zappos. They win because they provide the best shopping experience possible through free shipping, a generous return policy, 24/7 customer support, and a customer-centric culture that emphasizes going above and beyond to satisfy customers. This exceptional service builds trust and fosters long-term customer relationships.
Tony Hsieh, the late former CEO and founder of Zappos, explained, "Zappos is a customer service company that just happens to sell shoes."[v]
Can you build a superior culture and superb systems that deliver an exceptional customer experience, like Zappos has in selling footwear, clothing, and accessories through its e-commerce platform? If not, competing on the basis of service will lead you to being an also-ran in your market, ceding customers and revenue to companies who provide even better service than you do.
So how will you compete? Make a choice and then lean into your basis for competition.
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For more on strategy, decision making, and execution, check out:
My blog, Strategic Thinking & Strategic Action.
My books, BIG DECISIONS: 40 disastrous decisions and thousands of research studies tell us how to make a great decision when it really matters and AHEAD: Strategy is the way to a better future.
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[i] https://www.strategyassociation.org/page/bok3
[ii] Treacy, M., & Wiersema, F. (1997). The Discipline of Market Leaders. Perseus Books.
[iii] https://www.supplychaintoday.com/two-keys-walmarts-success/
[iv] https://www.macobserver.com/tmo/article/apple_coo_tim_cook_lays_out_apple_ manifesto_with_or_without_steve_jobs
[v] Hsieh, T. (2010). Delivering Happiness: A Path to Profits, Passion, and Purpose. Grand Central Publishing.
