“Your strategy should be reviewed and updated on a quarterly basis. Of course, that assumes you went through a disciplined thought process and have a real strategy to start with!” – Stephen Lynch, Head of Strategy and Consulting, Results.com
Does your prospective client company have a strategy? Do you know if your current clients have a strategy for their business? If you’re not sure, then you may want to take Stephen Lynch’s advice and familiarize yourself on how, “through a disciplined thought process”, one goes about developing a real strategy”.
As to whether your clients have a business strategy, I’m not sure that any of us in executive coaching could answer that. After all, the only SME/capability we’re supposed to bring to the table as coaches is “coaching”, not mentoring, or consulting. We may assume that most do have a strategy, since we only end up working with clients smart enough to realize that any leader and his/her company can benefit from coaching. Surely that would indicate that they have a strategy for their business. Maybe, but how good it is, is another issue.
In a blog post on Results.com, Stephen Lynch presented a 10 point pressure test for a company’s business strategy devised by McKinsey – who maintain that most companies can barely pass more than 3 of these tests. Hopefully your company and your client companies can score better?
Here is the test:
1. Will your strategy beat the market?
Perform a thorough industry analysis (at least once per year) to get a clear picture of how the competitive forces in your industry are likely to play out. To beat industry average growth rates you will need a meaningful point of difference that can’t be easily copied or nullified. Mindlessly copying your competitor’s innovations is not a strategy – it is a recipe for mediocrity. Do you really have a winning strategy?
2. Do you have a sustainable competitive advantage?
How will you make money in the future? Do you have a unique strategic position – a concept that you “own” in the minds of your target customers? Do you have special capabilities that can’t be easily copied? Remember that nothing lasts forever.
3. Are you focused on the bulls-eye?
Push for the narrowest possible segmentation of your target market. Clearly defining and understanding your ideal target market customer is one of the most powerful things a company can do to improve its strategy.
4. Does your strategy put you ahead of trends?
Many strategies place too much weight on current trends. But as Peter Drucker said, it is not the trends, but “the changes in the trends” that leaders must keep on top of. These changes creep up so slowly that most companies fail to respond until it is too late to mount an effective response to take advantage of it. They delay taking action; held back by cost concerns, an unwillingness to cannibalize a legacy business, or an attachment to yesterday’s formula for success.
Always look to the edges. How are your early adopter customers acting? What are the small, innovative new entrants doing? What innovations could change the entire industry?
5. Does your data give you privileged insights?
It is easy to be overwhelmed with data – the key is to make sense of it all and obtain actionable insights. Don’t rely on the same data your competitors use. Do you really understand your customers? Companies who go out of their way to experience the world from their customer’s perspective will develop better strategies.
6. Does your strategy embrace uncertainty?
Prioritize all your current threats (things that could derail your strategy) as part of your SWOT analysis, and consider what action you would take if these worst-case scenarios came to fruition. Could you handle it? Do you have a plan B ready to roll out?
7. Does your strategy require commitment and tradeoffs?
Hedging your bets is not a strategy. A full commitment to defined course of action is the only path to sustainable competitive advantage. This requires tradeoffs – you can’t be all things to all people. What are you not going to do?
8. Is your strategy contaminated by bias?
Are there certain assumptions that your business leaders have made and are making regarding you products, services, customers, pricing, market share, customer experience, etc, that will keep you from fully implementing a successful strategy? If so, then get rid of them. Bias has no place in business or in your business strategy.
9. Is your leadership team fully committed?
Many good strategies fail to be executed because of a lack of commitment among the leadership team, where just one or two nonbelievers can strangle a strategic change at birth.
10. Have you translated your strategy into a strategic execution plan? Clearly define where you are going, and make sure everyone knows the specific actions they need to take to play their part. Ensure your budget and resource allocation is aligned with your strategy. Strategy comes first! Effort spent aligning the budget with the strategy will pay off many times over.
So how did your company do? Regardless of how well or poorly your company did, this exercise should provide successful business leaders with many unanswered questions and areas for improvement that will help their companies grow and be profitable.
For those of us in the executive and professional coaching business, think of the value you could provide if you added mentoring and/or consulting into the mix. This exercise would present some unique opportunities. Asking these 10 questions of your prospective clients, as part of your needs analysis process, has three tremendous benefits and will increase the likelihood prospects will engage with you:
- Differentiation/credibility/engaging – It provides us with a great deal of information about the organization, allowing us to have a much more meaningful conversation with the prospect. It differentiates this conversation compared to one a coach would have with no mentoring/consulting abilities, or qualifications.
- Make a bigger difference – It allows us to have an even bigger impact on the client’s success than just coaching.
- Increase client awareness – These are powerful questions. Powerful questions raise awareness. Awareness is the first step to making a change for the better. As a coach, you’re the expert on using the client’s awareness and testing for a motivation to move forward.
Just remember that your prospect’s business could have the best business strategy, one that passes the McKinsey pressure test with flying colors. But without the right people, in the right places and without developing top talent, that strategy is not worth the paper it’s printed on. So, if you’re a coach not qualified to mentor, or consult, how can you partner with another professional who augments your abilities?
What will you do differently to add more value to your clients?
We chose to augment our firm’s capabilities to offer talent acquisition, coaching, mentoring and consulting. We want to help find and develop that talent, as well as help develop a business strategy designed for breakthrough performance.