At a time of year when many companies and Senior Leadership Teams are reflecting on what they want the year ahead to be all about, now is a great time to reflect on the critical elements of your strategy that are going to drive your flawless execution to Scaling Up in 2019.
What is the thinking you need to complete to identify your differentiated approach to success?
A great framework we use to help define your brand such that everything aligns to it is ‘The 7 Strata of Strategy’, our “page behind the page” of Scaling Up’s widely implemented One Page Strategic Plan - used by thousands of companies in the mid-market globally.
The challenge is balancing all the complexities of strategy whilst keeping it coherent and simple.
So what are the 7 Strata?
1. choose the words you want to own in your marketplace
In the same way that Google dominates “Search Engine” or Tim Ferris “4 Hour Work Week” what are the words that you need to dominate so that your Core Customer will find you when they are in their search engine?
Remember, it is not necessarily about ‘owning’ the most popular terms. What is the niche you want to dominate?
Then, as author David Meerman Scott says,
You are what you publish
Having identified your key words it is then about publishing videos, white-papers, case-studies that educate your customers about you and the words you wish to own.
2. know your sandbox and its brand promise
This is about understanding:
Who/where are your 'juicy' core customers?
Who are the people/organisations you really want to do business with and who get tremendous value out of doing business with you? Likely to drive greater profit, they pay on time and willingly and enthusiastically refer business to you.
what are you really selling?
Does your offering completely do the job that your customer needs it to?
What are your three Brand Promises?
What is the experience you are promising your customers that differentiates you from the competition. Southwest Airlines is known for; Low Fares, Lots of Fun, Lots of Flights. Naomi Simson, founder of RedBalloon, had; easy to use website, recognisable packaging, onsite support until one of her friends shared that she tended to use RedBalloon for research and then booked direct with the vendor ‘assuming’ it would be cheaper. That ‘aha’ moment led to “100% Pleasure Guarantee”, essentially a price guarantee – 100% fee refund if you pay more with RedBalloon than purchasing direct.
What are then your Kept Promise Indicators?
How do you make sure you keep your promises so that you don’t lose customers or receive negative word-of-mouth publicity? Could be as simple as tracking that every inbound call is answered within three rings. At RedBalloon part of it is having a team monitor the thousands of experiences it offers to make sure customers can’t buy it more cheaply from other vendors
3. make it hurt to break your promise
If there are serious consequences for the team if a brand promise is broken you are all focused on minimising the risk of it happening. This is what Jim Collins refers to in his Harvard Business Review article
Turning Goals into Results: The Power of the Catalytic Mechanism
By promising to refund 100% of a RedBalloon gift voucher’s cost if the customer could find it cheaper it ensures the whole team are focused on keeping the price promise.
What might be the Catalytic Mechanism for you and your team?
4. create a one-phrase strategy
Notice that this is about identifying what you intentionally don’t plan to be good at. In the same way that IKEA’s business as the ‘flat pack furniture’ provider involves lots of trade-offs which mean many people choose not to buy there. Yet with approximately 7% of the Global market it is the largest furniture retailer
5. support your one-phrase strategy with differentiating actions
Underlying the one-PHRASE strategy is a set of specific actions that represent HOW you execute your business differently from the competition. The key is looking for things that are hard for your competition to copy. What are your differentiators?
6.establish your "x factor"
To establish and hold onto your competitive edge, you need to aim for at least a 10x underlying competitive advantage over your rivals.
So how do find your X-Factor? As Verne Harnish recommends, in ‘Scaling Up: How a Few Companies Make it and the Rest Don’t’, start by asking:
What is the one thing you hate most about your industry?
What is driving you nuts?
What is the choke point constraining your company?
How can you break industry norms?
7. measure your profit per x and bhag™
Rounding out the 7 Strata is Jim Collin’s overarching KPI “Profit per X” and your measurable 10 to 25 year goal or “Big Hairy Audacious Goal” (BHAG™) from his book Good to Great: Why Some Companies Make the Leap … And Others Don’t.
Profit per X represents your underlying economic engine and generally ties back to your One-Phrase Strategy. For example; Southwest Airlines focuses on Profit per Plane which ties in to their “Wheels Up” One-Phrase Strategy compared to a lot of airlines using Profit per mile or per seat.
BHAG™ aligns with your purpose and in Collin’s words should align with all the components of your strategy.
So there you have “The 7 Strata of Strategy” elements ...
Recognise that getting all this worked out takes time - so get it down, then get it right. Don’t work in isolation, use colleagues, customers, and advisors to help. Don’t forget that strategy is about differentiating yourself from the competition so as you work through this also have your team reflect on how your competition might fill in each one. This will provide greater insight into your market and potential new ways to differentiate.
SO WHAT MIGHT YOU DO NOW?
SCALING UP BUSINESS GROWTH WORKSHOP
If you are interested in further exploring how to leverage simple, actionable, and practical tools to help you Scale Up why not come along to the Scaling Up Business Growth Workshop we are running in conjunction with our partner SWAAB on Tuesday 19th, March, 2019. Would highly recommend bringing along members of the Leadership Team to work together on your plan to Scale Up.
SCALING UP QUICK START GUIDE
Alternatively, if you would just like to learn a little more about Scaling Up - grab yourself a copy of the "Quick Start Guide".
THE 7 STRATA WORKSHEET
If you would just like to get stuck into working on your 7 Strata Strategy - grab yourself a copy of the "Strategy: 7 Strata" Worksheet.
Scaling Up: How a Few Companies Make it...and Why the Rest Don't
The New Rules of PR and Marketing
David Meerham Scott
Good to Great: Why Some Companies Make the Leap and Others Don't
IMAGES SOURCED FROM WWW.SHUTTERSTOCK.COM
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