Consultants tend to use technical concepts and industry jargon when engaging with clients. While there's a time and space for this, the main objective of vocabulary is to communicate ideas clearly, not to sound smart.
I personally repel professionals who explain a simple concept in a complex way. It might cause a powerful strong impression, but this credibility quickly crumbles during client engagements. Clients enjoy and seek clarity.
Strategy is one of these overused concepts that can mean many different things, for many different people. Here's how I look at it, in a simple and pragmatic way.
A strategy is a plan of action to achieve a set of goals. Many people confuse strategy with ambitious vision or goal setting. If you don't have a plan of action, you don't have a strategy.
Below, I list some comments on good strategy based on the work we do with other consulting firms.
Every good strategy has the same foundation.
When we take a closer look at good strategy, there are a few components that are always present. I admire Richard Rumelt’s "kernel" strategy model from his book "Good Strategy, Bad Strategy", which divides strategy into:
- A diagnosis, which is an analysis of your circumstances. We operate in a complex environment but need to simplify it if we want to produce effective change.
- A methodology (or as Rumelt calls it, a guiding policy). It lays out the approach that will be used to tackle this diagnosis, and will be based on your specific knowledge and expertise after solving similar challenges.
- A set of coherent actions needed to achieve the goals. The implementation of different initiatives needs to be aligned with the methodology to be effective.
Take my work with consultants as an example:
- Both my agency and I start every engagement with a diagnosis;
- In my advisory engagements, I use a methodology that proved to be effective with other boutique consulting firms;
- Combined, they will dictate implementation. This ensures we're executing the right initiatives, in the right volume, and in the right sequence to make progress.
A good strategy requires saying more "no" than "yes".
You have limited attention, time, and resources. A good strategy will force you to prioritize and move in one specific direction. If you try to do everything, you will see neither an impact nor any relevant learning from your initiatives.
Almost always, making these tough choices will damage other areas of your business. This is why your goal-setting process is so important - it will guide your strategy, and the parts of your business you want to prioritize. A good strategy is not a goal but certainly requires one.
A good strategy fits your specific situation.
Taking time to create a plan of action is worth nothing if it can't be implemented. As you think about the set of actions and initiatives needed to reach your goal, you should continually ask yourself:
- Do I have the resources for this?
- Does it reflect my current situation?
- Do I have any specific advantage I can leverage?
If you want to quickly grow your top line, be prepared to increase your marketing budget. Don't have the budget? Accept that it will take you longer to get there, and invest your time and attention into improve ROI.
Balancing budget and performance is a feature of good strategies.
A good strategy should be approached like a science.
The scientific method consists of:
- Making an observation that describes a problem;
- Creating a hypothesis;
- Testing the hypothesis; and
- Drawing conclusions to refine the hypothesis.
You can't create a strong plan of action based on intuition. You have to continually measure progress to validate your hypothesis and form new ones when needed (even if your marketing data might often lie to you).
A good strategy is dynamic, not static.
Almost always, a good strategy is far less unique than you might think.
Statistically, you’re five times more likely to have a car accident if you’re talking on a cell phone while driving – roughly the same as if you’re drunk. However, even though many people are aware of this risk, they don't change their behavior. When the phone rings they think: “It won’t happen to me, I'm a good driver.”
This phenomenon is called the inside view – the tendency to ignore lessons others have learned in a similar situation and to believe that our specific situation is somehow different.
The best way to remove the inside view from your strategy is by posing one simple question: Why have other companies in a similar situation to ours succeeded or failed?
95% of your challenges were already solved by other consulting firms in the past. When you think this time is different, what you are really saying is that you will succeed where others have failed. Outside perspective will help you avoid this.
You don't need a complex plan of action. Just one that works.