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Writing good clear strategy
A strategy should be clean, clear and simple. Having the right insights and asking the right questions brings clarity, speed and success. This is how.
Clean, clear and simple
A strategy is a narrative, a collection of assumptions and decisions strung together suggesting why we need to do things and how in order to deliver wanted results (1). There are simple, clear ways to do strategy and there are deep, convoluted and perpetual ways.
A strategy is a distinct idea, an insight into why and how we are going to win. But the more undecided or vague we are; if we don’t know how to win or are unclear on the leverages at our disposal. The more muddled the strategy and the worse it will be at guiding people and what comes next.
Strategy with limited time and resources
Not everyone has the time, experience, expertise or data available to do deep strategy. For some their market is either moving too fast or there simply aren’t the resources available to do intricate work.
This article is not for the experts, savants or theorists out there who’ve spent a decade or more perfecting the thoroughness of their own masterful frameworks.
This article is for people starting out with strategy
This is an approach to strategy for people who might have never done it before, need to do it in a week or a day, for teams operating in unpredictable environments or where the need is to move faster with shorter steps rather than in long, slow strides (2).
Or for people who feel they just don’t have enough data or insights and that too much strategy means too many guesses.
This is for you.
Let’s get started:
A strategy should include a shared understanding of what and why there is an opportunity, how we are going to win and what the desired outcomes are.
These are the four questions a company needs to answer:
- What is the desired business outcome?
- What is the desired customer outcome?
- What is the customer behavior unlocking these outcomes?
- What is the company offering to the customer supporting their behavior?
With these four simple questions the organization should be able to answer:
- Why are we doing this / what is the business impact we want to achieve?
- Who are the customers, and why is there a business opportunity?
- What is the opportunity and how can it be measured?
- What has to change to unlock the desired results?
- What does the company need to do in order to support the change?
Does a strategy need to answer more things? Depends. But in a low resource, fast moving environment, these are the four questions we need to answer at a bare minimum to prove we have a strategy that:
- Solves a problem that exists
- Ensures the company can offer anything of relevant value
- In order to make something happen (behavior)
- That is likely to unlock the desired outcomes (for both the customer and the business)
Let’s look at the four questions and how we answer them:
1. Start with the business need and measurable desired outcome
A business need-statement contains two parts:
- The desired measurable outcome (the result)
- What the company needs to happen to achieve those results
Please note that:
- A result and a need are two different things
- How to win comes later (two steps further down in this article)
e.g. let’s say we’re a company making cargo-bikes to families with young children. Our desired outcome is to increase our market share by 5% (this is the result). We decide based on our insights and assumptions that in order to achieve this result: “we need to establish ourselves as the go-to brand for family-friendly transportation solutions”.
We haven’t made the decisions yet for how to get there, but we’ve clearly decided:
- Our desired measurable outcome (increase market share by 5%)
- What we need to happen to achieve those results (establish ourselves as the go-to brand for family-friendly transportation)
For the business need-statement I recommend including the following:
- In which situation (the opportunity)
- Do we want more or less of what (the progress)
- In order to achieve which outcome (the result)
Using the cargo-bike example we can break the statement down like this:
- In which situation: family-friendly transportation solutions
- What is the progress: establish ourselves as the go-to brand
- The result: increase market share by 5%
A customer-centric approach:
For some the need-statements can be purely customer-centric.
Whereas in the the cargo-bike example the need is all about the company (“.. establish ourselves”), it can also be focused on the customer: what do we need the customer to achieve in order for us to achieve our measurable desired outcome?
e.g. for an energy efficiency startup I co-founded (eld365) we needed our clients “to experience lower energy costs, without effort, investments or expending internal resources.” If we were able to find the clients who wanted this and support them it would mean measurable value back to our business.
Before we continue spending time on how to deliver on our chosen need , let’s check in with the customer to make sure they have their own needs which are aligned with ours.
2. The customer need and measurable desired outcome
Equal to the business the customer is also trying to achieve something. They have a desire for progress (need) and a measurable outcome.
Similar to the business this can also be answered by a simple statement declaring:
- In which situation (the opportunity)
- Do I want more or less of what (the progress)
- In order to achieve which outcome (the result)
Using the previous cargo-bike example:
“When I need to transport my children to school and run errands, I need a more eco-friendly transportation option in order to reduce my carbon footprint.”
“I need more fun and distraction free quality time with my family during weekends.”
Compared to a company a person would seldom actively measure that they are reaching their desired outcome, but they will have a perception of success or not (e.g. riding the bike is eco-friendly, or we had great fun with the bike this weekend).
Segmentation
The customer need-statement can also function as customer segmentation.
According to Clayton Christensen segmenting customers based on what they need and what motivates them is “the fundamental unit of analysis” (4).
Christensen points out that knowing what the customer needs is more important than knowing who they are:
Knowing that I am a 65 year old man living in Boston with a professorate at a University, two kids in college, a station wagon and a dog will probably tell you that I read The New York Times in the morning, but it won’t tell you why I read it. — paraphrasing Clayton Christensen
As an example, let’s say you are a conference organizer for business professionals and have identified two target groups based on their needs:
e.g. [as a Growing star] “I need to stand out in a competitive environment, and thinking differently helps me bring unique ideas to the table.”
e.g. [as a Team leader] “Our team struggles with the same challenges repeatedly. We need to approach problems from a new angle to find effective solutions.”
The alignment
Critical to this part of the exercise is to make sure your desired business need is relevant to something the customer cares about. We do this by ensuring the customer and the business statements align.
If you can’t find any likely customer needs matching your desired business need then you might have a solution to a problem that doesn’t exist (5).
NB! Remember to also make sure that the customer need is significant enough for them to be motivated to act. E.g. everyone wants the security of a good house insurance, but very few are motivated to make a significant effort to make sure they are getting the best insurance, and especially not a marginally better one.
3. The behavior
Through the customer and business need-statements we have identified aligned opportunities and desired outcomes. With the behavior-statement we want to articulate the customer change / behavior that will lead to these outcomes.
The behavior-statement asks the company to make an assumption about what the customer will do (behavior) given their own motivation (need) that will lead to the desired outcomes (for both the business and the customer).
Important to remember is that customers often don’t buy products but choose behaviors.
This is because customers achieve what they need through behaviors, not products. Just owning a product doesn’t accomplish much. It is when these products get put to use through behaviors they support the creation of value.
A customer’s world isn’t organized into product categories, but rather situations, behaviors and outcomes.
Companies can often find their fiercest competitors to be very different from them, even offering entirely different behaviors, but with the same outcomes in mind.
e.g. If I’m a light sleeper in need of better sleep. I can hire different products supporting a variety of different behaviors. It could be the act of sleeping (product: better mattress), taking some pills before going to bed (product: pills), or performing some routines to ensure better sleep quality (product: mobile sleep routine app).
It is therefore incumbent on a company to not only know their product, but also the behavior the product invites which essentially brings value to the customer and the business.
In short: a product does not produce value, it enables a behavior that produces value.
A growing business needs to promote both the behavior and the product.
Articulating the behavior:
There is no sentence structure here. Just clearly articulate likely behaviors (matching the customers motivation / need) that we assume would lead to the desired customer and business outcomes.
e.g. for our previous conference example. What are the behavioral changes for the different segments the conference wants to support?
a. The Growing Star wants to bring new ideas to the table at work.
b. A Team Leader wants his team to approach problems from new / more angles.
c. A Manager wants to inspire the team
d. The Marketer wants to see gaps and opportunities competitors aren’t seeing.
There is not much magic / secrecy to the process. It is basically only finding the insights: what needs to happen to produce results?
Alignment:
At this point the team can perform an important exercise. It can make sure the behavior is likely to emerge from the customer need, while at the same time is likely to produce the desired customer and business outcomes.
4. The Customer Value Proposition
We now have a set of desired business needs aligned with our customer’s needs and we know (assume) which customer behavior will lead to the desired outcomes for both the customer and the business.
The last question is therefore: how can we make this happen?
As mentioned: an organization is a collection of people and resources working together in order to achieve something.
With the Customer Value Proposition we therefore need to identify what combination of expertise and resources we can combine into what unique proposition which is likely to motivate the customer’s behavior?
For our previous cargo bike example we had decided that we wanted to achieve a 5% increase in market share through: “establishing ourselves as the go-to brand for family-friendly transportation solutions”. In this fictional example the company chooses to the following benefits for how to get there: ”.. emphasizing our safety, convenience, and environmental benefits. Offering flexible financing options, and ensuring top-notch after-sales service”.
How to find your own benefits and Customer Value Proposition? I recommend doing this in two steps:
Lending from Rukstad and Collis and their article ‘Can you say what your strategy is’ (6). The way to get to a good Customer Value Proposition is simply:
A. List out the capabilities / competencies or resources at your disposal that you can use or pool to motivate the customer to the desired behavior.
For our electrical efficiency startup we chose to focus on the following benefits based on our insights into the market and what we could offer: simple, profitable, precise, efficient solutions and services.
B. Articulate your offer through a statement that both aligns with the customer motivation / need and is unique to other competitors.
B is the hard part. Because the customer value proposition is not a solution, but a clear promise to the customer of the measurable benefits they will experience (7).
e.g. for our Conference example a Customer Value Proposition is not: “a conference”, but rather “a community of ideas and discussions around new perspectives’ . The execution team decides it’s “a conference” later if their work finds that is the best solution.
e.g. for our [energy efficiency startup] a Customer Value Proposition is not: “real-time data and AI”, but rather “fully automated energy efficiency management” . The Customer Value Proposition helps execution teams focus on what good looks like, helping them decide and design the best experience.
Alignment:
This is the fun part. As now everything has to come together:
Check the following:
- Have we identified a relevant business outcome?
- Are there customer needs relevant to the desired business outcome?
- Is the behavior likely given the customer need / motivation and will it unlock the value to both the customer and the business?
- Is the Customer Value Proposition feasible to the company, related to the customer need and likely to influence the desired customer behavior?
If we can check of positive responses to all these questions we have a good clear strategy helping beginner teams move quickly through the strategy process while building solid measurable guidance.*
Congratulations, you have a strategy.
*depending on the role of your strategy this is it, or there are more steps (which I will draw out later)
Resources and links:
(1). Roger Martin, Where to Start with Strategy?, https://rogermartin.medium.com/where-to-start-with-strategy-bae40506304c
(2). Aron Dignan, II. The Responsive Organization, https://youtu.be/FYq8ozcPNII
(3). Helge Tennø, The Outcome Economy, https://medium.com/design-bootcamp/the-outcome-economy-17431e5e2991
(4). Clayton Christensen, What Customers Want from Your Products, https://www.library.hbs.edu/working-knowledge/what-customers-want-from-your-products
(5). Helge Tennø, Are you solving problems that don’t exist?, https://medium.com/better-programming/are-you-solving-problems-that-dont-exist-c36685ad8c8b
(6). Collis and Rukstad, Can you say what your strategy is?, https://hbr.org/2008/04/can-you-say-what-your-strategy-is
(7). Wikipedia, Customer Value Propositions, https://en.wikipedia.org/wiki/Customer_value_proposition
