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Your Strategy Is Happening to You
Most companies think they are following a strategy, but more often your strategy is happening to you.
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Your strategy is supposed to be a map you follow to your goals. You analyze your market, work through various scenarios and build a strategic plan that will get you where you need to go. Your strategy is supposed to be how you take control of your future.
Unfortunately, it’s often the other way around.
The world is constantly changing around us, and absolutely does not care about our plans. Markets shift, competitors move and customers change their minds. Despite all of our best intentions, many more things happen to us than what we make happen.
As a result, most strategies are reactions to changes in the market. Consider that…
Your strategy to change your pricing? It’s due to increasing competition and shifting customer budgets. You’d rather raise your prices and make more money, but it’s not possible.
Your new product strategy? It’s due to a shift in customer satisfaction and maturity in your category. You’d rather be innovative but your customers want stable and predictable.
Your strategy to cut costs? It’s due to the market contractions and macro-economic conditions. You’d rather retain your team and grow it, but the market for capital is hard now.
It’s not a bad thing to react to the market, and you’d be a poor leader if you didn’t. When the rules of the game change you need to change too! Adapting and evolving is how you win in a changing market.
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Even so, your strategy cannot only be reactions to the market or competitors. If you are only reacting, you aren’t leading and you will be at the mercy of market forces. At least part of your strategy has to be taking the initiative and moving things on your own.
How do you take the initiative? Here are some ways:
Go on the offensive. You can happen to your competitors just like they can happen to you. In fact, if they are busy reacting to you they are less likely to make moves you need to react to. Challenge their messaging, pricing and product features. Poach their key customers. Make sure they are worried about what you are going to do next.
Anticipate change. Things might happen to us, but if we anticipate them we can get ahead of them and make sure those changes favor us. If we believe the market is going to contract, we can raise more capital before it does so we have a warchest. If we believe the market is going to expand quickly, we can build the capacity to grow fast when it does.
Take big risks. Reactions are conservative decisions, since something has already happened when you react to it. If you just make conservative decisions you are going to slowly fail, so take some big risks. The more ambitious the risk the better, since the payoff of a big bet can more than offset all of the things that might happen to you.
The reality is that you can never react to everything that happens to your business. Sometimes you’ll just have to take the loss and move on, and focus on taking the initiative elsewhere. The bigger your business gets, the more often this will happen.
In any market, change is a constant. Reacting to change is a fine strategy, as long as you are also taking the initiative.
For more on Strategic Planning, see:
Here is a process for Annual Planning The Actually Works
Making Big Bets is your job as a leader.
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