All to often the teaching of business models and practices is not only stiff but also overly academic. In other words its full of a academic phraseology while seemingly irrelevant to the typical day-to-day battle. Well I’m set on not only changing that but also debunking the verbiage and providing useable frameworks.
In the first parts of this series on models used to identify competitive advantages we explored the Five Forces Model and an alternative framework the Flagship Model, both of which are great at providing a snapshot of the current situation.
I thought it would be interesting to explore a framework, Strategic Intent, that one can use use to only understand but also tilt the playing field in their favor. What it comes down to it that you can either be a follower – fully driven by external actions – or game changer who can manipulate, and on rare occasions initiate, the competitive forces that eventual dictate the economic gains.
Think of it this way. During any competitive event – tennis, football, car racing – actions are exploited to play into a strength or exploit a competitor’s weakness. Why is Serena Williams so dominate in tennis? It's because others don’t matchup across the board with her speed, agility, and strength. Where they fall short is the point of attack. This potential breach area can come to light during the event but more often than not is identified by observing past performances well before she hits the court. Hours of research and game planning are invested to develop a winning playbook.
Strategic Intent – the emphasis is on intent – grows out of this same ambition and obsession with achieving an objective, be it winning or securing a certain level of success. The framework is based on the principles of W.E. Deming. The essence of Deming’s thinking is that one must create tomorrow’s advantages faster than your current ones are mimicked or leapfrogged. Think continuous improvement.
I happened to have been in an Apple store earlier today – yes I’m a Mac shop – and was reminded of this fact not by their line of computers or phones but by how fast they are willing to cannibalize their software. Every year there is a new major version with the highlighted changes often based on the public’s perception of a competitor’s weakness. By positioning yourself away from competitors you not only enhance your revenue model but also shareholder value.
When studying the framework there are four elements that one analyzes and then rearranges to fine tune business operations.
- building layers of advantage
- searching for loose bricks
- changing the rules of engagement
Layers of Advantage Critically evaluate other areas in which you can improve. Look along the value chain to continuously place additional hurdles. World class track stars do the same by:
- working with their shoe company to produce a product (process machinery) that has the ideal fit, flexibility, and traction
- Employ top notch nutritionist to develop a customized meal plan (system input).
- …., you get the concept.
Loose Bricks Build market share and reputation where they are not (geographic or product) play in the voids. So you might be just shy of the world class ranks in sprinting but you could become the top pusher in bobsleding.
Changing the Rules Don’t follow the leader’s rules or structure. Create what works best with your strengths. If one isn’t able to do this todays NFL games would still be predominately based on the straight ahead run and basketball wouldn’t have the hard charging, high-flying fast break.
Collaborating Use know-how developed by others. Acquire and give credit. The best of teams, and after all if you are involved in running a business you are part of a team, look outward for inspiration, knowledge, and joint success. By and far partnership development is a path that we can all take. Look to your champions, customers, and suppliers to see how you can collectively excel.
“There are plenty of teams in every sport that have great players and never win titles. Most of the time, those players aren't willing to sacrifice for the greater good of the team. The funny thing is, in the end, their unwillingness to sacrifice only makes individual goals more difficult to achieve. One thing I believe to the fullest is that if you think and achieve as a team, the individual accolades will take care of themselves.” – Michael Jordan