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    Designing a Winning Strategy – A Guide to Competitive Advantage

    5 Critical Choices to Design and Execute a Winning Strategy.

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      Vaughan Broderick

      Vaughan Broderick

      Designing strategy for competitive advantage is often seen as a complex closed-door exercise that only the c-suite executives do.

      Contrary to this, an approach is more aligned with collaborative design thinking than the typical analysis techniques of Pestle, SWOT, Porter’s 5 Forces and VRIO.

      Not to say that these tools do not play their part. However, there is a way of designing strategy that is simple (not simplistic), visual, creative and can be applied at every level of an organisation.

      The Strategy Choice Cascade

      strategy choice cascade

      According to Roger Martin, ‘strategy is not a long planning document, it is a set of interrelated and powerful choices.’ 

      Roger Martin and A.G. Lafley make sense of these choices in what they call the ‘choice cascade’ within their leading strategy book – Playing to Win – How Strategy Really Works.

      The five critical choices are:

      1. What is the winning aspiration? A winning aspiration will look different for every organisation. However, it is essential to define because it crystallises precisely what the team is trying to accomplish. An example might be: Tripling the business within three years and creating a sustainable business model, or, to help our customers be healthier by providing the most nutritional and energising sports drinks.
      1. Where to Play? The five ‘where to play’ components should be worked through individually to answer this question. They are:

      Geography – Which countries or regions will you try and win?

      Customers – What is the profile of the customers you will try to win with? What are the segments such as behaviours or demographics?

      Channel – Which distribution channels will you leverage to win?

      Offer –  What are the products and services that will win with each customer profile?

      Stages of Production – What components of the value chain do you produce yourself?

      1. How to Win? What is your value proposition? Will this be either low-cost or value differentiated?
      2. What Capabilities? What are the critical activities needed for your competitive advantage?
      3. What Management Systems? What is the infrastructure that you will need to execute your winning strategy? The systems may include processes, norms, metrics and culture.

      Designing Strategy - Step by Step Guide

      Strategy Steps Framework

      There are some critical steps to develop a winning strategy:

      1. First, map out your existing strategy using the choice cascade. Understanding your current strategy provides the reality check to move forward from.

      At this point, researching the environment would be helpful to understand the foreseeable threats such as technology changes, competitor moves, trends, economic changes.

      1. Second, critically analyse the current strategy and identify the problem. An example might be that new competitors are entering the market and taking customers.

      However, you need to dig deeper to understand the route cause; perhaps they have created a business model that offers more value at a similar price?

      1. Third, develop your new strategic question. Try using a How might we…? question that is not too narrow but narrow enough to address the problem.

      An example could be ‘How might we meet our customer’s needs while increasing our market share sustainably?’

      1. Ideate potential options for the ‘where to play?’ and ‘how to win questions’. Remember, at this stage, nothing is off-limits, so go for volume.

      Then, perhaps, look out into the market and see how other combines solve similar problems even in different sectors.

      Again, applying a traditional tool like the Blue Ocean Strategy could be helpful to map out various competing factors, and the choices companies are making.

      1. Consider what would have to be true for each idea and identify barriers. At this point, you need to consider the potential strategies through the lenses of customers, company and competition.

      For example, ‘what would this group of customers be willing to pay? Or, ‘what technology would the company need?’.

      1. Rank the most important or most concerning condition. For example, perhaps the most concerning condition is that you are unsure that your targeted customers will be prepared to pay enough for your product or service to make the strategy viable?
      2. Create well-designed tests. Work fast and low-cost whenever you can. For example, if you need to test a new idea directly with customers, perhaps hand-drawn sketches or low-fidelity prototypes would be sufficient during feedback sessions.
      3. Iterate and retest. From what you have learned, take the insights and create new tests. If you get sufficient validation from the low-cost test, increase the fidelity into more thorough tests such as a refined prototype or a market pilot.

      If the insights did not validate the idea, then take these and iterate the idea and retest.

      1. Decide. Most likely, there will not be a clear strategic winner. However, the work that you have put in to get to this point has likely reduced your risk.

      Remember, a significant benefit of the choice cascade is that it lends itself to action and iteration rather than getting bogged down in sticking to a prescribed in-depth document that isn’t agile.

      Benefits of the Choice Cascade

      In my view, the main benefits of the choice cascade are:

      • It provides an ideal balance between creative and analytical approaches.
      • Co-design is at the core, leading to greater stakeholder engagement.
      • It favours action, learning and moving towards the winning aspiration.
      • The choice cascade can be applied within any organisation at any level.
      • Each choice reinforces the other making the organisation resilient.
      • Carefully crafted choices rather than a set of targets that don’t have the ‘how to get there’ piece.

      Designing Strategy Summary

      Roger Martin has used this approach to successfully design strategy with global corporations through to smaller organisations on many occasions.

      As mentioned earlier, this approach harnesses both design thinking elements and analytical methods and is ideal for most organisations of any scale to design strategy.

      The choice cascade is my preferred method, and most recently, I used it with a Practice Leadership team within a non-profit organisation to develop a new targeted approach. Read the case study here.

      What is your approach to strategy? Let me know below.

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