Month: September 2018

10 Key Points – Business Transformation for Competitive Advantage

What does it take for an organization to culminate its journey from strategy to execution during a transformation, thus leading to a competitive advantage? Although, this is a broad and deep question, here are 10 points based on our experience on transformations.

  1. Competitive advantage is about providing unique and sustainable value to the customer. It is often described in many ways, be it through price, service, quality or a combination of various factors. At the end of the day, it will get reflected into an organization’s financial and operational performance. Customer is king and customer loyalty is the real currency for an organization, which is the real test of measuring competitive advantage.
  2. Competitive strategy should drive profitability of the organization. Market share or penetration without profitability will not help the organization to be sustainable. Also, price wars will not help in long-run and the value proposition needs be much broader to compete and increase the scale and size of benefits to an organization. To deliver a unique value proposition that is of strategic importance and truly a differentiator, may need a tailored value chain.
  3. A core competency is not enough, although it’s the foundation of a good strategy. A good strategy considers multiple options, trade-offs and is typically customer centric instead of internally focused. Working from “outside-in” is key to understand the specifics – the why, how and what matters to the end customer. Being able to answer “what’s the right thing to do” using a rigorous fact-based and data driven approach is an essential part of the process but it is equally important to capture the intangibles and garner stakeholder buy-in considering cultural context of the organization.
  4. Learning to say “NO” to certain things is equally important while defining the strategy, otherwise it may soon get chaotic and you may be working in “two parallel systems.” The clarity and positioning of strategy to create a “burning platform” will go a long way, especially when it comes from the senior most executives within the organizations. Employees want to know what, how and why the organization is changing the course of action. So a short, clear and consistent message delivered with conviction through various forums will drive engagement at all levels. You need to align and make it absolutely clear to organization as to what it “will” and “will not” do going forward. These trade-offs need to be clear to drive sustainable competitive advantage.
  5. You cannot make every customer happy when making conscious strategic choices.This selectivity is a natural outcome of strategy and trying to make everyone happy may result in commoditization or dilution of the strategy. Selecting the growth opportunities and battles in a competitive market is important considering limited number of resources. A strategy that’s aimed at pleasing everybody may be weak in substance and focus.
  6. Sometimes organizations find it comfortable and safe to play in that “grey” areawhere you can blend uncertainty with flexibility. It may sound as if the organization is agile and responsive to the changing needs but really it’s not standing up for anything specific that gives the edge or competitive advantage. Commitment to the strategy from all levels within the organization starting with senior leaders will drive the required momentum and “speed to value”.
  7. Perfection is the enemy of good. Aiming to achieve “best-in-class” status within a short amount of time may add unnecessary pressure and can be self-destructive for an organization. It doesn’t have to be perfect when you begin the journey; sometimes the value is in just getting started and making gradual tangible progress. Waiting for the perfect solution and time to execute may result in waste of time. After all, “time is money.”
  8. “Culture eats strategy for lunch”, many including myself would have witnessed this quote in action while working on major transformations. Execution is where the rubber hits the road and this is where ideas come to reality and then drive tangible results. A great strategy on paper if executed poorly cannot produce decent results, forget about sustainable competitive advantage.
  9. Strategy is overrated compared to the actual execution. Disciplined execution is critical to making changes stick and driving sustainable financial and operational benefits. Breaking the barriers of cultural biases that maintain “status quo”, driving change management and getting your early adopters is much of an art than science. Changes within the organization need to be digestible and gradual; either too much or too little won’t deliver the expected benefits.
  10. Listen and be open to suggestions from diverse group of stakeholders to develop a robust strategy and ensure its effective execution. It’s easy to get blind-sided with your own biases and past experiences, thus underestimating the risk and challenges within the context of an organization. Diversity of team members and ideas will keep you alert at all times. It is important to objectively assess and scrutinize your strategy and execution plan to mitigate any risks.