Business Strategy Made Simple(r)
Use the “Strategy” slice of the Welch Business Triangle to distill unmanageable complexity into clear priorities
Talking about business strategy is wildly different from facing real strategic business problems. When business leaders say “Strategy” we likely picture calm, thoughtful, dispassionate people considering clearly defined choices. Picture chess grandmasters, offensive coordinators watching game clips, or military leaders watching developments on a map. Wouldn’t we be lucky if business problems could come to us so neatly arranged?
Instead, real life business problems present themselves more like a bird’s nest that has been thrown on the ground, stomped on, pulled apart and then thrown in a basket – the contents of which are delivered to us with a request, “Please fix this.”
When I took on my first CEO role, I faced just such a situation. Our revenue had plummeted, safety was abysmal, productivity was bad, our costs were uncompetitive, our systems were broken, and we couldn’t count on each other to do our parts. The situation was confusing and disorienting, with an overwhelming number of problems across the business.
Clearly, we had the wrong strategy. But what was the right one? What changes would really matter? To find out, I went on a listening tour in which I interviewed people across a wide range of roles and levels. I asked, “What needs to change or improve to justify reinvesting in this business?”
My interviews created a list of 83 issues that knowledgeable people believed cried out for fixing. That’s a LOT of issues! I pushed and pulled, prodded and talked. Eventually, I boiled the list down to four objectives. To achieve those objectives, we needed to accomplish five goals. Five goals, even five huge and daunting goals, are far easier to work on than 83 issues! Thus, we were then able to develop a new strategy specifically to accomplish these goals.
Our new strategy, captured in a graphic like the one below, was truly a “made-from-scratch” recipe.
Our story has a happy ending. We improved our safety, brought down our costs, fixed our systems, and improved materials management and project planning. In the process, we won multi-year commitments from multiple customers. The business is still thriving today.
Could I have gotten us to this new strategy more quickly? Back then, no. Today, yes.
In the years that followed this formative experience, I kept looking for ways to make complex business situations more understandable and manageable. When I transitioned from CEO to advisor and executive coach, the Welch Business Triangle became my tool for helping executives understand what kind of issues they faced. In turn, each slice of the triangle – Strategy, People, and Finance – contains a set of questions that help executives clarify their specific business issues and develop a way forward.
Within the Strategy slice, there are five questions that could have helped me, and that can now help others facing strategy dilemmas. Using those five questions, I could have designed my solution much more quickly and eliminated much trial and error.
If you have determined that you face an issue with your strategy and want to be clearer and faster at developing your response, ask yourself these questions:
Is the value proposition we offer our customer clear and attractive?
Do we go to the right places to compete for customers?
Once there, do we know how to win customers?
Do we have the right capabilities in place to win?
Do we have the right systems in place to win?
Following the 80/20 rule, these five questions will give you the most clarity in the least time when self-assessing your business strategy. Real-life businesses are more than just complex. They are complicated by competing interests, personality clashes, emotional tensions, and relentless time pressure to fix every problem immediately. Without denying that complexity, these questions can help you clarify your thinking and guide you towards the strategic decisions that will have the biggest positive impact.