Figure Out Your Approach
Summary
TLDRThis video script clarifies the distinction between strategy and strategic planning, emphasizing their importance for business success. A strategy is defined as a set of interrelated choices to overcome a strategic problem, involving shared aspirations, market focus, competitive behavior, and resource allocation. Strategic planning, on the other hand, translates this strategy into actionable plans with initiatives, actions, and results (IARs). The script also stresses the necessity of keeping the customer at the center of these choices to avoid self-serving strategies and potential disruption.
Takeaways
- đ Strategy and strategic plan are not interchangeable terms; they serve different purposes in business planning.
- đ A strategy is a set of interrelated choices made by a company to overcome its overarching strategic problem.
- đŻ The strategic problem is the obstacle that stands in the way of an organization's success.
- đ Shared aspiration is deciding what winning looks like for all stakeholders, including customers and investors.
- đ Market focus and position involve choosing the ideal customer profile, channels, product/service makeup, and geographies.
- đŒ Competitive behavior is about deciding on differentiation, cost leadership, or focus strategy and defining market segments.
- đ Resources and returns involve determining what resources are needed to execute the strategy and the potential returns.
- đ Strategy should be customer-centered; the customer should be at the core of all strategic decisions.
- đ A strategic plan translates the strategy into tangible results through initiatives, actions, and results (IARs).
- đ KPIs are essential for measuring operational and financial performance throughout the execution of the plan.
- đ For further assistance, a free course called 'A Million Dollar Strategy Blueprint' is available at cart.com.
Q & A
What is the main difference between a strategy and a strategic plan?
-A strategy is a set of interrelated choices a company makes to overcome its overarching strategic problem, while a strategic plan is a detailed plan that translates the chosen strategy into tangible results through initiatives, actions, and results (IARs).
Why is it problematic for business leaders to use the terms 'strategy' and 'strategic plan' interchangeably?
-Using the terms interchangeably can lead to confusion and result in a lack of clarity about the company's direction and goals. It can also lead to the creation of a strategic plan that doesn't effectively address the strategic problem or leverage the chosen strategy.
What is a strategic problem?
-A strategic problem is an obstacle that stands in the way of an organization's success. It's the central issue that the company's strategy must address to prevent disastrous outcomes such as losing market share or struggling to attract talent.
How does a company determine its shared aspiration?
-A company determines its shared aspiration by deciding what winning looks like for itself and its stakeholders, including vendors, investors, and customers.
What is meant by 'Market focus and position' in the context of strategy?
-Market focus and position involve deciding on the ideal customer profile, the channels to deliver products and services, the composition of the company's offerings, and the geographies in which they will compete.
What are the different types of competitive behavior strategies mentioned in the script?
-The script mentions differentiation strategy, cost leadership strategy, and focus strategy as types of competitive behavior.
How does a company decide on its competitive behavior?
-A company decides on its competitive behavior by choosing the strategy that best defines how it will compete in the market, such as differentiating itself, being a cost leader, or focusing on a niche.
What is the role of the operating model in relation to the strategic option?
-The operating model is chosen based on the strategic option to best fit the company's needs and to evaluate the activities required to deliver value in its market focus and position.
Why is it important to consider resources and returns when developing a strategy?
-Resources and returns are important because they help a company decide what resources are needed to execute its strategy successfully and what the potential upside or returns of the chosen strategy might be.
What is the significance of keeping the customer at the center of the strategy?
-The customer should be at the center of all strategic choices because a customer-centric approach helps to build competitive advantages, enhance the customer experience, and foster innovation, preventing disruption by more customer-centric competitors.
How does a company use IARs to develop a strategic plan?
-A company uses IARs (initiatives, actions, and results) to break down organizational goals into manageable parts, define objectives, outline action steps, and establish key results to measure progress towards those objectives.
What is the purpose of defining KPIs in a strategic plan?
-KPIs (key performance indicators) are used to measure operational and financial performance, helping organizations track the success of their initiatives and adjust their strategic plan as needed.
Outlines
đ Understanding Strategy
The speaker begins by clarifying the difference between a strategy and a strategic plan, emphasizing that they are not synonymous. They recount their own experience starting a company without a strategy, which led to mistakes and missed opportunities. The speaker outlines the process of developing a strategy, starting with identifying the strategic problem that hinders an organization's success. The process involves four key quadrants: shared aspiration, market focus and position, competitive behavior, and resources and returns. Shared aspiration is about defining what success looks like for all stakeholders. Market focus and position involve deciding on the ideal customer profile, product/service makeup, and geographic competition. Competitive behavior is about choosing a strategy for differentiation, cost leadership, or focus. Resources and returns involve determining what resources are needed to execute the strategy and what returns are expected. The speaker stresses that the customer should be at the center of these choices to avoid a self-centered strategy that could lead to disruption by more customer-centric competitors.
đ Transitioning Strategy to Strategic Plan
In this paragraph, the speaker moves on to discuss the transition from strategy to strategic plan. They explain that once a strategy has been explored and tested in the market, an organization needs a plan to turn this strategy into tangible results. The speaker introduces the concept of IARS (Initiatives, Actions, Results) as part of the plan, which involves breaking down organizational goals into smaller, manageable parts. Initiatives are the aims of the organization, actions are the steps taken to achieve these initiatives, and results are the key performance indicators used to measure progress. The speaker also mentions the importance of defining KPIs to measure operational and financial performance. They stress the distinction between strategy and strategic planning and caution against confusing the two, which can lead to listing initiatives without a clear strategic foundation. The speaker invites viewers to a free course on their website to learn more about developing a strategy and achieving profitability, and they encourage feedback in the comments section.
Mindmap
Keywords
đĄStrategy
đĄStrategic Plan
đĄStrategic Problem
đĄShared Aspiration
đĄMarket Focus and Position
đĄCompetitive Behavior
đĄOperating Model
đĄResources and Returns
đĄInitiatives, Actions, and Results (IARs)
đĄKey Performance Indicators (KPIs)
đĄCustomer-Centric
Highlights
The difference between a strategy and a strategic plan is crucial for business leaders.
A strategy is a set of interrelated choices a company makes to overcome its strategic problem.
Every organization has a strategic problem that stands in the way of its success.
Strategy development begins with identifying the strategic problem.
Shared aspiration is deciding what winning looks like for all stakeholders.
Market focus and position involve choosing the ideal customer profile and how to reach them.
Competitive behavior is about deciding on differentiation, cost leadership, or focus strategy.
Resources and returns involve deciding what is needed to execute the strategy successfully.
The customer should be at the center of all strategic choices.
A strategic plan turns the strategy into tangible results through initiatives, actions, and results (IARs).
Organizations need to define KPIs to measure operational and financial performance.
The strategic plan is a detailed execution plan derived from the strategy.
Confusing strategy with strategic planning can lead to listing initiatives without a clear strategic process.
A free course called 'A Million Dollar Strategy Blueprint' is available to help with strategy development.
The course aims to help businesses reach and surpass a million dollars in profitability.
Feedback from viewers on the strategy explanation is encouraged.
The presenter emphasizes the importance of applying these principles to business for success.
Transcripts
in this video I want to explain the
difference between a strategy and a
strategic plan because they are not the
same thing but often times I hear
Business Leaders use these terms
interchangeably with their teams and if
you fall down the same trap it could be
really problematic for your
organization look when I started my
first company I didn't have a strategy
let alone a strategic plan and as a
result I made a lot of mistakes and I
left a ton of money on the the table and
I don't want you to make the same
mistakes instead I want to help you to
FastTrack your path to success so let me
explain the difference here starting
with strategy a strategy is a set of
interrelated choices a company makes to
overcome its overarching strategic
problem so at the top here we have
strategic
problem in other words every
organization is grappling with an
obstacle that stands in the way of its
success and if it doesn't overcome this
obstacle whether it's losing market
share whether it's struggling to attract
and retain the right type of talent or
whatever may be if they don't overcome
this strategic problem it could be
disastrous for the organization so
whenever I work with companies and I
start building out their strategy I
always begin with the Strategic problem
then organizations need to explore
possibilities for overcoming the
Strategic problem and it involves
walking through four quadrants and
making choices in each of these steps so
number one in the first quadrant we have
shared aspiration and I'm going to
abbreviate here but shared aspiration is
when a company decides what does winning
look like not just for itself internally
but also externally by considering other
stakeholders
such as vendors investors and especially
customers when organizations can decide
on their shared aspiration then they're
ready to move to the next box which
includes Market focus and
position I'm abbreviating and my
handwriting is terrible my kids tell me
all the time so I'll be very clear so
you can grasp these very important
Concepts but in box two here we have
Market focus and position and this
involves a company to deciding who its
ideal customer profile will be and the
channels it will pursue to deliver its
products and services to this ideal
customer it also involves deciding the
makeup of a company's products and
services and the geographies in which
they'll compete and a variety of other
decisions related to where it will
compete so when a company can make
choices about its Market focus and
position then it moves on to the next
box which includes comp
competitive behavior when it comes to
deciding how to compete organizations
can pursue a differentiation strategy a
cost leadership strategy or a focus
strategy and a part of a focus strategy
is defining which Niche a company will
pursue and as part of that segment it
may decide to do a hybrid approach of
the two other strategies that I just
mentioned in other words an organization
can pursue a focus strategy in in that
Focus they can differentiate themselves
or they can choose to be a cost leader
so that's how competitive Behavior
unfolds is when an organization decides
which type of strategy it will pursue in
order to Define its competitive Behavior
also organizations need to choose which
operating model is best fitting based on
the Strategic option and evaluate the
activities that the company is pursuing
in order to deliver value in its Market
focus and position so you can see how
each of these decisions build upon
another in the last box I have
resources and
returns and in this step of the process
a company decides what resources will
they need in order to make this
strategic option viable in other words
what do they need to execute
successfully on their strategy and in
addition what is the upside or the
returns of this given op option so as
you can see here a strategy is a set of
interrelated choices to help an
organization to overcome a strategic
problem to build competitive advantages
to enhance the customer experience and
to Foster Innovation now at the center
of all these squares right here I like
to draw a circle because this is
where the customer should live because
when you're making these choices for
your organization you have to make it
customer centered because if you don't
have the customer at the center of your
strategy then you're just pursuing a
very selfish strategy and if you're not
walking in your customer shoes and
you're not empathetic then you're going
to be disrupted by another organization
that is very customer Centric so the
customer has to be at the very center of
all these
choices this is a strategy folks next is
a plan so once you explore your
strategic options and you choose which
possibil is best for your organization
and you go out there and test it because
remember we'll roll out a strategy
that's our intended strategy but then as
things unfold really an emergent
strategy arises and that's how we build
measure and learn along the way but you
need a plan in order to take this
strategy and turn it into tangible
results so that's where a plan comes
into place so you take this and as part
of the cultivar framework we help
companies
establish I ARS which stands for
initiatives actions and results and
really what we're doing here is we're
taking organizational goals and we're
breaking them down into bite-size pieces
which includes an initiative what the
organization aims to achieve their
objective the action steps they will
take to push their initiatives forward
and then the key results that they will
measure to determine whether or not
their initiative are on track in
conjunction with this organizations need
to Define their kpis This Is How They
will measure their operational and
financial performance along the way so
as you can see here this is a strategy
then organizations use iars to develop a
plan they establish initiatives actions
and results and that's a part of the
plan to go execute and bring forth the
strategy that they've designed here so
as you can see here there is a huge
distinction between strategy and
strategic planning and that's why it's
important to disaggregate these two
things so you don't confuse them because
otherwise what you'll do is you'll say
your strategic plan is your strategy and
you'll fall into the Trap of just
listing out a bunch of initiatives
without walking through this critical
process of identifying your strategic
problem your shared aspiration your
Market focus and position your
competitive Behavior
and your resources and returns if you
want help with this process you can go
to cart.com I'll leave a link below in
the video description and there you can
take a free course called a million
dooll strategy blueprint it's free
there's no gimmicks you don't need to
sign up for anything you can literally
go to cvar decom click on the button and
start watching the course today my goal
is to help you to get to a million
dollar in profitability and once you get
there to go to the next level now before
you sign off I want to hear from you
does this make sense if so can I get a
yes in the comments box below also I'd
love to hear your feedback so drop any
comments you have down below as well and
I'll be sure to get back to you and
until next episode all the best to you
as you take these principles and apply
them to your business cheers
[Applause]
sh
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CH - 2| PART- 3 | DEVELOPING MARKETING STRATEGIES AND PLANS | HPSC PGT COMMERCE 2023, IBPS SO , NET
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