You Choose the Strategic Driver for Your Organization
As promised, I will share the list of ten strategic drivers you can choose from in setting the future for your organization. The important part of this message is to understand you make a single choice between ten strategic drivers. Remember you can only have one strategic driver for the organization, the only exception is possible when you have multiple business units requiring different strategic drivers.
Today I will introduce you to the ten strategic drivers and share a brief explanation of their meaning. Next week I plan to go into more detail particularly identifying the key strategy to incorporate with each strategic driver. The discipline part comes into play with the identification of Areas of Excellence that must be mastered by the organization or the market leader goal will be missed.
So what are the ten strategic drivers? Here they are…
- Product/Service – A product / service driven company is one that has “tied” its complete business plan to a certain product or service. Everything they build and sell is tied to this concept.
- User/Customer – The company using this strategic driver has decided to “anchor” its business to a class of users or type of customer. This means the company will sell multiple products or services related to this user or customer group.
- Market Type – This company has anchored or attached it’s future to a clear and describable market or category as opposed to a class of users. One example of this type of company was a legal supply store that only sold its products and services to law firms. They product lines covered multiple lines, yet, each was tailored or customized for legal firms. The company did not market to other markets – only legal firms.
- Production Capacity/Capability – These companies or organizations usually have substantial investments in fixed costs – production facilities or large, expensive capital assets and they goal is to keep the assets running or to keep it full. Continuous usage or a “full” status makes it more cost effective generally. Think about Chemicals, Airlines and Printing Plants as examples.
- Technology – The organization using this driver uses technology to gain competitive advantages over other companies. The catch to this definition is to expand your thinking about the term technology – which can take the shape of things that are based upon things other than electronics. The key here is watch out for natural bias regarding the definition of technology. NOTE: This is so important that I will spend an entire post on this Strategic Driver.
- Sales/Marketing Method – A company using this method has a unique way of getting an order from its customer. In fact, all products or services offered by this company must make use of this unique selling technique. Again, beware of the natural bias to say – all companies have a sales and marketing method. The test is – is it truly unique or only a standard operating sales method?
- Distribution Method – These are companies that have a unique way of getting their product or service from their place of operation to their customer’s place of operation. The distribution system is unique and usually unchallenged relative to its efficiency and effectiveness. Utility companies are a prime example of this driver.
- Natural Resources – This one is almost too easy – a company has access to, control of or is in pursuit of natural resources and their survival is dependent upon these factors – then they are a natural resource driven organization. Classic examples are found in the oil & gas industry, the mining industries, and the lumber and timber industries.
- Size / Growth – These companies have chosen a strategic driver interested only in growth for growth’s sake or for the economies of scale due to size of the operation. History has shown many organizations focused upon this driver are focused entirely upon size and growth rather than profitability. Many of these organizations have failed during difficult economic environments.
- Return / Profit – Another bias to overcome when discussing this driver since most people feel that all businesses are in business to make a profit. While that is a logical premise, the organization that chooses this strategic driver is only concerned with making a profit and ALL they energy is devoted to attaining profits – usually with a short term focus. These are the financially driven hedge funds or venture capitals that are only concerned with turning a profit from an asset – with asset defined as a company or group of companies under a holding company banner.
There you have the basic definitions linked to the each of the ten strategic drivers for an organization. Based upon my experience with organizations – including my own – this is one of the most important concepts for executives and leaders to use and monitor.
During the years of working with the leaders of organizations, the root cause for under-performance for the organization or the business units within the organization was directly related to a lack of understanding of this simple concept. Now, I use the term simple here which has no relationship to the term easy. In fact, simple means it is clear as to what to do, the hard part is in the execution of process. Why is the execution hard? Because it takes discipline to follow the rules of the choice of strategic driver.
I will go into more detail with several of the strategic drivers during the coming week. My goal is to assist you in becoming a more effective leader and this – to me – is one of the most important, yet misunderstood, things you must do to be successful. If you have no Strategic Planning Process or System for Creating Your Future, then contact me immediately and we can discuss your choices. You can contact me at 901-757-4434 between 9 to 5 Central Time – USA.
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