Strategic Focus

Some people make a big deal about business strategy. The search for books about business strategy is daunting. People do doctoral theses on it, and then they charge huge fees to help huge companies figure out strategy.

But this is the real world. Your business. And when you pull it back down out of the ivory tower, the good strategies are usually pretty obvious. Some would say boring.

Your strategy pulls in both identity and market.

  • On the identity side of things, you want to focus on strengths, and away from weaknesses. You want to take advantage of your core competencies.
  • On the market side of things, you want to focus on a well-defined target market so you can tailor your message and your business offering. You don't want to be just a restaurant; you want to be a restaurant with a focus that fits a target market, with price, food, and ambience to match. You don't want to be just a market research and planning consultant; you want to be a market research and planning consultant with a focus on personal computer markets in Latin America.

As I've said elsewhere, your focus is intimately related to your identity and your market. You cannot pull these enmeshed concepts apart.

Understand Displacement


Displacement: In the real world of small business, everything you do is something else you can't do.

Understanding displacement is vital for business planning, vital for growing a business, vital for small- and medium-business in particular. Consider the picture here, marbles dropping into a full glass of water. The water comes splashing out of the glass and onto the table. That's a good illustration of displacement and how it works in business.

I've seen it so many times: trying to plan their business, people start making lists of things that ought to be done and end up with huge unrealistic and impossible business plans because they haven't come to terms with displacement.

Learn to live with the reality of displacement and you'll do better planning your business, and, particularly, growing your business.

Adapted with permission from All rights reserved.

General Principles of Real-World Strategy

In 30 years of working with businesses of all sizes, I've come across several of what I would call general principles of strategy. These don't necessarily apply in the academic world, or for larger corporate enterprises, but they do apply to small and medium businesses everywhere:

  • Strategy is focus. The more priorities in a plan, the less chance of successful implementation.
  • Strategy needs to be consistently applied over a long term to work. Better to have a mediocre long-term strategy consistently applied for years than a series of brilliant but contradictory strategies that never last long enough to matter.
  • Strategy needs to be tailored. There are no standard strategies. Every company is different. A given strategy must always be tailored for a specific company.
  • Strategy needs to be realistic. You have to deal with your company as it is at this point in time, understanding what choices you really have, what knobs you can actually turn.
  • The best strategies are market driven. When possible, it's not "how to sell what we have," but rather, "how to make what people want or need what we offer."
  • Good strategies understand displacement. Displacement in business refers to the undeniable fact that everything you try to do rules out many other things that you therefore can't do. You have to choose carefully, because one project displaces many others.

from Hurdle: the Book on Business Planning

What Knobs Can You Turn?

A good way to keep your planning realistic is to know what knobs you have to turn.

For example, say you're working a tractor trying to dig out a boulder in the middle of your yard or field. What knobs (for controls) do you have to turn?

  • You have controls to move the tractor forward, move it backward, and turn it.
  • You have controls to go faster, or slower.
  • You have controls to deal with the tractor equipment, like the blade and the digger.

And those knobs are your universe of solutions. So you deal with your problem given the controls you have. It doesn't do you any good to think about what you'd like to do if you don't have a control that can do that.

This is an important concept to keep in mind in business. You might want a lot of things for your business, but if you don't have the resources to get there, if you don't have the right people, or the know-how, or the working capital, then you have to plan on getting the resources first.

Strategy has to be realistic. Know what knobs you have to turn. Keep it real.

Strategy is Tailored to Your Size

Forget finding a strategy for a certain type of business or following somebody else's strategy. It won't work. Strategy has to be unique, tailored to your business. You have your own identity, including strengths, weaknesses, goals, core competencies. You have to develop your strategy, for your company.

This should be obvious, but some people still try to find the strategy for a restaurant, or a management consultant, or whatever.

Remember: Your Plan Is Not Necessarily a Written Document

I want you to use words and numbers written down somewhere to keep track of your plan, but that doesn't mean it isn't there unless you have it written into a text. It is there if you know it and if your team knows it.

Don't get freaked out by the text, or the writing. It's just for you, and probably your team members, to track your progress. Just type snippets. Stream of consciousness is fine. Pictures, photos, or charts are fine, too. Some of my favorite plans use illustrations or pictures to represent the key concepts for the heart of the plan; they can be as simple as a single slide.

Sometimes it's as simple as a mantra. Fine dining in Eugene, Oregon. Fresh organic Korean food in lower Manhattan. Your weekend cottage in Cape Cod. Healthy fast foods.

You might be writing bullet points. Whether short text or picture or completely written out discussions, you want to keep track of your plan so you can track or your plan so you can review and revise it and, of course, communicate between different people. But until you need to present it as a document to be read by others, don't make extra work. Keep it simple.

I do recommend keeping it on a computer, making it accessible to the few key team members who must be able to refer to it, but do only what you need.

Don't ever get caught worrying about the actual writing. Just type snippets. Steam of consciousness is fine. Pictures or photos or charts are fine.

Growth vs. Focus

It is paradoxical. If you stay focused on the key elements of your business, you aren't looking at new opportunities. That's one of the reasons that strategy is done by humans, and not by recipes or algorithms. It takes a human to deal with the paradox and complexity.

Business strategy often involves tough decisions. Do you focus on what you know well, and consolidate, build on your core competencies? What if the market changes or technology changes and leaves you behind? But if you constantly move into new areas, constantly pursue new opportunities, you run into the problems of displacement and long-term consistency.

Deal with it. That's why you are in charge. You make the tough decisions.