To visualize the strength of fit between activities, place the activities on a map.<\/p>\n\n\n\n
- Start by placing the key components of the value proposition<\/a>.<\/li>
- Make a list of the activities most responsible for competitive advantage<\/a><\/li>
- Add each activity to the map. Draw lines wherever there is fit: when the activity contributes to value proposition, or when two activities affect each other<\/li><\/ul>\n\n\n\n
Here\u2019s an example for IKEA:
<\/p>\n\n\n\n<\/figure>\n\n\n\n
A densely interconnected activity map is a good sign. A sparsely connected map shows weak strategy.<\/p>\n\n\n\n
The activity map isn\u2019t useful just for description of your current strategy. It can also be used for ideation for new strategies:<\/strong><\/p>\n\n\n\n
- Can you improve fit between activities? <\/li>
- Can you find ways for an activity to substitute for another?<\/li>
- Can you find new activities or enhancements to what you already do?<\/li>
- Are there new products or features you can offer because of your activity map, that rivals will find difficult to emulate?<\/li><\/ul>\n\n\n\n
Maintaining Strategy<\/strong><\/h3>\n\n\n\n
Continuity doesn\u2019t mean an organization should stand still. <\/strong>As long as there is stability in the core value proposition, there should be innovation in how it\u2019s delivered.<\/p>\n\n\n\n
First, companies must stay on the frontier of operational effectiveness. You must assimilate best practices that do not conflict with your strategy <\/strong>or cause negative trade-offs.<\/p>\n\n\n\n
- BMW embraced OE improvements to decrease design time, but stopped short of steps that would remove its unique design language.<\/li><\/ul>\n\n\n\n
Second, you must change whenever there are ways to extend your value proposition or better ways to deliver it<\/strong>.<\/p>\n\n\n\n
- Reuter started with spreading market information through pigeons, then moving onto telegraph and the Internet.<\/li>
- Netflix began with direct to customer movie DVDs, then switched to Internet streaming as soon as it became feasible.<\/li><\/ul>\n\n\n\n
Adapting Strategy to Changes<\/strong><\/h3>\n\n\n\n
Unlike what some argue, a rapidly changing environment is not an excuse to avoid strategy<\/strong>. Their flawed thinking goes: \u201cStrategy requires a prediction of the future<\/a>. I can\u2019t predict the future. Therefore, I can\u2019t commit to a strategy.\u201d They try to stay flexible by avoiding commitment.<\/p>\n\n\n\n
But flexibility never allows the company to stand for anything or become great<\/a> at anything<\/strong>. The mass of competitors will yield more focused rivals with clear value propositions who will attract customers<\/a> instead.<\/p>\n\n\n\n
Says former Ford CEO Alan Mulally: \u201cStrategy is about a point of view about the future and then making decisions based on that. The worst thing you can do is not have a point of view, and not make decisions.\u201d<\/p>\n\n\n\n
Great strategies are rarely built on a concrete prediction of the future. They\u2019re just based on a broad sense of which customers and needs are going to be robust 5-10 years from now.<\/strong> Strategy is implicitly a bet that these needs, and the accompanying trade-offs, will be enduring.<\/p>\n\n\n\n
- Southwest bet that people would continue to want low-cost convenient transportation.<\/li>
- In-N-Out bet that people would continue to want simple fresh burgers and fries.<\/li><\/ul>\n\n\n\n
A strategy is a guiding force that shows you how to adapt to the new world. You know who you\u2019re trying to serve, what needs you\u2019re trying to meet, and your price – this filters what matters and makes priorities clearer.<\/p>\n\n\n\n
- BMW embraced OE improvements to decrease design time, but stopped short of steps that would remove its unique design language.<\/li><\/ul>\n\n\n\n
- Make a list of the activities most responsible for competitive advantage<\/a><\/li>