By Robert W. Bradford, President & CEO
In a word, no. There is no perfect strategy, and even the best strategy can become obsolete given time. Strategy is about finding what works, and in a world of imperfect information, that can mean experimentation.
This fact makes good strategy a daunting prospect to some entrepreneurs and managers. Many of us have succeeded in our lives by seeking perfection – perfect scores on tests, perfect assessments and even “perfect” strategies.
In the world of strategic planning, these are traps. Sure, you can perform well, and sometimes even “perfectly”. But for every customer that thinks you are perfect, there are going to be some who consider you awful. If this isn’t true – if you don’t have some customers who have a clear reason to dislike your product or service – you aren’t pushing hard enough, and you are very likely leaving money on the table.
How can I say this? It’s a simple rule of design: anything that performs perfectly for a given set of criteria must perform worse in another set of criteria. In the real world, these trade-offs – price vs. speed, quality vs. convenience, technology vs. ease of use, for example – are ubiquitous. Successful companies work partly because they find an appropriate balance of attributes that make them the preferred choice for a group of target customers. Unsuccessful companies often attempt to be the best at every attribute. This is a losing proposition, as competitors can beat you at one or two attributes, making them the preferred supplier for some customers. The focused approach – optimizing your product or service for one or two attributes – frees up resources which can be used to further surpass you while you vainly seek perfection.
Most real-world customers, fortunately, do not analyze forty-seven different attributes of all competing products and service. Most people, conveniently, only look at their top two or three criteria, and choose a supplier based upon those. This means that a focused approach – if you choose the right criteria – will give you a significant advantage with that specific customer, and those who share his or her preferences.
How can we strategize better knowing this approach? There are three things I hope you’ll do differently:
- Abandon the idea of perfection. There is no such thing as a perfect product or service, and no, you won’t be the first company in history to achieve this milestone. If you have products or services that are close to perfection, ask how you can improve them for the benefit of some customers by backing away from perfection in some of the attributes.
- Clearly identify a distinct, identifiable customer type by segmenting your market around purchasing behaviors. Avoid the trap of looking at market share in the entire market, and instead seek share with a specific type of customer that will reward your excellence. Learn what their top two or three decision making criteria are in your market
- Take a close look at the cost of each attribute you build into your product or service. Not every attribute carries equal weight, and some have a poor relationship between cost and benefit. Consider the market benefit of cutting back on the least important attributes and building up your performance in those your target customers find most critical.
Does your company suffer from perfectionism? Let us know how you are dealing with it – or, better yet, attend our amazing, data-driven workshop on Simplified Strategic Planning to learn how to wrestle perfectionism to the ground. Our highly acclaimed Simplified Strategic Planning approach has helped many hundreds of organizations improve their strategies and bottom line results with effective, actionable strategies. Please listen to our webinar: Why my strategic planning isn’t working.