In 1805, Britain risked being invaded by Napoleon’s forces. The Battle of Trafalgar would become a decisive battle thanks to one strategic decision.
As they prepared for battle, the British — led by Admiral Nelson — had a fleet of 27 ships, while the combined French and Spanish fleet featured 33 ships. The conventional naval strategy at that time was to keep the opposing fleets in formation so as to fire broadside at each other. Nelson knew that he was outnumbered and adopting this approach would likely lead to defeat.
So, Nelson developed a strategic plan. His British fleet would break into two columns and sail perpendicularly at the Franco-Spanish fleet. The decision paid off. The French and Spanish lost two thirds of their ships; the British lost none. This victory ended the threat of Britain being invaded by Napoleon.
As a leader, are you thoughtfully surveying your company and competitive landscape to ensure your strategy will lead you to victory?
1. What is strategy?
Unfortunately, “strategy” is one of the most misunderstood, poorly defined and misapplied words in business today. Examples of bad strategy include fluffy feel-good statements, visionary goals without supporting plans, and plans that attempt to do too much and fail to focus on a few key strategic initiatives.
So, what is “strategy”? As we work with companies to create and execute their strategic plan, we use the following definition of strategy:
Strategy diagnoses a company’s strengths and weaknesses, clarifies the mission, vision, values and plan, aligns people, value and profit propositions to more effectively reach the company’s ideal client; and coordinates actions to continually improve a competitive advantage.
2. What is in a strategic plan?
A great definition of strategy does not a strategic plan make. Going through the strategic plan development process will ensure a game-changing approach is created.
Let’s consider these four vital elements of the planning process: diagnosis, clarification, alignment and coordination.
Admiral Nelson sized up his relative strengths (more experienced commanders) and weaknesses (fewer ships) and crafted a strategy based on his fleet’s relative strengths and weaknesses.
Too often leaders today perpetuate bad strategy in their companies by failing to properly assess their internal and external environments. To create a winning plan for your business, you must ensure your strategy diagnoses:
– The past
– The team
– The current operations
– The external environment
– The product and service offering
By diagnosing each of these items, you’ll be able to understand your company’s relative strengths and weaknesses. You will know what you need to optimize within your organization. And you will know the key trends currently impacting your industry.
Admiral Nelson conceived a brilliant strategy, but to fight a battle radically different from the conventional wisdom of the day took a clarified strategy being clearly communicated. Admiral Nelson got the plan out of his head and into the minds of his captains in such a way that they executed the strategy.
Too often owners make the mistake of having an idea in their head but not clarifying it with their team. Therefore, business leaders must ensure their strategy clarifies:
– The mission
– The vision
– The core values
– The strategic plan
Many great ideas are clarified over time. Lin-Manuel Miranda picked up a biography of Alexander Hamilton while on vacation, and while reading the opening pages wondered if his life was ever made into a musical. Several months later he rapped about the founding father at the White House Poetry Jam in front of President Obama. Yet it took some half-dozen years from that point for Miranda to create the now wildly successful Broadway hit, “Hamilton.”
In many ways, company owners need to go through a similar process (maybe minus the rapping). Clarify how you envision your company, then write a ‘script’ for your employees to base their performance off. View your annual strategic planning process as the opportunity to clarify the next version of your script. Plays have different acts and different lines for different performers. Likewise, a clarified strategic plan will allow your team to see the overall big picture and their particular part in the larger performance. And iterating your company’s ‘play’ at least annually by updating your strategic plan ensures your script is always up to date.
Admiral Nelson orchestrated the fixed resources of his inferior fleet to obtain the maximum performance out of his ships. After all, his smaller navy defeated a larger navy. Nelson better aligned his resources compared with the commander of the French and Spanish fleet. Likewise, company owners and leaders need to align their resources in a coordinated fashion. Owners must align three essential propositions to effectively reach their ideal customer.
– People proposition – the positive motivations and incentives you put in place for your employees as they support and implement your overall strategy
– Value proposition – the benefit your clients receive from purchasing your product/service, minus what they pay for it
– Profit proposition – the revenues generated by your company minus the cost of production and delivery
A company’s people, value and profit propositions need to be built and aligned around reaching its ideal client. Companies need to be clear about that customer’s characteristics, particularly what they want, value and need from your company. Many companies have never thoughtfully considered how to align these key resources. For those that have, you need to periodically re-align your key resources to ensure your performance engine is optimized.
Strategy must move from theory to practice. Admiral Nelson not only conceived a winning strategy, but he also led his fleet to perform the right way to gain a competitive advantage. The greatest barrier to implementing strategy today is the 80% of the time your employees spends in the ‘whirlwind’ of their day jobs – the day-to-day responsibilities that consumes most of their time, focus and energy.
3. Does my company really need a strategic plan?
Yes – every company needs a strategic plan. Period. If you haven’t articulated and outlined a strategic plan, then you only have a dream or hope for your company. That’s a start, but it won’t get you where you want to go. Furthermore, strategy that remains in the owner’s head and is not communicated to everyone on the team, so as it can be acted upon, will not lead to success.
Admiral Nelson prevailed in the face of overwhelming odds due to his keen development and execution of a great strategy. Can the same be said of how you lead your company?
About The Author
Tom Barrett helps entrepreneurial leaders focus & grow their business by implementing the Entrepreneurial Operating System (EOS), facilitating StratOp strategic planning workshops and coaching teams to operationalize their plans. He is the co-founder of Navigate the Journey, a consulting firm that helps entrepreneurial leaders break through the barriers that are holding them back at the company, team and individual leader levels. For more information and to schedule a call visit NavigateTheJourney.com