Strategic Clarity

One of the early topics covered in my business strategy course at Columbia Business School is the importance of strategic clarity.  Simply stated, the principle is that a prerequisite for sustained success is the ability of a company to clearly state its business strategy in terms of three defining building blocks:

• The target customers it is intending to serve -- who are you selling to?
• The products and services it will provide to serve the needs of these customers -- what is your value proposition?
• The basis of competitive advantage that will it allow it to most cost-effectively provide value to the target market -- how will you deliver more value than our competitors?

A final element of a well-conceived business strategy should also include the financial objectives your company hopes to achieve by executing its strategy.

It sounds simple doesn't it?  Most of my MBA students think so.... until we put the principle to a test. An excellent Harvard Business Review article on this topic entitled Can You Say What Your Strategy Is challenges companies to articulate their strategy in terms of the elements above in 35 words or less.  

Why reduce strategic intent to a tweet?  Because it stress tests whether your company truly does have strategic clarity that can be easily understood (and hopefully embraced) by your shareholders, employees and customers.
In our class, students are asked to articulate the business strategy of the Coors beer company in the 1970's and contrast it to the company's apparent strategy today.  What emerges is that:

• It's not nearly as easy as it seems to crystallize a company's strategy
• Companies need to adapt their strategy over time; what worked in the 1970s will not likely work today.

​For what it's worth, here's the school solution on Coors' mid-1970s strategy in 35 words (minus the financial objective, which wasn't disclosed in the case study reading):











​While obviously, even the most well conceived statement of business strategy still needs to be effectively executed, strategic clarity is a prerequisite to success.  To demonstrate the relevance of strategic clarity, try this at home: think of the the three best and least well managed companies that first come to your mind.  Now ask yourself, which group of companies appears to have a clearer, more "tweetable" business strategy?
How about your company?  Can you tweet the essence of your business strategy that makes a compelling case for how and why you will win in the marketplace?

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