New Business Playbook: Strategizing

businessman hand draws gear to success concept

The initial leap to embark on a new opportunity may have been difficult. New things, in business and in life, are often challenging. Perhaps you were almost overcome with misgivings, and only ventured ahead due to some inexplicable compulsion. Perhaps you felt a fledgling excitement, an almost childlike giddiness. The truth is that starting something new in business, whether a new role or an entirely new organization, will probably be accompanied by both sets of feelings in some measure. But once you have envisioned this new step in your life, you need to figure out how to turn that vision into a reality. This is strategizing.

Merriam-Webster defines “strategy” as “a careful plan or method for achieving a particular goal usually over a long period of time.” So strategizing in business is the act of creating the long-term plan that will allow you to achieve what you want in the opportunity you have envisioned.

The world in which the Old Business Playbook (OBP) was developed was one where data was a rare and valuable commodity. An entrepreneur or executive operating in this rational arena could use better access to data and superior analytical tools to envision the next big opportunity. Then, using the same analytical methods that identified the potential gold mine, they could again consult the data to determine the most sensible way to exploit the opportunity. What are the most valuable customer segments? What preferences have they expressed? Which distribution channels will reach them? Which partners have access to them? The OBP was clear: you should select the most logical strategy given the available data.

But, as we have already argued, the world described by the OBP is gone. We previously discussed how the vast increase in connectivity and the commoditization of information has upended business. Just as envisioning new paths can no longer rely on having better data and analytical tools than your competitors, strategizing based on purely rational models is no longer a competitive differentiator.

It’s worth noting again that it’s not rationality that has failed in business – rational thinking is required in business as it is in science, philosophy, politics and other areas of human endeavor. But what is now being exposed as a failure is the overly simplistic take on rationality that treated analysis as the primary and infallible engine of strategy creation. Meanwhile, the person creating the strategy was little more than an automaton deterministically and inexorably following the data to the logical course of action it demanded. And the people who would help the strategy-maker execute the strategy became simple cogs in a machine – indescribably complex beings reduced to a one-line job role.

But the strategies that win today are not those an automaton can spit out from the sum of the available data – connectivity has ensured that the inputs and algorithms of the “rational strategy automaton” are commodities that cannot produce differentiated value. And equally, the strategies that win are not those that describe workers as simple cogs. Under the OBP, most workers were there to move things around and pull levers. As technology progressed, those figurative cogs became literal cogs, and now a combination of circuits and hydraulics, available cheaply to everyone. While there continues to be a period where you can arbitrage price inequities in global labor markets to get a last gasp return on workers-as-cogs thinking, in the long run there will be no differentiated value from such strategies.

If thinking of people as undifferentiated cogs leads to undifferentiated strategies, then it isn’t difficult to imagine the opposite: strategies that rely on the differentiated strengths of people lead to differentiated strategies. That is what the New Business Playbook (NBP) essentially says about strategizing. It means that leaders should pick sensible strategies that flow from their own strengths and that utilize the individual strengths of workers. It isn’t some independent rational strategy that is driving people. It is people – starting with the leader – that drive the strategy. What you can do better than others is what will create competitive advantage.

Without context, it might seem obvious that one’s strengths should feature prominently in the strategizing process. And yet, in study after study, we see strengths marginalized over a focus on weaknesses. Gallup asked, “What do you think will help you improve the most? Knowing your strengths or knowing your weaknesses?” They determined that only 41% of American workers think focusing on strengths is more important than weaknesses, despite the extensive research revealing that strengths-based approaches increase productivity, satisfaction, and profits. Other countries lag behind even the United States’ poor showing.


Source: Gallup Poll

And even when businesses do talk about people’s strengths, it’s a patchwork assessment of which strengths in which people can be leveraged to achieve some independently formulated rational OBP strategy. What the NBP demands is that the strategy itself derive from the leader’s strengths and align with the strengths of others in the organization. What people are like and what they are good at should drive the strategy; the strategy shouldn’t drive what you expect people to do. It’s a concept that seems intuitive but is rarely practiced. This powerful idea – that people have unique strengths that can be deliberately tapped into to unleash competitive advantage – is what we summarize through the principle “Design For People.” It is a refrain that we will be frequently returning to when we describe the New Business Playbook.

Steve Jobs was a counter-culture visionary who had an ability to visualize beautiful products that nobody yet demanded and be the storyteller who created markets that didn’t yet exist. These strengths uniquely powered his strategy of creating beautiful designs that would surprise and lead the customer to new relationships with technology, ultimately enabling his vision of making “a dent in the universe” through “a bicycle for the mind.” On the other hand, Bill Gates was a master opportunist and hyper-agile coder who had an ability to find the product features, partnerships and distribution that could quickly exploit emerging opportunities to get his product to the most people possible. His strengths allowed him to follow his strategy of opportunistically doing what it took to aggressively increase market share, ultimately enabling his vision of “a computer on every desk and in every home.” Jobs would have courted disaster if he had followed the Microsoft strategy, and Gates would have been left in the dust if he had tried Apple’s.

A world away from computers is the household cleaning industry, but the same principle for strategizing applies. James Dyson created a company whose strategy was to create products (like his namesake vacuum cleaner) that were individually engineered to be superior than the competition. Dyson was an inventor and tinkerer whose first product was a better engineered wheelbarrow, and his winning strategy capitalized on his inward-looking product creation strengths. By contrast, A.G. Laffley, the current CEO of Procter & Gamble, revived tired brands (e.g. Tide) and introduced some new ones (e.g. Swiffer, Febreze) through a strategy that focused not just on the individual products but on a global brand of being a consumer-centric company that improves and simplifies lives. Laffley was a supreme salesman who had an ability to create the image and story that could get people excited about what P&G represented as a company and by extension in its products, and his strategy took advantage of these external-facing salesmanship strengths. Both Dyson and Laffley created winning strategies aligned to what they did best.

There’s no getting around it: developing a strategy that creates sustainable competitive advantage is hard. The OBP’s rational thinking, by itself, no longer creates differentiated advantage. But as the examples above demonstrate, there is more than one way to skin a cat. Choosing the way that allows you to best use your strengths will maximize your ability to create real competitive advantage. A strategy that isn‘t aligned with the leader’s strengths cannot win in today’s marketplace.

From your strengths, your strategy will issue. Let’s check back in with the entrepreneur and business executive we introduced back in our first article, side by side with the counterexamples running a new playbook we introduced in our last article.

Old Business Playbook New Business Playbook
ENTREPRENEURYou are starting a business You found a gap in the market: “Handles”, sandal-type shoes for people who enjoy performing handstands. How are you going to get rich selling Handles? You dive into the data about people who enjoy doing handstands and find that there are handstand clubs. Your strategy: create market demand by delivering free samples to the leaders of these clubs. You want to learn before you create a full blown strategy. What are you missing? You have always been a natural sales person, and you have credibility with the veterans community. You find out the next gathering of veterans that is close by and you offer to take them to lunch. You sell your vision of a new type of wheelchair that will be infinitely customizable, beautiful, and yet strong. You ask for pre-orders to show commitment.
BUSINESS EXECUTIVEYou are a seasoned business manager who is assigned a head of HR job as part of your job rotation The line managers want more and better hires. You review the most recent analytics and see that the highest yield candidates are usually associated with Employee Referrals. You decide to expand that program. You love your company but it is struggling. You know that one of the biggest problems facing it is the ability to find more great people. You have always had a talent for figuring out the essential element of a product or service and communicating it to people in a simple yet compelling way. You envision a great talent branding campaign, one that will effectively showcase your love of the company and help the right people self-select to join.

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