Good small business strategy begins with hard choices

Is your business “playing to win” or “just playing to play”?

This question comes from the best-selling business author Roger Martin. Martin is the former dean of the Rotman School of Management at the University of Toronto and one of the top business thinkers in the world.

He is one of my favorite business authors and someone whose work I have highlighted in previous columns. I had the good fortune to hear Martin speak at a recent conference I attended.

Martin’s message was focused on what does effective business strategy look like? How are you playing to win?

He says good strategy starts with making the very difficult choices about what your business chooses to do and what it chooses not to do. These choices need to focus on how best to differentiate your business in a competitive marketplace.

Entrepreneurs often kick the can down the road on making these types of hard decisions because they fear that their strategic choices may be incorrect. Or the choices may negatively impact the bottom line, especially in the short run.

Your business cannot be all things to all people. If you don’t make choices on what markets you will serve, you won’t have an effective strategy. As Martin emphasized during his talk, “being the same as others or ‘just playing to play’ is a recipe for mediocrity.”

He believes it’s important to remember some business basics. Enterprises compete in one of two ways ­— either by being the cost leader, or by differentiating your product or service. Since a small business typically isn’t a cost leader in their industry, you are left with one choice.

Martin has an interesting test for whether your strategy statements are really a strategy or a choice. Flip your strategy statement so it means the opposite and if the revised statement then sounds ridiculous, then you don’t have a strategy.

An example of his test he shared, many companies have “providing outstanding customer service” as a strategic emphasis. The opposite would be of “providing terrible customer service.” Clearly, no company wants to intentionally provide bad service, so he concludes that great customer service isn’t a strategy because it doesn’t differentiate your company from others.

Martin also noted that if you flip the common company initiative “to hire and develop exemplary employees” to “to hire and develop mediocre employees” that would fall into the same category of not being a real choice.

He isn’t arguing that providing great service and hiring excellent employees aren’t critical components for every successful enterprise. He is simply stating that they’re not really a strategic choice where you can successfully differentiate your company.

On the other hand, if your company chose to reposition your service or product and only serve an upscale or premium market; that is a strategic choice.

The opposite, not to serve this market, is also a choice.

So, how does your strategy look through Martin’s perspective?

How would you answer his question: are you playing to win or just playing to play?

Pat Sisneros is the Vice President of College Services at Everett Community College and a former small business owner. Please send your comments to psisneros@everettcc.edu

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