Most strategic plans don’t yield great results. There are a myriad of reasons but one is that they just aren’t very strategic. They tend to be more operational. Often, inspiration is taken from what competitors are doing. If they are offering a new product or service, other companies feel they must too. I call this “me-too” strategy and it isn’t just bad strategy, it is potentially harmful to your business. It requires your organization to add to its offer, thus adding cost. Yet it levels the playing field for the customer and they can’t distinguish the business based on value so they resort to taking the best deal, which depresses margin. Hmmmm. A strategy that adds cost and reduces margin–doesn’t sound like a good idea to me.
So where should organizations get inspiration? From the market place. Not necessarily customers. While they can describe what they don’t like, they usually can’t invent solutions themselves. The winning solutions come from combining knowledge of what they don’t like with knowledge of general market trends in technology and/or best practices combined with the organizations’ strengths. Being able to offer something not present in the market in the same way, sets company’s apart and gives customers trade-offs to evaluate -not just price. And if the difference is meaningful and relevant to a target of the organization, it earns the business new growth.
Let’s take an example.
Instead of trying to make a “better” golf club using the existing formula in the US Golf Industry and increase share, Callaway Golf decided to find out why non-golfers didn’t play the game, especially if they had membership to facilities that offered golf. The most universal reason for sports enthusiasts with access to not plan golf was fear of hitting the tiny white ball. (which I completely understand). For many potential golfers, the stress of hitting or missing the ball zapped all of the fun out of it. Their answer to this “pain point” was the Big Bertha, a club with a larger head and striking surface. Essentially, this reinvented the game for most casual players–existing and new alike. By finding out what wasn’t working and trying to fix it, they developed a breakthrough that boosted their business and eventually the entire game. (Story excerpted from Blue Ocean Strategy, written by WC Chan and R Mauborgne and published by Harvard Business School Press.)
Callaway was NOT a “me-too” company. They set out to make a better solution based on perceived needs of an entire prospective segment of golfers. Which company will come up with the next breakthrough in your industry? It could be YOURS!