In the January issue of HBR, Roger Martin sets out some rules for avoiding common mistakes in strategy making. As he writes in “The Big Lie of Strategic Planning”, the first rule is “keep the strategy statement simple.” Rather than a long, often vague document, the company’s strategy should summarize the chosen target customers and the value proposition in one page.
I couldn’t agree more. In my consulting work, I take this idea even further by asking my clients to summarize their strategy in less than 15 words. This statement must identify the target customer, the value proposition, and how the latter fits two requirements:
- Focus: What you want to offer to the target customer and what you don’t;
- Difference: Why your value proposition is divergent from competitive alternatives.
Sounds simple. But it’s more difficult than it seems. The 15-word constraint is a test that often reveals a profound lack of alignment among managers. In a 100-page strategy document you can state everything you want, which makes everyone in the organization feel comfortable. The trouble is that managers then interpret the 100 pages according to their view and aspiration of the company’s strategy. The result: one planning document, many different strategies.
All great business strategies can be summarized in a short headline. Easy to understand and communicate, they convey clarity internally and externally to the customer. Clarity is so important for good strategies that companies should make an effort to understand what it means and how to achieve it.
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