I often ask prospective clients, “what tools and processes do you use for strategy development?”.
Their verbal and non-verbal response to that question is a good indicator if they are a qualified prospect for my consulting services. A good response acknowledges the need for tools and processes in an overall strategy framework that might include one or more of Vision, Mission, Values, SWOT, Key Differentiators, Key Performance Indicators, Operating Model, and more.
Do You Play Chess Blind-Folded?
Next, I ask “Do you play chess”? The answer doesn’t matter since everyone generally understands what chess is all about. I then ask, “Do you play chess blind-folded”?
That’s a ridiculous thought. If you played chess blind-folded, you couldn’t see each move of your opponent, interpret their strategy, and react either offensively or defensively. EXACTLY!
A Case for “Events”
“Events” are the chessboard moves in your market. So without a tool or process to evaluate events and interpret the strategies of others, you’re company is playing in your market blind-folded.
Yet events are rarely part of any company’s strategic framework. But they should be, because events are the unit of change in your market. How can you possibly not measure and evaluate events?
Events can be easily measured. Events are discrete and well defined. Events are both retrospective and speculative. There are material and immaterial events. Events have either favorable or unfavorable impact on your business. Events are known, and good competitive intelligence programs can make them known to you earlier. Events can be codified with few or many attributes. Events can conceptualize market share, competitors, wins, losses, partnerships, alliances, joint ventures, regulatory affairs, mergers, and acquisitions.
Event Management in Your Strategic Framework
Just as you evaluate your opponents moves in chess, evaluation of events in your market should answer questions such as “Is my offense going to work”? “Do I need to change strategy”? “Do I need to temporarily interrupt my offense and react defensively”? “Is my overall position strengthen or eroding over time”?
Jot down a list of some big events (both favorable and unfavorable) that have occurred recently in your market. Such a list might look like the following actual and fictional events….
- Borders To Liquidate
- RIM Losing Market Share to Apple and Droid Devices
- Mobile Devices Make Micro Payment Markets Affordable
- Tsunami Hits Japan
- USA Economic Uncertainty Over Debt Ceiling
- Your Key Partner was Just Acquired by a Competitor
- Your Key Competitor Just Acquired a Company Outside Your Traditional Market
- A New Startup in Your Market Gets Traction with a Freemium Business Model
To avoid operating blind-folded, you need a simple (but not simplistic) “Strategic Lens” to evaluate events. For our clients, that lens is based on the results of mathematical (game-theory) models. But any company, large or small, can get started with measuring events in a strategic framework. It is easiest to get started by using your key differentiators as your “Strategic Lens”. Just systematically ask yourself the question, “for each event on your list, is the impact on each of your top three key differentiators favorable or unfavorable? High, medium, or low?
Once you do that for about two quarters worth of events, you’ll start to sense trends. It’s a great and easy addition to your strategic framework, and involves a small amount of executive time commitment. Evaluating events will create a rich dialogue amongst your leadership team. And instead of operating blind-folded, your strategic framework is now answering the strategic question, “Are my key differentiators strengthening or eroding over time”?