Tag Archives: strategy

What distinguishes leaders from laggards?

What distinguishes leaders from laggards and greatness from mediocrity is the ability to uniquely imagine what could be. ~Robert Fritz

“The Spirit of Progress”

When I first moved to my condo in Chicago I had a bird’s eye view of The Montgomery. This is a condo building that was once home to the retail giant Montgomery Ward. I remember watching the transition; at one point it was stripped to the concrete pillars and I could see all the way through the building. This image resurfaces whenever I hear someone say their organization could have X number of clients, customers, or sales without even trying (i.e. laggards). It could be that Montgomery Ward believed that to be true as well.

What still remains atop the former Montgomery Ward Administration Building across the street is the statue, somewhat ironically entitled, “The Spirit of Progress.”

Another building, just north of the Administration Building is the former two million square foot Mail Order House (a single floor covers six acres). The interior contained miles of chutes, conveyors, and storage lofts. At one time the building had its own post office branch and a ground-floor shipping platform that could accommodate 24 railroad freight cars. Today, this is where you’ll find Groupon HQ, and yes, many more condos.

In my last post, I quoted Sue Barrett’s definition of strategic: Being strategic means ensuring the organization’s core competence is consistently focusing on those directional choices that will best move the organization toward its new future. Something that Montgomery Ward did not do.

In 1962 Everett Rogers, a professor of communication studies, published a theory in his book Diffusion of Innovations. His theory outlines a process by which an innovation is adopted over time. It’s the shape of a bell curve beginning with the innovators (2.5%), then on to the early adopters (13.5%), early majority (34%), late majority (34%), and finally closing out the bell curve with the laggards (16%). [Rogers’ book is in its fifth edition and continues to be frequently referenced.]

I think it’s easy for organizations to become comfortable with making directional choices based upon their laggards—the people (customers, clients, etc.) who will always be there. It feels “safe” in the short term, but could be very risky in the long term. There’s a reason they are laggards; they don’t like change. Consequently, it’s likely that the laggards are the most vocal when you make directional choices that don’t mirror the past.

Directional choices (i.e., strategy) should be moving the organization toward its new future. That means leaders’ strategic choices need to focus on the initial part of the bell curve – the innovators, early adopters, early majority.

When I read about the history of Montgomery Ward and compare and contrast that with what Amazon is looking for in its HQ2, it’s unfortunate that Montgomery Ward made choices to serve their laggards. In many ways their basic mission and even infrastructure isn’t that different from Amazon. The difference is that Amazon is constantly making directional choices to move the organization toward its new future – they have a dynamic strategy.

Strategic leaders don’t build their strategy based on their laggards. They make directional choices to always be moving the organization toward its new future.

Are you strategic, or just efficient?

Strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value. ~Michael Porter

I have found that while the idea of strategy sounds intriguing to many, turning strategy into reality is far more challenging. It becomes easy to start listing what you currently do, and then assume that’s your “strategy.” You might also identify how efficiently you manage your operations and assume that’s your “strategy.”

Michael Porter is the quintessential expert on strategy. The words that Porter emphasizes when he defines strategy are different and unique.

Porter says “the root of the problem is to distinguish between operational effectiveness and strategy.”  Things like productivity, quality, speed, customer satisfaction, benchmarks, outcomes, and best practices have created entire industries of tools and techniques, all very helpful for a well-run organization. However, that isn’t strategy.

You might be asking, if operational effectiveness means a well-run organization, then why is strategy even necessary? Here’s where I think leaders in the for-profit sector could learn from the leaders in the nonprofit sector. Nonprofit experts Steve Zimmerman and Jeanne Bell said, “sustainability lies at the intersection of exceptional impact and financial viability.” I would argue that all organizations (nonprofit and for-profit) will discover that intersection through strategy not through efficient operations.

The basic premise of strategy that Porter outlines, I believe, could apply to organizations of any type or size, and even to individuals. Looking for a new job? Consider how you might describe yourself differently in a job interview if you were being strategic.

Here are Porter’s three key principles that underlie strategy.

  1. Create a unique and valuable position.
    • Serving few needs of many
    • Serving broad needs of few
    • Serving broad needs of many in a narrow market
  2. Choose what not to do.
    • Some activities are incompatible. Gains in one area can be achieved only at the expense of another area.
  3. Create “fit” among the organization’s activities.
    • Fit drives sustainability: when activities mutually reinforce each other, competitors can’t easily imitate them.

3 Questions to Test Your Strategy

  • What unique value do you offer/provide?
  • Is it clear what you are choosing not to do?
  • Do the activities (products, programs, services, delivery systems, staffing, etc.) fit together and reinforce each other?