Strategy can be said to be the art of making the most intelligent choices. A strategic choice helps a company use its limited resources to win the competition of value creation. Making the strategic choice and sticking to it is difficult. It takes courage to choose one course of action over another and to stick to the decision when the pressure of daily business tempts to blur the focus.
Focus does not necessarily mean being the biggest and the most profitable company in the world or even in the industry. Focus means knowing in which direction we want the company to go and knowing what to do and what to stop doing to get there. A senior executive can more or less command the organisation to do anything, but not make them do everything. To focus means to think through and answer a set of questions to determine where and how to best use the company’s scarce resources:
• In which businesses will we compete?
• Which geographies will we target?
• What customer segments will we pursue?
• What products and services will we offer?
• How will we deliver our products and services?
• How will we create greater value for our customers?
• How will we generate superior profits?
• How will we generate positive benefits to society and our key stakeholders?
The two most crucial choices when creating a winning strategy are the where-to-play and the what-to-do-to-win, i.e. which specific customers to target and what winning propositions to offer them. It is essential for the leadership team to restlessly focus on the key choices that influence the customers, the true revenue decision makers.