Strategic Anchors – How Will We Succeed?

Figuring out how you will succeed is very tough. Do you cut prices, do you add features, do you outsource, or do you differentiate? “We need to focus on just a few things.” “We need to broaden our scope.” “We need to invest more in development.” “We need to stick to the tried and true.” How will we succeed is question #4 in Patrick Lencioni’s book, The Advantage. Before you determine how you will succeed, you need to clearly understand why you exist. You also need to understand what you are good at, not what you would like to be good at, as articulated in Jim Collins’ Hedgehog Concept.

So now you have rolled up your sleeves and have determined that you and your team are going to win the game – beat the competition and grow a sustainable company that provides wealth to everyone. In the Harvard Business Review article, What is Strategy? Michael Porter states, “A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at a lower cost, or do both.”

Here are a few key points to consider:

1. Recognize that your company needs to be viewed as a whole system, representing a collection of activities. For example, your services group has been told, and is evaluated, on providing a repeatable software product with high margins. Your sales group has been directed to represent the company as flexible and willing to customize. This scenario represents incompatible activities.

2. Clearly understand all of the activities within your company, realizing they do have impact on each other. Then ask yourself which are compatible and which are incompatible.

3. Succeeding requires intentional decisions that support the best chance for a company to achieve. Intentional infers pro-active and committed, not reactive and flavor-of-the-month leadership. This is hard work, requiring a fair amount of elbow grease, constantly.

4. In The Advantage, Lencioni discusses strategic anchors. The leadership of a company identifies three anchors that are used as lenses through which every decision must be viewed. A few examples of anchors are: product superiority, lowest price in the market, and individualized service. What are your three anchors and thus the three lenses that you will evaluate all decisions?

5. Agreed-upon anchors (see your exhaustive list of activities to help determine your anchors) are very powerful. They help to minimize the tendency to make opportunistic, bright-and-shiny object decisions. Anchors protect against seemingly pragmatic decisions that can derail a company in the long run.

6. Anchors support credibility. Employees may have a dose of skepticism when it comes to management’s plans. Putting your decisions through the gauntlet keeps you honest and transparent (latest buzzword!), resulting in employees who believe that the executive team really does have a strategy and are willing to invest their brain power and energies to make it happen.

By Julia Hill-Nicholas; February 11, 2013