A Simple Strategy

Whether your company is a Fortune or a $50 million operation, in order to be successful, you must operate from a simple strategy. Now, let’s not confuse the word simple with easy; at times simple is very difficult to achieve. Yet, if a strategy is not simple enough that every employee of a company can not only understand the strategy, but knows how the strategy guides their day to day activities, it will be difficult.

According to Dr. Chuck Bamford the end result of strategy development need not be more complex than a one page map containing five key elements: Value Drivers, descriptions of Stakeholder Experience, Critical Success Factors, Must Do’s and Metrics. The map also includes a Mission Statement based on the strategy elements. In this article, I would like to give a brief illustration of each element.

To illustrate I will use the example of a well known company, Starbucks. Although Starbuck’s performance has not been stellar the last couple of years, no one can deny that in building the Starbuck’s brand the company succeeded brilliantly. Starbuck’s Mission Statement is, “To inspire and nurture the human spirit— one person, one cup, and one neighborhood at a time”. What follows is my own decomposition of their Mission Statement to illustrate the strategy elements.

Value Driver

A Value Driver is a short statement that expresses how a company will create value for their client. The statement is based on the resource capabilities that the company possesses and utilizes for their client. A possible Value Driver that could serve as one piece of the foundation of Starbuck’s Mission Statement might be, “Feeling at home”.

Stakeholder Experience

The Stakeholder Experience consists of a series of statements that represents the stakeholders’ view of the value driver in action. The statements are what the company hopes to hear from their stakeholder to confirm that the value driver is correct, and also if the company is executing on the value driver. Some examples of statements that Starbuck’s might seek are: “At my Starbuck’s, they know what I want before I ask” and “The Starbuck’s staff are like my friends”.

Critical Success Factors

Critical Success Factors are the first crucial link between strategy and operations; the company must get the factors right in order for the Stakeholder Experience to happen. Critical Success Factors for the Stakeholder Experience described above might be, “Staff Knowledgeable about products”, “Staff Knowledgeable about customers” and “Staff well trained on drinks, able to engage customer”.

We should note, at this point, that when a strategy map is developed for a company, the first three elements that we have outlined above are the same for every employee of the company, from the CEO on down. In contrast, the next two elements may change for different functions within the company.

Must Do’s

Must Do’s are the activities that each function within a company must perform in order to create the Stakeholder Experience. These could vary depending on the function. For example, in order to have employees who are able to prepare drinks quickly and correctly, the training department must create effective training programs.

In order to motivate employees, Human Resources must hire the right kind of people and put in place a structure that will motivate. At Starbuck’s “baristas” must be outgoing and friendly and know their clients well. Starbuck’s also has different levels of certification; have you ever noticed the different color aprons on Starbuck’s employees?

Metrics

The final element, Metrics, does not change for different functions within the company. The collected metrics are studied to see how well the company is performing and give the company the ability to change operations quickly if performance is not where it should be. For example, metrics that could support the “Feeling at Home” Value driver might be to conduct a count in different Starbuck’s that determined how many customers came through in a period of time, and of those customers, how often did the employees know what the customer wanted before they even ordered.

A simple strategy is clear, easy to understand and creates direct links between operations and strategy. If you would like more information on creating strategy, I highly recommend Dr. Chuck Bamford’s most recent book, Strategic Management: Value Creation, Sustainability, and Performance, published by South-Western College. In addition, Dr. Bamford will have an edition for Entrepreneurs titled Entrepreneurship: A Small Business Approach to be published in January 2010.

5 thoughts on “A Simple Strategy

  1. Thanks for a great entry!
    I’m working my way through these 5 steps now and it is very helpful.
    Although there are many other elements to consider, boiling it all down now and then is a valuable lesson.

  2. Kevin, Iv’e been perusing your posts – great stuff. I got to this one on simple Strategy, and will use it. I’ve taken notes, and found the Starbucks example to be very helpful. As an entrepeneur- have been laden with tons of great advice, but often have to wade through technical language and do much educating (and some guessing) on how to use it.
    I’ve been working on our Business Plan, but struggling with the strategy – we have much in process already, and know where we want to head, but this gives me perameters and definition.
    We have two absolutely great innovations that speak for themselves, but the business end of things has been quite a load.
    So, I thank you heartily for your wonderful (and free) advice that “puts the cookies on the shelf” so to speak.
    I use much story telling in the promotion of our products, mainly of their inception and development by my Contractor husband in the field –
    practical, real-life stuff, and I get a great response.
    However, now with the economy, I’m having to do all the facts and figures to get people to spend money, and it’s much harder!
    Sincerely,
    Lynne Hamilton

  3. Many thanks for doing this! Magnificent!

  4. […] previously published Blog, I described a Strategy Map as originally conceived by Dr. Chuck Bamford (A Simple Strategy). The Map is an effective tool to create a company wide strategy that is simple to comprehend and […]

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