Different for a Cause: the little known factor behind superior performance.

by Dr. Brian Reuben

Brian Reuben

Once the idea behind the strategy is lost, all the company is left with will be mindless pursuit of gains.

‘Hello and thank you for calling us, all our available agents are busy, please hold?’ This was the third time I was calling. It was a hotel booking company. I was already in a car from the airport  to the hotel when I called the hotel and learnt my booking wasn’t yet confirmed. I waited on the line, my airtime was running, it was approaching 30 minutes and all I hear was hakuna matata. Then like the previous time it disconnected.

How did I get here? How did I get to pay this company for this headache I obviously don’t want? Well they made a promise that I was interested in and I signed up, but now they are unable to deliver on that promise. I’m not sure this was deliberate, I think it’s a question of ignorance. This is what happens when people make a promise and lack the structure to deliver on it. Today, the company is out of business. The management may have argued if I had charged them of lacking in strategy. If they had one and by that I don’t mean a nice document labeled ‘Strategy’, they will not be out of business.

Strategy is one of the most powerful concepts in business. It is the only power the manager has against the environment, the only guarantee that invested time, knowledge, finances and other efforts will not be in vain. Managers are well aware of this and devote good amount of efforts, finances and other resources in the pursuit of it’s understanding.

While authors have described the concept in several different ways, the central idea shows that strategy is fundamentally about making choices. It’s a company’s choice on how to be different. The reason is, in a crowded and super competitive market place the only reason why customers will prefer one offer over another is because it’s different. A difference that reflects on what the market cares about. A difference that increases the value the customer takes home by lowering his risk and/or his opportunity forgone.

This usually begins with a compelling value proposition, a promise so great and emotionally compelling it causes people to take notice and take action. But making this unique promise is just one important step, delivering on it is a totally different thing. Delivering on this promise depends on the company’s ability to carefully choose a unique set of activities that are consistent with the promise made. Yet, the company must also ensure these set of activities that structure it’s approach in delivering on the proposition fit together and give a strategic reinforcement to one another. With these in place and as they reject markets and promises not consistent with their chosen approach while remaining on the same strategic path, they will deliver on the promise. The result will be superior performance.

But executing a strategy and delivering on the promise is complex and not simple, expensive and not cheap. For example when Lou Gerstner became the CEO of ailing IBM in 1993,  officials at IBM’s headquarters said the board approved a package for Gerstner that starts with a “one-time transition payment” of about $5 million and a salary of $2 million for the nine months that remain in 1993.

By 1998, IBM, citing a surging share price and a broad turnaround in corporate performance, paid Chief Executive Louis V. Gerstner Jr. $9,375,000 in salary and bonus, up 56% from 1997. That’s how much it can cost to execute a strategy. 

But it’s worth every effort because when strategy is done right it guarantees superior performance. That’s why it matters. So successful  executives take strategy very seriously because that’s the only way to guarantee success and get returns on capital invested. This makes business growth and expansion possible.

But what’s more important is not just the perfection of uniqueness in and by the organisation but the reason for it. If your difference is just for the purposes of making money more than any other company,then it’s nothing important. Open a newspaper, turn on the television news, or flip through any number of Internet sites, and it won’t take you long to find the stories of companies that have lost their way in the frantic chaos of existing and doing business today. Many of them didn’t loose their way because they never had a great promise or because they didn’t have the right set of activities to effectively execute. They lost their way as a result of competitive myopia which is what happens when the company forgets why they are in business in the first place and the reason for their strategy. ‘Once the idea behind the strategy is lost, all the company is left with will be mindless pursuit of gains’.

Locked in on gains, the company developes environmental insensitivity, unable and unwilling to serve a higher purpose through their products and services, they loose the ability to see a clearer picture of the value they serve. You see, businesses truly grow through innovation. According to Peter Drucker, there are only two duties of the entreprise- innovation and marketing. But innovation is not a business constant, it does not exist on its own. ‘Innovation is the result of human ability to see things as they ought to be beyond what they currently are. As the furniture company sees a better picture of office furniture, they respond with a new product. As they see beyond their current process to a better way of processing value, they respond with business process innovation’.

‘This ability to see comes from the desire to make life better and extend freedom. Organizations remain in the market because they are able to evolve themselves and not only keep pace with the environment but lead the change’. ‘Strategy is scenario specific, as the scenario changes, the strategy must be reviewed. Yet reviewing the strategy as the scenario changes will only keep the company running behind and trying to catch up. The chances will not be good’.

Truth is, the environments don’t change by themselves. Scenarios change mainly  as a result of human action. Changing the scene of course requires the ability to see another scene which others do not see. This ability to see is the difference between leading companies and those trying to catch up.

Seeing unseen scenarios and bringing them about depends on your positioning. This time, I’m not referring to strategic positioning but value-positioning. Values are at the very foundation of market leadership. They are the road map of the strategist in his walk along unfamiliar terrains. The values the organisation stands for determine what they see when they look. One company sees people without shoes and thinks of how much money he can make, another sees the same people and thinks of how different their lives can be made when they wear shoes. So you have the same situation, but very different perspectives.

It is your ability as a business leader to see things differently that will enable you to make a unique promise and arrange activities differently to deliver on the promise. So you are different for a higher cause not based on some desire to make more money. ‘When values become the lens through which the manager sees, innovation becomes a natural consequence in products and services, process and model’. This commitment to a cause greater than profit is the power behind Steve Jobs ability to see through the chaos in the music industry and knew what was really going on when the key players in the industry were all confused and going to court.

Values are really what empowers people to be productive, once you pursue uniqueness because of your desire to ethically add value and superior performance.

Dr Brian Reuben is one of the most sought after thought leaders on the subject of Strategy in Nigeria. He speaks at business events globally. He has advised and mentored senior executives in several organisations including Africa-Reinsurance Corporation, Savile Energy Luxembourg, Department of Petroleum Resources, Trident Energy United Kingdom,  BusinessDay, Dolphin Telecom among others.

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