I’m halfway around the world, in Brisbane, Australia, where, yesterday, I finished an intense two-day strategy session for the top 50 managers of a company determined to take over the world. Maybe not your world, but the world of installing large AC systems.
During the strategy session, we stepped through a process of "strategic imagination" that I introduce in my next book, Outthink the Competition. I believe this process, or some version of it, is the beginning step for anyone who wants to significantly change things, to leave a "dent in the universe," as Steve Jobs famously said. (View my webcast here.)
Think of the process as 3-D chess, the fictional game Spock played in Star Trek to exercise his mind. The game is composed of three transparent chess boards, one layered on top of the other. It requires you to not only to protect against attack from pieces on your plane but also from pieces above and below you.
Great innovators think on multiple planes. Sun Tzu, the ancient Chinese general known for The Art of War, advised that to win, a general must consider three levels of the battle: heaven, man, and ground. For those of us fighting business battles rather physical ones, Sun Tzu is talking about the environment (heaven), our company (man), and other players (ground). Like a great general, you want to consider all three planes before launching your strategy. Here is a set of questions to help you do this:
1. Heaven: What environmental factors should you be preparing for? My client here in Australia discussed things like the growing importance of environmentally friendly systems, the growth in mining driving new construction, and the rising importance of Asia. Over the next five to 10 years, what environmental factors should you be planning for? Plan for them now to leapfrog your competition. Consider four factors:
- Macroeconomic trends. What will interest rates and GDP growth rates look like over the next five years?
- Societal shifts. How will customer buying behaviors and needs change?
- Technological innovations. Will the growth in cloud computing affect your industry? What other industry-specific advances are in the pipeline?
- Regulatory shifts. Will regulation grow tighter or loosen in your industry over the next five years?
2. Ground: What will other players be doing over the next five years and how can you turn these possibilities to your advantage? Consider at least four types of players:
- Competition. Who are your top competitors and what do you think they will be doing over the next five years?
- New entrants. What new competitors or competing products/services are likely to enter your market (e.g., from abroad or from another industry)?
- Suppliers. How is your industry’s supply chain going to change? Are suppliers getting more powerful or less?
- Distributors. Will your dependence on distributors grow or shrink? Will the need for distributors disappear as is happening in so many industries? How will your distributors’ needs and goals change over the next five years?
3. Man: Looking at the “heaven” you will be fighting under and the “ground” you will need to navigate, what do you want to be or achieve? Remember George Bernard Shaw’s quote, “The reasonable man adapts himself to the world; the unreasonable man persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.” Don’t just try to fit into the future you have imagined so far; seek to shape it. Define who you will be in two ways:
- Vision. Describe what your ideal will look like. My client described things like their reputation, the happiness of their employees, their importance to large building developers.
- Metric (this is often the hardest part). What one to three metrics can you use to define if you have achieved your vision? What numbers are consistent with you achieving your vision? They could be as simple as revenue or number of employees. They could be as creative as the number of times you get home before 5 p.m. or, in the case of my client, the amount of energy that their AC systems manage.
Sun Tzu wrote, “All men can see the individual tactics necessary to conquer, but almost no one can see the strategy out of which total victory is evolved." A superior strategy begins by creating a vision of victory beyond what your competitors see. These three steps will help you get there.
[Image: Flickr user Krypto]