Over the past few months we have been working with a number of companies helping them with their strategic planning process. From company to company the process to develop/update their strategic plan is quite similar, however the results differ.

Based on discussions with clients, the common problem that prevents forward progress is a lack of focus.  Almost all of these companies had too many improvement projects on their plate and, to borrow a phrase from an old movie, “a point in every direction is the same as no point at all.”

Here is how to narrow down the number of improvement projects.

I like to use an analysis that looks at “competence”. 

Competence falls into three categories:

 Simple Competence, an internal (to the company) activity that the company performs better than other internal activities.

Core Competence, is a well performed internal activity that is central and critical to the company’s strategy, competitiveness and profitability.

Distinctive Competence is a competitively valuable activity that a company performs better than its rivals.

Core Competencies are very valuable company resources. A competence becomes core when a well-performed activity is central to the company’s strategy competitiveness and profitability. Core competencies always results from collaboration across different functional areas of the company. These core competences reside in the company’s processes and people, not in its financial assets. If elevated, a core competence could give a company a potentially valuable competitive capability.

A competence is Distinctive when it provides the company with a significant advantage over the competition.  Distinctive competencies valuable capabilities that rivals do not possess. Strategic improvement efforts must focus on those competencies that cannot be easily replicated by the company’s competitors. In addition, these distinctive capabilities are considered “resources” with the potential of sustaining or creating a significant sustainable competitive advantage.

There are typically four tests that can be applied to the “Distinctive Capability” as a resource:

1.    Is the resource difficult to copy?

2.    Is it sustainable?

3.    Is the resource really competitively superior?

4.    Can the resource be overtaken by different capabilities from competitors?

By identifying these “Distinctive Capabilities” you create the potential for “Breakthrough Opportunities”. These breakthroughs are what you’re looking for!

A “Breakthrough Opportunity” is a radical and dramatic improvement in one or more organizational competencies.  These Breakthrough Opportunities usually involve a long-term effort that will require a fundamental rethinking of affected cross-functional processes.

To identify these “Breakthrough Opportunities” ask a simple question:

What is impossible to do in our industry… but if it could be done would fundamentally change the industry!

Think about this question because the answer is the key to providing focus.  Once you are clear about what needs to be done, the next step is to figure out how to make it happen. Over the next few newsletters I will go into the detail steps on how to actually implement a focused and effective strategic plan.

Copyright ©2014 Mike Stickler