Principles of strategy range from Sun Tzu's ancient writings on war to Michael Porter's five forces. While the approaches vary, certain broad strategic themes emerge. These themes act as "compass points" to guide your decision-making. Your MAP is the markets and business challenges before you. The principles provide direction for thinking through courses of ACTION when you are considering strategy.
Voyager begins its analysis with nine principles of strategy. These principles are based on concepts that have been tested for millennia in widely divergent disciplines: business, government, diplomacy, game theory and war. In these areas of endeavor, people make decisions in a complex, ever changing environment where they pit their wills against those of others. When you compete, the principles of strategy apply.
When thinking through strategy questions, the compass points on the MAP can be captured in a mnemonic acronym "MOOSEMUSS." This acronym serves as a quick reference point (not unlike "SWOT") to help you and your team members think through overarching principles of strategy when making decisions. This acronym has its origins in military doctrine, but the principles suggested by the acronym apply to any endeavor involving:
- Complexity
- Constant change
- Opposing interests
The acronym also makes it easier for team members to absorb new information and see potential new opportunities within a context of strategy. They will put data into context faster, comprehend its meaning more deeply, and remember it longer. In the long run, it helps your organization make better decisions faster.
Following is a brief overview of the nine principles of strategy that Voyager applies to help you and your team members achieve success. Analysis of your operations and the potential paths to success are addressed through detailed analysis, but this high level overview presents the compass points on the MAP.
STACK THE PROBABILITIES OF SUCCESS IN YOUR FAVOR.
1Mass
Understand your organization's core strengths and apply those strengths to achieve a critical mass within your target markets. This means more than "go with your strengths." It means a course of action where you strike for success and then leverage that success to reach even further into the markets you are targeting. Failures are to be evaluated as possible signals for striking in other directions. Over time, your "strengths" become "stronger." They change. You build momentum--focused momentum.
As a college undergraduate, Bill Gates teamed with his childhood friend Paul Allen to develop a version of the BASIC programming language for the brand new Altair microcomputer. Neither had ever seen an Altair computer or the processor inside. They successfully simulated the entire Altair workings—hardware and software—using a totally different computer over a thousand miles away. It was that insight—software dominant over hardware—that set the course of what was to become Microsoft. They understood where they could achieve critical mass in a target market.
As a college undergraduate, Bill Gates teamed with his childhood friend Paul Allen to develop a version of the BASIC programming language for the brand new Altair microcomputer. Neither had ever seen an Altair computer or the processor inside. They successfully simulated the entire Altair workings—hardware and software—using a totally different computer over a thousand miles away. It was that insight—software dominant over hardware—that set the course of what was to become Microsoft. They understood where they could achieve critical mass in a target market.
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2Objective
Write an effective action plan and put systems in place to measure goal achievement. Everyone in the organization should know the objective. Understand what you intend to become.
In the early 80's, Intel faced especially stiff competition from two firms, Motorola and Zilog. Intel leadership initiated what was to become known as "Operation Crush" or "Orange Crush" in order to entrench Intel's position in the business application segment of the 16-bit microprocessor market. Before "Crush" was launched, the Company dedicated vast resources to communicate with customers in order to understand needs better. Top management coordinated carefully with sales people in order to hone a clear objective. Above all, leadership listened. The clear objective led to the development of a new product that enabled Intel to move dramatically beyond the competition...for the long-term.
In the early 80's, Intel faced especially stiff competition from two firms, Motorola and Zilog. Intel leadership initiated what was to become known as "Operation Crush" or "Orange Crush" in order to entrench Intel's position in the business application segment of the 16-bit microprocessor market. Before "Crush" was launched, the Company dedicated vast resources to communicate with customers in order to understand needs better. Top management coordinated carefully with sales people in order to hone a clear objective. Above all, leadership listened. The clear objective led to the development of a new product that enabled Intel to move dramatically beyond the competition...for the long-term.
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3Offensive
Seize the initiative. Anticipate your customers' needs, and then move faster than your competitors. Analyze possibilities, make decisions, act. Leverage time.
Are iPods orders of magnitude different from other portable media players? Apple's decision-makers had seen that people are willing to pay a price for music and that they want a simple user interface. Done. The technical capabilities built into iPods do not significantly differentiate them from other equipment. Before the others woke up, Apple had delivered what people want.
Are iPods orders of magnitude different from other portable media players? Apple's decision-makers had seen that people are willing to pay a price for music and that they want a simple user interface. Done. The technical capabilities built into iPods do not significantly differentiate them from other equipment. Before the others woke up, Apple had delivered what people want.
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4Simplicity
Keep your marketing message clear. In a complex environment, making things simple isn't easy—but it is profitable. Communication is the key. Simple means "simple to understand."
"Lowest prices always." A marketing message. A managerial mandate. A philosophy.
"Lowest prices always." A marketing message. A managerial mandate. A philosophy.
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5Economy of effort
Keep your assets employed effectively. Leverage them. Don't waste time on side shows. Foster new ideas with the right commitment. Stay focused on your main effort. Don't get distracted. Apply energy to support success of your key efforts.
Even if the brands Aston Martin, Jaguar, Land Rover, Mazda and Volvo have the potential for profitability, to what extent does ownership of these brands distract Ford Motor from leveraging its core strengths? Penetration of non-U.S. markets is a complex undertaking. Can it be done without diluting your mission?
Even if the brands Aston Martin, Jaguar, Land Rover, Mazda and Volvo have the potential for profitability, to what extent does ownership of these brands distract Ford Motor from leveraging its core strengths? Penetration of non-U.S. markets is a complex undertaking. Can it be done without diluting your mission?
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6Maneuver
Take advantage of opportunities in a changing market. Maneuver your company to displace competitors. Identify opportunities and move toward them quickly. You must also maneuver successfully in the minds of customers and prospects. You must maneuver around inertia, ignorance, and complacency. Voyager will not assess competition simply to help you "beat" them, but rather to help you maneuver closer to the customer. The objective is to render the competition irrelevant.
In 1983, Intel, which had built much of its business on the manufacture of SRAM and DRAM memory chips, faced increasing pressure from Japanese memory-chip manufacturers. Andy Grove, who had taken the management helm from Robert Noyce and Gordon Moore, decided to maneuver production capacity towards microprocessors. This move enabled Intel to navigate away from Japanese pressure and toward the nascent desktop computer market that was about to explode. Within a decade, Grove maneuvered inside the minds of buyers by developing the "Intel Inside" campaign. A highly complex electronic device which would be a total enigma to the vast majority of society became a comfort blanket.
In 1983, Intel, which had built much of its business on the manufacture of SRAM and DRAM memory chips, faced increasing pressure from Japanese memory-chip manufacturers. Andy Grove, who had taken the management helm from Robert Noyce and Gordon Moore, decided to maneuver production capacity towards microprocessors. This move enabled Intel to navigate away from Japanese pressure and toward the nascent desktop computer market that was about to explode. Within a decade, Grove maneuvered inside the minds of buyers by developing the "Intel Inside" campaign. A highly complex electronic device which would be a total enigma to the vast majority of society became a comfort blanket.
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7Unity of Command
The core principle is "all of the company functioning as a single mind." This doesn't mean one person runs everything; it means that responsibility for any given task must lie with one, and only one, person. Delegate. Give authority. Define what needs to be done, ensure comprehension, and measure results.
Jack Welch and Bill Conaty, his HR head, joined forces at GE to pick the best leaders and let them run. While "Jack" was known the world over as an excellent manager, his greatest accomplishment, and lasting legacy, was his capacity to grow talent around him. He established the leader's intent, communicated it clearly, made sure he had the right people to carry it out, and then he gave them room to execute. It sounds so simple, but it is the hardest thing to do right.
Jack Welch and Bill Conaty, his HR head, joined forces at GE to pick the best leaders and let them run. While "Jack" was known the world over as an excellent manager, his greatest accomplishment, and lasting legacy, was his capacity to grow talent around him. He established the leader's intent, communicated it clearly, made sure he had the right people to carry it out, and then he gave them room to execute. It sounds so simple, but it is the hardest thing to do right.
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8Surprise
Catch your competitors off-guard by using speed, focus and maneuver. Surprise your potential customers with innovative ways to make them buy your offer. Then surprise them with great post-sale service.
Southwest Airlines came out of nowhere. The initial premise was to get people where they wanted to go…cheap and on-time. Easy enough concept. But then the flight crew started telling jokes and the experience of flying changed overnight. Southwest continued to please and surprise customers with on-time landings, baggage handling, friendly attitude at every turn, same-day air freight, senior discounts, ticketless travel, self-service check-in kiosks, and other offerings that continue to build loyalty.
Southwest Airlines came out of nowhere. The initial premise was to get people where they wanted to go…cheap and on-time. Easy enough concept. But then the flight crew started telling jokes and the experience of flying changed overnight. Southwest continued to please and surprise customers with on-time landings, baggage handling, friendly attitude at every turn, same-day air freight, senior discounts, ticketless travel, self-service check-in kiosks, and other offerings that continue to build loyalty.
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9Security
Listen carefully. Have the uncomfortable but profitable conversation. Gather competitive intelligence constantly. Test the outcome of your decisions. Evaluate your performance relative to the market and your competition. Question assumptions.
In 1932, John Caples published the classic Tested Advertising Methods. This book has been reprinted at least fourteen times, and it remains a testament to the principle of "security." Test your advertising techniques and measure results objectively. David Ogilvy furthered this with his dictate, "always research what makes consumers respond before you start brainstorming creative." The internet age, with all of its "Google wonders," remains subject to the rules expressed by Mr. Caples and Mr. Ogilvy. Security is not about hiding. It is about taking the offensive wisely.
In 1932, John Caples published the classic Tested Advertising Methods. This book has been reprinted at least fourteen times, and it remains a testament to the principle of "security." Test your advertising techniques and measure results objectively. David Ogilvy furthered this with his dictate, "always research what makes consumers respond before you start brainstorming creative." The internet age, with all of its "Google wonders," remains subject to the rules expressed by Mr. Caples and Mr. Ogilvy. Security is not about hiding. It is about taking the offensive wisely.
The nine principles of strategy are the compass points on the MAP to help people in your organization grow revenues faster, reduce cost of sales and implement systems for sustained success.
STACK THE PROBABILITIES OF SUCCESS IN YOUR FAVOR.
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