In three weeks I’ll be finished with my last MBA class, the strategy capstone. I never thought of strategy as something limited upper management. Sure, big decisions are made in the big offices, but I always felt I could affect the big company through little actions in my part of the organization.
Strategy begins with stating the company mission, vision and value statements. These statements of purpose are typically preceded or immediately followed by a situation analysis like SWOT. The company then builds distinctive competencies based on internal strengths and weaknesses (SW) and external opportunities and threats (OT). These first few stages of strategy are usually reserved for C-level executives and EVPs.
The next step is where you can and I can contribute – building a competitive advantage. I’ve learned there are only two types of competitive advantage – a company can have a low cost structure or they differentiate their product commanding a price premium. For example, Walmart is famous for their low cost structure while Apple has differentiated products consumers will gladly pay up for.
There are four sources of competitive advantage; four strategies for lowering costs or commanding a price premium or doing both at the same time. First is efficiency or doing more with less. The second source is quality which is either reliability or excellence in a product or process. Third is innovation – the creation or evolution of new products or processes. The fourth source is responsiveness to customers by customizing products or the buying process to the needs and wants of the end user. Front line associates, supervisors, middle managers and directors are all capable using these strategies to build a competitive advantage.
My team has a specific and complex sales process they follow. This past week I mapped out this process in an easy to read flow chart. I’ve included my chart in most of my emails to the sales people during the week, and I’ve been talking about it during my store visits. I hope this will improve the quality or reliability or of our process. The better we execute our sales process the higher our closing percentage will be. This improves efficiency – more sales (output) with the same amount of customers (inputs). And the more closely we follow our service-heavy process the more we add value to the buying experience for consumers. This responsiveness to customer buying needs helps my salespeople differentiate from competitors and command a price premium. I hope to achieve these benefits from my tiny innovation – a flow chart depicting our sales process.
Strategy is not just for CEOs.