“Business strategy” is a powerful phrase. People like to use it to impress others, and audiences listen up when you talk about it. But it’s also one of the most overused and — in some cases — misused phrases.
These days, I hear the term thrown around a lot. Businesses and so-called thought leaders talk about emerging trends in strategy with each passing year. But must these strategies change over time?
There is a saying that 20% of businesses in every industry take in 80% of the earnings. I believe this is because they have a time-tested business strategy that encompasses each of the following basic principles, which are based on the ideas of the renowned Prussian military theorist Carl von Clausewitz and incorporated in the U.S. Army Field Manual of Military Operations.
Clausewitz, a widely-renowned strategic theorist, believed that war and business shared a good deal of similarities and that both involve a clash of interests. His insights and strategy not only significantly influence modern business, but also offer an opportunity for managers who want to improve their global business strategies.
The Principle of Objective
Every action must have a clearly defined and actionable goal. That’s the first principle of an effective strategy. Though it may sound obvious, I cannot stress the importance of being certain on what you have set out to accomplish — and how you plan on achieving it.
Business owners who spend time defining clear objectives for their company and employees are usually the most profitable, and by a significant margin. These businesses carry out their operations in the most efficient and effective manner because each employee (no matter how many there may be) knows exactly what their role is, what they are expected to deliver, and by what time they need to do it.
My company’s vision is to “build delightfully smart tools.” It’s an objective that trickles down to every single employee as a clearly defined statement of purpose.
The Principle of Offensive
Business, like war, is an intense fight for survival — and survival requires you to be on the offensive. As a technology entrepreneur, I constantly make adjustments to thrive in today’s economic climate.
Challenging your competitors and winning battles is the only way to move up the ladder of success. Every market has challenges, and only by taking them head-on can you create your own space.
History shows you don’t win battles on the defensive. Rather, you need to identify your competition’s strengths and, and more importantly, their weaknesses. Look for a chink in the armor that can be exploited. Instill a “relentless attack” mindset, continuously going on the offensive with new products, services and ways to reach your ideal prospect and communicate with them.
The Principle of Mass
The principle of mass is about concentrating your power at the right place and time: “Concentrate combat power at the decisive place and time.”
Applied to business, this means you should wait for that decisive moment before you seize the opportunity. And when that moment is upon you, only then should you concentrate all your resources to achieve the desired market position. This is often seen in practice by businesses that deal with seasonality, where major transactions are carried out over a small period of time requiring a massive allocation of resources.
The Principle of Maneuver
Businesses need to remain flexible and have enough maneuverability to continue pursuing innovative and creative ways to better serve their customers. Despite all odds, and no matter what the competition does, businesses need to continue moving forward and always look for simpler, cheaper and faster ways to serve customers, increase sales and achieve higher returns on investment.
The principle of maneuver requires you to use speed, surprise and economy of effort as the key elements with which to defeat your competition. If you don’t move decisively, you stagnate. And when you stagnate, you risk going out of business. Maneuver is an act of initiative, resulting in long-term business gains and sustainable growth.
The Principle of Surprise
The most common and classic mistake that a business can make is to be predictable. This doesn’t necessarily mean you need to introduce a brand-new product, but it can often be in the form of an improved and repositioned product that has been given a major overhaul.
In order to stay ahead of the competition, businesses need to constantly strive towards developing a competitive advantage with products, marketing strategies, services, processes, sales strategies and by adopting new technology.
The Principle of Security
As a business, you must protect your valuable assets and resources. Your competitors are always on the lookout for any vulnerabilities that you may offer, which they could exploit to gain an advantage.
Social, mobile, and cloud technologies have grown integral to the functioning of most businesses, leading to higher levels of innovation and business transformations. Security should no longer be a deterrent to this momentum; rather, it’s time for businesses to analyze and mitigate risks to acceptable levels while moving forward.
The Principle of Simplicity
In the words of Karl von Clausewitz, “Everything in war is simple, but the simplest thing is difficult. The difficulties accumulate and end by producing a kind of friction that is inconceivable unless one has experienced war.”
As a strategic leader, you need to make several decisions as you plan ahead. What’s important, however, is that these plans remain clear, succint and easy to understand if they are to be executed without issue.
By taking these steps, you put yourself in the position to scale your company and maintain your advantage against changing markets and new competitors over time.