Simons’ Seven Strategy Questions
Strategy is the driving force behind any business. Sure, a business needs products and services to sell if it is going to make money, but without strategy, those goods will never see the light of day. Everything that a business does on a day to day basis needs to be grounded in a fundamental strategy which has been laid out ahead of time.
Assuming you already have a strategy in place for your business, you may want to review the seven questions created by Harvard professor Robert Simons in order to better implement that strategy over time. There are sure to be problems along the way which threaten the way your strategy works, which is why these questions can be so helpful. Below you will find each of the seven questions offered up in this model, along with a brief explanation.
1 – Who is your primary customer?
All businesses should have a clear picture of their ideal customer. These are the people who are most likely to buy your goods and services over and over again. Of course, there will always be exceptions to the rules that you establish with regard to your primary customer, but targeting people in this established demographic will make for the best use of your resources. By advertising to the right people, and not bothering to advertise to the wrong people, you can optimize your entire strategy.
2 – How do you prioritize the needs of shareholders, employees, and customers with your core values?
The strategy you use on a day to day basis is going to have to be established with a hierarchy in mind. Between shareholders, employees, and customers, who do you please first? And how do you reconcile that choice with the core values on which you have built the business? Most businesses will start out by trying to please customers, as they are the ones with the dollars that can impact the business in a positive way. Of course, happy employees are also important, and your shareholders need to be satisfied as well. These groups need to be put in an order so you can make effective decisions, but in the end all will need to be cared for if you are to succeed.
3 – What critical performance variables are you tracking?
Tracking performance is something that is done by all companies, but some do it better than others. As you move forward with your strategic decisions, you need to be sure you are tracking the right performance variables which will set you on a path toward prosperity. Everyone in a decision making capacity within your business should have the tools in front of them to evaluate performance in a meaningful way. It will be up to you to determine which metrics are important for your operation based on your market, goals, etc.
4 – What strategic boundaries have you set?
Employees who operate on their own within the confines of the business are a risky proposition. While all employees like to have as much autonomy as possible, providing too much leeway can lead to trouble. Therefore, strategic boundaries are necessary to make sure lines aren’t being crossed in an unacceptable direction. Setting boundaries is a delicate balance between providing your team members with the flexibility they need to thrive and giving them so much freedom that they can get you in trouble. Strategic boundaries will always need to be adjusted as time goes by to ensure that undue risk is not being taken on thanks solely to one or two individuals within the organization.
5 – How are you generating creative tension?
One of the hardest things you have to do as a business owner or manager is to maintain ongoing innovation. It is easy to rest on your laurels after introducing successful products in the past, but those victories will not last forever. If you fail to innovate, you will go away – and usually quickly. Putting creative tension in place within the organization will cause your employees to continue looking forward for their next victory rather than looking back at what is already in the past. Your people and your organization have to be open to change, as change is the only way for progress to occur.
6 – How committed are your employees to helping each other?
Despite what you might currently believe, it is not necessarily true that all organizations need to be filled with employees who are ready to help the person at the next desk. Yes, in some cases, it is great to have a team full of helpful individuals contributing to the greater good. However, other organizations will be better served by a staff of employees who are more concerned with their own success and advancement than anything else. Such an environment is likely to foster tremendous innovation, as one person will be trying to top the next. Think about the kind of business you are running and decide what type of environment is going to be best for your teams.
7 – What strategic uncertainties keep you awake at night?
Even if you have a great strategy at the moment, you should already know that your strategy is going to need to change down the line if you are going to keep up. You can’t think of examples of any companies who stayed the same throughout their history and managed to succeed, because that is not how business works. Adaptation is critical, so you need to be thinking ahead about the strategic uncertainties in your business which will need to be settled sooner rather than later.
Business strategy is not something to be outlined right at the start of the company only never to be touched again. Just like anything else in the company, strategy is always changing and evolving to keep up with the times and your needs. Use the seven questions listed above to point your mind in the right direction and you should be able to come to conclusions which benefit your operation over the long haul.
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