171 – Is Your Firms Strategy Driving Sustainable Growth?

171 - Is Your Firms Strategy Driving Sustainable Growth?

I was recently in Adelaide also known as the city of churches, delivering a full day workshop on strategy to a group of entrepreneurs.  I asked them to take a piece of paper write their business strategy in one sentence.  The kicker is they only had three minutes to do this.  These business owners struggled to state their firm’s strategy in one simple sentence. Why? It’s a difficult exercise to do.  Would you be able to state your company’s strategy in one simple sentence?  Today’s episode we will discover your why…. What is your core purpose?  This is just the start of a series of episodes on business Strategy. In the following weeks we will cover difference between SWOT & SWT, how to differentiate your company from the competition, how to discover your X-Factor to gain a 10 times advantage and learn about Big Hairy Audacious Goal’ or BHAG for short.  We will have all these free worksheets, on our show notes page compliments to Vern Harnish from Gazelles.

How do you know if you have a great strategy?  This part is simple. If you have a great strategy your top line revenue will reflect.  If you revenue is flat or declining you most likely have a strategy issue.  A solid strategy ensures a growing top line!  So how do we define Strategy?  I like Michael Porter's definition as the basis, companies need to position themselves so that they are competing to be unique. It is this differentiated position that is the foundation of capturing your share of the market.  The best action we can take is to create a strategy that avoids competing with rivals on the SAME DIMENSIONS. Building a strategy is about developing, refining, and leveraging foundational elements that make you UNIQUE, which in turn drives confidence in predicting the future growth of your company (and then making it happen).  So how can your company be different?

Simon Sinek has a great ted talk on how to improve strategic thinking. He asks the question.  Why are some organizations more innovative, more influential and more profitable than others? And, why do some command greater loyalty from customers and employees?  Have a listen to Simon describe the Golden Circle explaining People don't buy what you do, they buy why you do it.

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So, what is your WHY?  What is your core purpose? An organization’s Core Purpose is their reason for being according to Jim Collins’ work and also answers the question ‘What difference are we making in the world?’ It goes deeper than profit and job creation.  Let me give you some examples of Core Purpose that you will most likely recognize:

Starbucks’ Core Purpose is to provide an ‘Escape’ from one’s busy day with a personalized beverage

RedBalloon’s Core Purpose is to ‘Change the world through gifting (gratitude)’ experiences.

Medtronic’s Core Purpose is to ‘Restore’ the health of people who can benefit from their products.

Each of these companies is highly profitable and employs thousands of workers but also has a deeper reason for being and is making a difference in the world according to what is important to them.”

“Jim Collins, in his research and book Good to Great, discovered important information about Core Purpose from the ‘Great’ Companies. Here are 5 important attributes of Core Purpose, gleaned from the research, as we move toward helping you consider, craft and refine your Core Purpose:

  • Higher purpose beyond profit –
  • Does not change, but inspires change
  • Works around obstacles
  • Inspires team and volunteerism
  • The difference you make in the world.”

Core Purpose often has its origin with the founder., simply ask the question: ‘Why did you start the business, tell me your story?’ and then listen carefully. Often you will find the Core Purpose in this story!

Other important questions to ask the leadership team include: Why do we exist? What would happen if we went away? Why do I devote my creative energies here?

In his book Conscious Capitalism, John Mackey identifies 4 types of Core Purposes that are helpful as we consider what your company’s purpose is;

1) The Good: Choosing to provide ‘Service to others,’ which The Container Store is exemplary for doing.

2) The True: In ‘Search for truth and knowledge,’ which Google illustrates through their business model of search.

3) The Beautiful: The ‘Pursuit of beauty, excellence and quest for perfection,’ as lived out by Apple and their elegant product design.

4) The Heroic: Embracing and acting on a ‘Desire to change the world,’ as Grameen Bank has shown us through the lives touched in their efforts.

If you are unfamiliar with Grameen Bank.  Grameen micro credit movement – founded in 1976 – targets women from the poorest households. Today, its branches reach into more than 80,000 villages (more than90% of Bangladesh) and it has nearly 8 million borrowers the vast majority of whom are village women.

Consider the framework of these 4 types of Core Purpose as you develop, refine and message your own. These 4 types also help us eliminate the trivial and get to the heart of purpose by using them as a litmus test.”  What’s at the heart of your core purpose?

RedBalloon and their Core Purpose to ‘change Australia through gifting,’ which is about using gratitude to touch people’s hearts and lives and make a more positive community.

Naomi Simson is the founder of Red Balloon and she is indeed changing Australia through gifting as she recently exceeded her original Big Hairy Audacious Goal (BHAGTM) of providing 2 million gifting experiences to Australians! She and her team have done an outstanding job of not only setting an inspirational Core Purpose, but also a BHAG that makes it real and measurable!”

Have a listen to Naomi Simson inspiring story as she explains how she started RedBalloon and what she has accomplished!

If you are struggling with developing your Core Purpose we have a worksheet on our show notes page to help you develop or refine your company’s Core Purpose. Start with Why did you start the business, tell your story?’ Answering the question ‘What is it that your company does today?’ Then, ask ‘Why [do you do that]?’ Keep asking ‘why?’ up to 5 times, each time seeking to get to a deeper level of purpose. This is hard work and it takes time to develop a compelling purpose.

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Quote from Simon Sinek ”Working hard for something we don’t care about is called stress; working hard for something we love is called passion.”

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