How to get clarity on your strategy for 2024

Dominic Monkhouse

Share on Twitter Share on LinkedIn Share on Facebook

Did the festive season offer you a moment to reflect on your business? Perhaps stepping away and taking a break has highlighted that your current path might not lead where you want. The desire to diverge from the patterns of 2023 and previous years is clear—you’re seeking a fresh approach for 2024, aiming for transformation and growth.

It’s clear why our inboxes and phones are bustling come January. New or prospective clients reach out, eager for the guidance we offer. They’re not just seeking change; they’re chasing significant growth, armed with the resolve that the new year brings to chart a new course for their business.

After a brief exchange to warm up, I dive deep with a direct question, “What’s your strategy?” Often met with silence, the CEOs ponder before responding with goals like 10% growth, breaking into new markets, or launching new products. Yet, these are not strategies but rather tactics or ambitions. This distinction is crucial; a strategy encompasses the overarching plan to achieve these goals, not the goals themselves. It’s about the ‘how,’ not just the ‘what.’

It’s the difference between playing golf and practising golf.  If it’s been your hobby for ten years, it’s unlikely you’ll get much better at it. However, if you’ve set a goal to reduce your handicap in a certain timespan and broken it down into hitting x number of fairways in regulation and x number of putts per hole, you’ll be well on your way to improving your game. (Our client Callum, MD at ETCH, is a great example here – he’s now playing off scratch due to setting his goals and putting in the work.)

Work out your position in your market

Understanding your strategy is about identifying your business’s unique position in the market and differentiating you from competitors through long-term choices. This strategic position can be visualized on a graph, with customer willingness to pay on the X-axis, and cost efficiency on the Y-axis. The focus should be on enhancing customer value, enabling you to charge more or operate more cost-effectively than rivals. This approach centers on solving customer problems guiding your business strategy’s direction and choices.

I had an enlightening discussion with April Dunford on The Melting Pot podcast, focusing on optimal strategies for business positioning. April shared valuable insights on differentiating a business in a crowded market, leveraging unique strengths, and clearly communicating value to customers. Her expertise in positioning provided practical advice for businesses looking to carve out a distinct space, emphasizing the importance of understanding customer perceptions and competitive landscapes. This conversation offered a wealth of knowledge for any business leader aiming to refine their strategy and stand out.

Consider the airline industry as an example. You could emulate Emirates, focusing on high revenue from business and first-class services, offering a premium product at a higher price. Alternatively, you might opt for a model similar to Ryanair’s, emphasising low base prices with additional fees for extras. Your business’s profitability and competitive advantage will hinge on the chosen model’s cost structure and its ability to generate net profit compared to industry standards, determining if your strategy secures a sustainable competitive advantage.

Decide where and how you’re competing

Work out your core customer’s needs and which price point you will adopt.  Get a clear picture of your competitors now and in the future.  You might see a change over time. When I was MD at Rackspace, AWS (Amazon Web Services) wasn’t even a thing.  By the time I became MD at Peer 1, AWS had emerged and changed the hosting market completely.  So, any strategy needs to allow for the changing way your customers might solve their jobs to be done. 

Try to stop looking from the perspective of the widgets you supply. You need to think more about the unique value you can offer your customers to solve their problems.  It might be how you niche or package your solution or even how you deliver it through partners.  Whatever it is, you need a unique value proposition that underpins willingness to pay.  And your strategy should explore how you sustain this advantage or unique value over time.  It needs to be ring-fenced and grown to its fullest potential.

Beware of casting your net too widely – it’s all too common to see this.  We ask potential clients who their customers are, and they say, ‘Anyone with a pulse with money to spend.’  Big mistake! I saw an Instagram ad for a Danish sportswear brand the other day.  The gist of their message? Whether you’re a professional athlete or have just hauled yourself off the couch, we’ve got something for you—a massive face-palm moment. I’m not interested in wearing the same socks as some lardy bloke who gets out of breath running around the park.  Now, if the ad had told me that four out of five professional Danish marathon runners wear their brand… quite different entirely, suddenly their brand becomes aspirational. And I’m interested in buying.

Put together a strategy sub-team

Strategy is hard.  Friggin’ hard.  That’s why business leaders often shy away from spending much time on it.  It’s easier to get lost in the day-to-day busyness of your company rather than stepping back and thinking. Not everyone in your leadership team will have the right strengths for strategy work.  We use Patrick Lencioni’s Working Genius tool to get a handle on who’s in the right seat on a leadership team. Some people are more than happy at 30,000 feet.  These are the ones who will thrive at strategy.  Others get twitchy when they go over 500 feet. 

So don’t see strategy as a whole team sport.  Pull together a small subset of your best strategic thinkers to ponder the status quo and work on new ideas and priorities.  Weekly strategy sessions are practical – Jim Collins found these alive and well in all the great companies identified in his book, ‘Good To Great’ (a must-read for anyone looking to grow their business). 

Identify the key capabilities of your business

Use an Activity Fit Map to determine your business’s three to five key capabilities.  These are the strategic pillars on which you will build the future.

In a recent podcast episode, I spoke with Alex Smith, exploring the nuances of formulating effective business strategies and the development of a compelling value proposition. We dissected the approach of industry innovators like Tesla, underscoring the importance of authenticity and solid internal team dynamics in driving strategic success. This conversation is a treasure trove for leaders seeking to align their offerings with market demands and customer expectations, offering deep insights into creating differentiated value propositions. For detailed insights, explore the full discussion here.

Through a process of Value Chain Analysis, you can work through each of these pillars.  Let’s say you’re a service business, and you’ve identified ‘People’ as one of the pillars.  So, what unique activities can you see in HR that support this?  Are you recruiting differently from your competitors?  Is your retention rate the best in the industry?  Have you done something different with your cost base?  Or have you off-shored some elements of your delivery without negative consequences for customer satisfaction?  If ‘People’ is genuinely one of your capability pillars, there needs to be evidence in your Activity Fit Map.  It won’t be a strategic differentiator if you see nothing unique there.  Just because it’s best practice doesn’t mean it’s better. 

Look for unique activities, and then make sure your strategy doubles down on these over the next three years, strengthening them by leveraging their unique attributes. 

In this way, your Value Chain Analysis and Activity Fit Map will identify which functions in your business create sustainable competitive advantage around these three to five capabilities.  It will give you a framework.  And a way of thinking that you’ve never had before.  Suddenly, you’ll focus only on the things that support your strategic position and nothing else. 

Make a plan around one key metric

Finally, work out the key metric to drive your strategy forward.  Also known as ‘profit per X’, this metric has the most significant and most sustainable impact on your economic engine.  Then, build a plan around this metric. 

Pep Guardiola would never have been successful as Bayern Munich and Man City manager without his relentless drive to improve possession. Time on the ball was his crucial leading metric. He envisioned taking the team from mid-table mediocrity to the Premier League Championship.  And his plan was meticulous, even down to the length of grass on the pitch.  Find the same attention to detail and focus on the things that drive improvement, and you’ll break new ground for your business in 2024.

Written by business coach and CEO mentor Dominic Monkhouse, read more of his work here. Read his new book, Mind Your F**king Business here.