Real strategy is about saying “No”

by Sunny Bindra on September 7, 2009 · 6 comments

in Business Daily

“The very essence of having a strategy is being selective about choosing the criteria on which a firm wishes to compete, and then being creative and disciplined in designing an operation that is finely tuned to deliver those particular virtues.

…Strategy is deciding which business you are going to turn away.”

David Maister, Strategy & The Fat Smoker (2008)

David Maister’s new book is an excellent, down-to-earth and very readable guide to the fundamentals of what it means to have a strategy. It resonated deeply with me, and I will be exploring various aspects of it here in the weeks to come.

I have been shouting this on all the programmes I teach and all the clients I have advised over the years: Strategy is about making choices. No company can be all things to all customers. Unfortunately, many try. They become unfocused, expending valuable management time, energy and resources on the wrong things. The result is mere competence, not excellence.

Maister spells it out: you cannot achieve any strategic distinction until you learn to say “no” to certain customers and opportunities. Strategy devises superior delivery of benefits to customers – and you just can’t be superior on too many fronts.

The problem is that saying no is not easy. No matter what the strategy says, in most firms I know the pressure to meet short-term targets tends to overwhelm matters. CEOs are judged by the numbers they bring in, quarter by quarter, and they tend to get carried away in courting business in all directions. The sales force takes its cue from the boss, and if the message is “all business is good business”, soon the company will be lacking in any form of distinction. It is far better to choose your battlefields very, very carefully and then excel in them. Chasing every hare in the field is going to tire you out and ruin your distinctiveness.

There is also a psychological root to this behaviour. We all want to be liked by everyone, and end up trying to please many more people than we should. And saying ‘no’ makes us very insecure: we easily imagine the work may not turn up again.

Let me give a personal example. In the latter part of my consulting career, I took a decision that I would only take engagements where I work directly with the chief executive, and where I have that person’s passionate commitment. This was based on the realisation that projects that come from below rarely fly in Kenya. Senior managers can be very sincere and dedicated, but the CEO must be actively and visibly involved for anything to happen.

That has meant saying “no” to many a lucrative assignment, and it has not always been easy. We all want to be “good guys” and help people earnestly asking for that help. But I decided that the pressures on my time were such that saying “no” had to become a habit. As a result, I have succeeded in developing a brand that focuses on the things I really want to do. I have never regretted it.

At the end of the day, strategic focus is about leadership. Once the areas of distinctiveness are agreed, the CEO must ensure that there is little “mission creep” by saying “no” often and being seen to do so. No one can be committed to the strategy unless the leader is. Focus is also about measurement. If you regularly measure what proportion of business comes from on-strategy, targeted customers, you will be able to highlight the success or failure of your strategy.

If you never say “no” to new business, you simply don’t have a strategy. Opportunism and short-term profiteering may be lucrative, but they are never strategic.

Related posts:

  1. Don’t mistake your humdrum annual plan for your strategy
  2. Thinking deeply about strategy
  3. Repeat after me: Strategy is about difference
  4. The HR function must raise its game
  5. How your strategy can blind your company

{ 6 comments… read them below or add one }

1 Patricia September 7, 2009 at 4:37 pm

Good read.

Not too sure how well we can achieve this in the face of economic recession,where every penny coming our way seems to be only trickling in.

But surely,we must be seen to be trying.

Regards
Patricia

[Reply]

2 Sunny Bindra September 7, 2009 at 4:45 pm

Patricia:

The point is to have an intense focus on a target customer, and build an outstanding bond with that customer. That is what makes companies withstand recessions – when a customer feels the value is too good to forgo. Witness the companies that have been relatively unscathed in the West – Apple, Google, etc

It is when there is no strategic focus that every customer looks tempting.

[Reply]

3 Moses Kemibaro September 8, 2009 at 9:57 am

Sunny,

This was a powerful post! You have hit the proverbial nail on the head when it comes to strategic positioning of a service or brand. Saying “NO” I have learned in my own business is one of the hardest things to do!

[Reply]

4 Sunny Bindra September 8, 2009 at 10:12 am

Moses:

Indeed very hard. But must be done, otherwise we become a business for all-comers.

[Reply]

5 Jed September 9, 2009 at 7:13 pm

Sunny:

I would urge your readers to also read/remember similar posts in this column (apart from the ones listed after the piece) e.g.

-Nov 28 2004 “a focussed mind brings success”
-Jan 25 2008 “want to do more? do it one thing at a time”
-Jan 19 2009 “want to be truly execellent? practice! ”

Actually your message has been quite consistent

[Reply]

6 Sunny Bindra September 12, 2009 at 12:25 pm

Jed:

Thanks for pointing those out. Indeed something I consistently believe in.

[Reply]

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