Strategy and analytics go hand-in-hand. Throughout my agency life over the past 10+ years, I have been very fortunate to have worked with many great strategists. It was a valuable experience to work with people from different backgrounds. The collaboration was amazing.
However, sometimes I feel a bit puzzled when people tell me they are developing a strategy. I have seen many great presentations about ‘strategy’ filled with fancy diagrams and big words. Everyone was excited about the presentation, but not much happened afterwards.
‘Strategy’ seems like a good word to use to make people think that what you are proposing is very intelligent. However, this word is often misused by people who are not clear on what it means.
For instance, one time we were pitching a project to a big client. Our regional strategy person provided a few slides explaining ‘what we want people to talk about’ and he closed with a big tagline that said something like “Get ready for a great performance.” The tagline sounded great, but a tagline is a creative idea, not a strategy. The real question is this: How can you translate the tagline into an action plan that gets people talking about it?
Another time, I was at a pitch for a multinational B2B chemical company with another creative agency. Its social media strategy in China is creating fan pages on RenRen. That might be an effective B2C strategy. And there may be some cases where it will work as a B2C strategy. But will the target audience, such as purchasing managers, go to RenRen and become a fan of a well-known chemical supplier? And even if they do, what impact, if any, will such a strategy have on the company?
Sometimes, when I see such ideas pitched as strategies, I confess I have to chuckle.
What are the differences between a great strategist and a great speaker? How can you tell if a proposed strategy is effective or not?
I always set some important definitions first:
- Objective – WHAT you want to accomplish
- Strategy – HOW you intend to achieve the objective
- Tactic – WHAT actions, tools, and techniques you will use
Developing a strategy is like building a road. The destination is what you want to accomplish. Strategy is your direction or how you are going to get from your starting point to your destination. Tactic is your vehicle or, in this case, what activities will take you there. Although it sounds very straightforward, many people often confuse tactic with strategy.
In addition to properly developing a strategy, the strategy itself should come together with customer insights, actions, and business impact.
The following are three basic questions I always ask when discussing strategy:
- What is your strategy based on? What data, information, or customer insights are you using to develop your strategy?
- Can you translate your strategy into a tactical plan?
- What will the business impact of your strategy be?
Although it is not necessary to have the perfect answer to these questions at the beginning, the questions should be asked and, ideally, answers should be formulated to ensure the strategy is delivering value for the business.
Ultimately, the key difference between an effective strategy and an ineffective strategy is the ROI impact, not the PowerPoint presentation. Effective strategies should include accountability. In addition, they have to be measurable. Identifying the key metrics and setting up the right key performance indicators (KPI) to measure the ROI and business goals is the key to developing an effective strategy. Conversely, the biggest mistake I have seen when it comes to developing strategies is setting the wrong KPIs. Setting the wrong KPIs will lead to the development of an ineffective strategy.
There is still more one needs to do to further optimise the strategy and sharpen your performance in today’s agile business world. However, we should always focus on the basics first.
Since a picture is worth a thousand words, I borrowed a diagram from Jim Speelmon, one of the greatest strategists I have worked with. (He and I conducted a digital workshop together last month.)
The diagram summarises the important points that I have mentioned. It shows you that, when you are developing a strategy, you must begin with your target audience and business objectives first. Then you develop your strategy to give your target audience the reasons why they should buy into what you are selling and plan their activities accordingly. It is important to keep key metrics and goals or objectives in mind, so that the KPIs and key metrics will be set accordingly.
This diagram is a useful reality check tool to ensures the strategy development is heading in the right direction – taking your business down the road you want to travel so you can reach your destination.