strategic focus

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In order to lead the business to its greatest competitive advantage, there must be a mechanism to focus the organization on what it will do best and keep it from getting distracted by other opportunities that come along. This mechanism it the strategic focus of the business.

The strategic focus it that intersection of three key elements of the business model:

  1. The organization's passion -- its compelling purpose composed of values, mission, vision, and goals which inspire and motivate the members of the organization,
  2. the value proposition of the business -- what the customer values in the offerings and rewards the organization for doing, and
  3. a distinctive competency -- what the organization can be best in the world at .

Though an organization can operate without this strategic focus, there is strong evidence to indicate that organizations that develop and have the discipline to adhere to a strategic focus have a significant long-term competitive advantage.

Note: Over 70% of companies producing persistent superior economic performance over 20 years or more were one business companies. (Wiggins, 2002).

Strategic focus and systems theory --
The four systems aspects are purpose, function, process, and structure. The strategic focus ties to three of these - passion ties to the purpose aspect, the value proposition to the function within the environment of the organization aspect, and the distinctive competency with the process aspect. The reason there is not an element of strategic focus related to structure is because structure answers ""how"" questions, while the purpose, function, and process are essentially ""what"" questions - at least as related to the strategic focus. In strategy development, ""how"" follows from ""what.""

Strategic focus and related concepts --

Strategic focus is systems view that is consistent with several similar concepts - Peter Drucker's theory of business, Gary Hamel and C.K. Prahalad's strategic intent, Jim Collin's Hedgehog Concept, and Michael Porter's fit and position, each of which have their similarities in principle and unique perspectives and focuses.

Strategic focus and the theory of business --
The strategic focus is essentially the same as Drucker's theory of business:

  1. Assumptions about the specific mission of the organization, what it considers meaningful results - its vision, mission, passion.
  2. Assumptions about the environment of the organization, which define what an organization gets paid for - its value proposition.
  3. Assumptions about the core competencies needed to accomplish the organization's mission - defines what the organization needs as a distinctive competency, what they can be the best in the world at doing.

Strategic focus and strategic intent --
Hamel and Prahalad's strategic intent focuses on the intended result of adopting a strategic focus, creating an extreme gap between resources and ambitions (as expressed in the mission and vision), where this gap can only be closed by systematically building new advantageous capabilities. What they describe as folding the future back into the present provides the guiding direction and inspiration to the members of the organization. The gap defined by strategic intent analogous to the BHAG in Collin's Hedgehog Concept.

Strategic focus and Hedgehog Concept --
Collins' Hedgehog Concept is very similar. With this concept, the value proposition of the strategic focus is expressed as ""What drives your economic engine -- the piercing insight of the single denominator -- profit per x -- that has the greatest positive impact on the economics of the business"", which is value proposition take to the level of strategic competitive advantage.

Strategic focus and fit and position --
Michael Porter's fit and position addresses the importance of consistency in strategic positions which enable the growth of competencies tailored to a strategy and reinforces the identity of the organization and its members, which brings in and retains the people dedicated to the organization's mission.

Collectively, these different views of the basic essentials of strategy, enrich our understanding of strategic focus.

Keeping a strategic focus current -

  • Abandonment: Whatever you are doing, selling, making, etc. NOW, would you go into it if you had to create it NOW.
    • Test assumptions, if not...
      • figure out why not
      • which resources can be redirected if the current theory (strategic focus) is abandoned
  • Study: Outside the business and non-customers. Fundamental change rarely shows itself first in your organization or your customers.
  • Indicators the strategic focus is no longer valid
    • If your organization attains its original objectives, its theory of business is obsolete.
    • Rapid growth (e.g. 3x in size quickly) invalidates the theory
    • Unexpected success, yours or competitor's
    • Unexpected failure, yours or competitor's
  • Development or restoration of a strategic focus
    • Hard systematic work, not genius - insight will come from the hard work
    • Being conscientious, not clever
    • Dealing with the brutal facts about organization values, vision, competencies, and offering value
    • Decisive action

Strategic focus and innovation --
Innovation is critical to an organization's ability to achieve and sustain a competitive advantage. The strategic focus serves to energize innovation. Thus it falls into the category of 'liberating rules.' A purely blank slate for innovation is generally de-energizes an organization's innovation because it lacks guidance and inspirational power. Having the passionate purpose, the functional need of the business by its environment, and the current core and distinctive competency serves to guide, motivate, and inspire the innovation needed to achieve and sustain a competitive advantage.

See path dependence, a concept related to consistency of strategic focus.

See authenticity, a key factor in the development of a strategic focus.