BY SCOTT EDINGER8 MINUTE READ
Throughout history, flags have been used to communicate. They communicate boundaries, rules, directions, targets, and so forth. When everyone playing and watching understands what they are for, the flags—like any other form of communication—create a shared understanding. Think of the flags used today in the sport of auto racing. They are clear, emphatic communication devices about action and direction. Whether it’s Le Mans or the Indy 500, an auto race is all about moving toward a desired strategic result—namely, victory as defined by being the first to cross the finish line at the end of the race. Of course, before you can achieve any result, you must start. The start of an auto race is usually signaled by a green flag. You don’t have to be a professional racer to know that green means Go.
In business, there is a similarly simple and direct yet richly meaningful set of communications to signal leaders at every level in a business that their strategy is ready to be executed—or not yet ready, as the case may be. This signal should get everybody started, together, headed in the same direction, moving toward the same strategic goals and at the right time.
But guiding the creation, launch, and execution of a business strategy is more complex than starting an auto race. A single flag won’t do the job, so I’ve divided the message into five. These five flags each signal that one aspect of a growth-focused strategy is both executable and ready for execution. To get the race moving, you need a five-flag start.
FLAG 1: WHAT DEFINES SUCCESS?
If you and your employees don’t know what it means to be successful, you have no way to guarantee you’ll get there—or even that you’re driving in the same direction. Success is the ultimate results of your strategy, the highest-level goals. What does that look like for your company? If what your team does brings that objective closer, they are succeeding. Your definition of success must be clear, unambiguous, and emphatic. Its message must be universally understood within the organization. It needs to convey the first element in so many familiar strategy models: a compelling objective.
FLAG 2: WHAT IS YOUR POWER PLAY?
What do you have, what can you offer, and what can you do that others do not have, cannot offer, and cannot do? Or, at a minimum, what can you do better than others? What is your power play—your unfair competitive advantage?
What’s important about this is that a numerical advantage is a fact, not a claim and not an opinion. In your business, your power play must also be a fact-based advantage. It must be real and objectively or at least observably definable. For you as a CEO, the question that defines the power play is this: Why are consumers going to choose us in the face of competing alternatives that look similar or even the same? This isn’t a laundry list of every feature or benefit your company possesses. It’s an honest assessment of the reasons why customers choose you.
FLAG 3: WHO WILL VALUE YOUR POWER PLAY?
Know your customer! You! The CEO!
If just half of your revenues come from your target market or industry sector, you have identified a potential signal that your strategy isn’t getting translated into action. Your sales force is likely spending a great deal of time and effort making sales to customers that are not prioritized in your strategy and thus do not reflect the level of investment you have made with the intention of selling to those specific markets or industries. If sales is not creating value by making the right sales, they are wasting effort and tossing strategy to the wind.
Developing a full understanding of the health of your company’s revenue stream is crucial to your strategy and its execution. The revenue stream is complex and dynamic and is at the heart of growth. Influencing healthy growth requires strategic intervention at precisely the right points along that stream. But it does not require a detailed knowledge of the revenue stream to understand that 100% of that revenue comes from a single source: your customers. This simple fact is the ground truth of your business, and what that tells you is that you—specifically, you, the CEO—need to build a great customer experience.
Align your power play: the strategic customer.
Identify the kind of consumer who will value the millions—and in plenty of cases, billions—of dollars you have invested in your power play and is willing to pay a premium for it. This is the right customer, who fits your ideal profile and represents an opportunity to move beyond merely making a sale to creating a sustainable relationship. Depending on what your company offers in the market, there may be a range of strategic customer types or a handful of discrete categories of customers that are an excellent strategic fit for you. But it certainly won’t be everyone. The third flag requires the discipline to know what kind of customers to walk away from or, at least, to not heavily invest in. This is probably the most violated component of strategy.
Now, I’m not saying that every last penny of your revenue has to come from the ideal customer—far from it. You should absolutely be opportunistic about business when there are easy wins to be racked up. Even if the customer isn’t in your ideal profile or buying your most valued solutions, if the business is easy to acquire and easy for you to implement, take as much business as comes your way.
But those two criteria are very important if that business is to be truly opportunistic: It must be both easy to acquire and easy to implement. Companies get into trouble when one of these two criteria is missing.
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FLAG 4: HOW DOES OUR SALES EXPERIENCE CREATE VALUE?
“If only our account managers would do a better job of selling our value to customers!” the hands-off CEO complains. But having intentionally abdicated leadership of strategy to sales, this CEO misses a fuller or more complete understanding of “our value.” In a full strategic view, it won’t inhere exclusively in products and services. Rather, value must be based as much on customer relationships as it is on products and services. After all, it accounts for a quarter or more of the decision to do business with you. Approaching value in the customer relationship this way makes it scalable and, therefore, capable of more sustainably differentiating the company’s offerings and brand from those of its competitors.
Customers come to companies all the time with an idea of what they want to buy. But when there are multifaceted decisions to be made about the solution that is best for them or the way it would be most effectively implemented, the sales experience can help to drive better decisions, more effective implementations, and stronger customer outcomes and results.
Solution selling is one of the many synonyms of consultative selling. And every business in the market claims to sell solutions. But the truth is that a so-called solution is not really a solution until it solves something for a customer. That requires a direct connection to the outcomes that a customer wants to achieve—their objectives to be accomplished, their problems to be solved, their needs to be addressed—by buying your products and services and accessing your support. Until that is agreed upon with a customer, your solutions aren’t yet solutions.
A solution is not so much created by a strategically informed seller as it is cocreated by that seller and the customer in a mutual agreement about the business outcomes to be achieved. Such cocreation happens in one place and one place only: the sales experience. Sales calls that deliver such a sales experience are calls that a customer will pay for, and they will willingly pay for the experience again and again. Most of all, when you win the sales experience, everything else gets a little easier, from price negotiations to repeat business.
FLAG 5: WHERE MUST WE IMPROVE, BUILD, OR ACQUIRE TO EXECUTE OUR STRATEGY?
I found myself frustrated by something an executive once said to me. He had just been washed out as CEO by the board of directors because his transformation strategy failed to produce results. “Scott,” he muttered to me over breakfast, “I know we had a great strategy, but we failed with the sales team and execution.”
It reminded me of that old quip about the surgeon who delivers the bad news to an anxious family: “The operation was a success, but the patient died.” The idea that strategy can fail in execution but still be a great strategy is a fundamental misunderstanding of what strategy is. Prior to execution, any strategy is inert, nonliving. At most, it is a spore, encased in its shell. It comes to life and lives only in its implementation.
Any strategy that fails to include within itself the elements necessary for its own execution is a failed strategy. If the strategy of your enterprise does not include a direct line of sight from top leadership to the rest of the organization, and especially the sales organization, it is a failed strategy.
To execute your strategy, there are probably some things you do now that you need to be better at: selling, marketing, manufacturing, supply chain management, and so on. You have to improve the way you are doing these functions to compete the way this strategy says you will. And there are probably some things you need that you don’t have today. Maybe you need to develop innovative capabilities or services, modernize an approach for R&D, or establish management practices for growth. Maybe you need a new distribution channel like direct sales, resellers, or online sales. Or maybe you need systems to support scaling for growth, like enterprise resource planning or financial systems or CRM. And if you can’t build these things, you need to go get them. Buy them or partner with someone to deliver them.
