Thursday, February 15, 2007

New Strategic Planning Exercise - Refining Your Strategic Competencies

One of the most exciting strategic planning concepts developed in the past ten years is strategic competency. While this term is probably over-used and mis-used, it is a very powerful tool when used properly. Remember that a strategic competency is a combination of skills, processes and knowledge that creates significant value for your customers and differentiates you from your competition. I have yet to see an example of a company that has been wildly successful using more than one strategic competency. That's right, you only get one, so choose wisely.

Some decent, well-known examples of strategic competencies are Disney (family entertainment), Honda (small engines) and Starbucks (high-end coffee experience). If you'd like to hear more about this concept, please refer to Simplified Strategic Planning or comment here, and I'll post more.

A client I've worked with for some time wanted to create a more focused strategic competency than the one they have been using for two years.

Rising to this challenge, I asked the team to think of 3 different types of customers:

1. A customer who loves us and would never leave for a competitor
2. A customer who has left us for a competitor and come back
3. A customer we would be better off losing to a competitor

I then asked : Why do the customers in 1 and 2 love us? What is their main reason for preferring us? What to they tell us about ourselves?

Following this, I also asked the team to think about what customer 3 was really looking for that doesn't mesh with who we are.

I expected answers to be all over the map. I was astonished at how consistently the answers reflected the value of the personal relationships that customers have with this client.
If you have already figured out a strategic competency but are uncomfortable with it for any reason, I strongly recommend you add this exercise to your strategic planning - you may find that it really helps refine the competency to something much more unique and valuable!

I'd love to hear from anyone who is using strategic competency as a central part of their strategic planning process also - both failures and successes are grist for the mill of learning, so please share!

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