I teach strategy as my day job. I also have the privilege or working with 500+ students, professionals, grinders, learners, athletes, performers, and winners. So yes, I am blessed. During my conversations, I often find myself relating strategy concepts to career conversations.
Strategy is about competitive advantage
When you think of great companies, they are good at what they do. Not FOMO – they are NOT focused on being like someone else. Nike is Nike. Lululemon is Lululemon. Costco is not Walmart. Shein is not the Gap.
Strategy is difficult. In fact, did you know that the majority of publicly-traded companies in the United States actually lose money? Yes, it’s true, making money is difficult. So when we think about our own careers, the same advice of “don’t be average” also holds true.
- Which strategy frameworks could apply to our careers?
- What are ways to think about our own strategic positioning?
- What does winning look like for us? Where to compete? How to win?
1) Strategy = winning. What does winning look like for me?
Winning seems like such a divisive word. After all, does that mean you should be focused on your competition? No, strategy is about creating massive value to customers who love you and are willing to pay. Strategy means succeeding in the area of your choosing – whether teaching, construction, fundraising, non-profits, or tennis – in a sustainably competitive way. It’s winning long-term. It’s winning – defined by you, not by others. As the fabled Lewis Carroll quote is reported to go, “If you don’t know where you are going, any road will get you there.”
2) Differentiation: What is my unfair advantage?
How can you compete differently? What’s your edge? Why are you unique and different from the 20 people who have the same education, experience, and skills? Don’t be a commodity. How can you be a price-setter vs. a price-taker? How do you offer something that is truly premium? What is your unfair advantage?
3) VRIO: What are my strategically valuable resources?
Any gourmet meal is made up of 3 things: great ingredients, great recipe, and a great chef. What are the ingredients that you have in your life? Do you speak 3 languages? Do you have deep relationships with influential people who can make things happen? Do you have proprietary access to information, resources, or customers? What do you have that is VRIO (super valuable to you and your customers) (rare) (difficult to copy) (solely owned and control by you)?
Action: Make a list of your great resources (people, assets, skills, experiences, relationships). How to get more of that? How to best use what you have? How to create an inventory of art, music, words, ideas that are attributable to you. How to create large data sets of your own thinking, to eventually train machine learning on? How be your own asset?
4) Learning curve: How I learn faster than others?
The learning curve is simply, “learning by doing.” What can you practice MORE than other people, and get more productive. Namely, what are you willing to grit-it-out, and hustle like an immigrant’s kid? You have the willingness to do the work. You have the ability to get smart quickly. Your ambition to practice through the pain. You want to learn where it’s easiest for you and difficult for others. You want people to have FOMO on you, in the areas where you do great work.
What are you willing to spend 3 years getting “wicked” good at? What would you like to be the best 10% in the world at? What is the combination ( A + B + C ) that you can dedicate time to? How can you mix/match those things to be truly unique, and difficult to copy? Where can put in your 10,000 hours of deliberate practice?
Early in your career, the goal is to learn a lot of valuable things, and develop long-term relationships with awesome people. Sure, the money is important. . but a difference of 5% in your starting salary is a rounding error compared to the importance of the right manager, right work environment, and runway to really gain some career speed. As Eric Schmidt – ex CEO of Google said paraphrased, “When you’re getting on a rocket ship, don’t ask which seat.” Basically, get on board, do the work, and enjoy.
5) Corporate strategy: Where do I want to play?
If you’re reading this post, you are blessed. You are educated, have resources, have time (to read this blog), have access to high-speed internet, have the patience to slog through this writing, and care about your future. You’re already ahead of the game. This also means that you have choices: X, Y, or Z.
What is the industry that you want to be in? What captivates your attention? Where is the greatest growth? What kind of problems do you want to solve? What clients and customers are the most interesting for you? What things do you like to do (that other people don’t like to do), that customers are willing to pay for? What do you find yourself geeking out on a Saturday night in front of your computer? What do people compliment you about?
6) Cost leadership: Where can I scale myself?
There is only one of you. Got it.
What scales? How can you automate your most boring and routine tasks? Where can you delegate to others who a) want to learn from you b) will do a good job c) cheaper than your billable rate? What are ways that better processes will save you time? How can you use ChatGPT or any technology solution to lower your cost-to-serve? If you were to guess, what parts of your job will the robot take over in 10 years? Get that crap off your plate.
7) Set of activities: How can I create flywheel with my work, career?
Great companies have “flywheels” (think: Jim Collins) which gain momentum over time. It takes times to get going, but once it starts spinning, it’s difficult for competitors to catch up. What is one good thing you have that leads to another good thing, which leads to another good thing. If your activities were a set of metaphorical dominoes, what is the first domino that we need to knock over? What is the one thing?
If you had a magic wand, what are 2-3 things in your professional life that you would like to see compound at a 24% CAGR (compounding every 3 years)? What parts of your virtuous cycle do you want bigger, stronger? How do we get your flywheel rolling, one things – pushing another thing – round and round?
8) Customer acquisition costs: Is it easy to buy me?
Marketing is making it easy for people to buy you. Think of a cereal box at the grocery store. The front has pictures and clearly displays what’s inside the box. What about your resume, is it clear? What about your website? Is it a list of buzz words and jargon? Namely, what do you do? Can you show people your work?
Have I found customers and clients who have a massive willingness-to-pay. Do I enjoy working with them and for them? Am I marketing myself well? Do people know what I do? Can I explain my value to other people simply? Do I have a portfolio of work that people can “try before they buy?” Are there testimonials for my great work? Am I credible? Are my existing clients referring me to their sister business units, and friends?
9) Cross-selling: Do clients want to buy more?
What does your product / service portfolio look like? What is currently on your shelves? Is it one item or two? Does it make sense for your clients to buy more from you? Can you cross-sell what you have to more people? What are the complements that support your core business? Can you co-create that with your clients? Do you know your customers’ future needs? Do you have enough of your clients’ trust that they confide in you?
Maybe it’s time to experiment. It is the creator economy. There is 300 hours of video uploaded to YouTube every second. You can self-publish on Amazon. You like music, you think you have skills? Share your music on Spotify. It’s never been easier to express yourself and find your 1,000 true fans. The most famous influencer in China sold a $1 Billion (yes, billion with a B) of product in 1 day.
10) Trade offs: What are you saying “no” to?
Would you go to a restaurant that served Italian pasta + Japanese sushi + Spanish paella + New England chowder + Vegan Tempe + Chicago deep dish pizza + Indian butter chicken? Probably not because . . .it would taste boring and awful. We can’t be all things to all people. It’s hard enough to be good at 1-2 things.
So the question is, what are your spending / wasting your time on that is not core to your business? What are the 80% of activities that ARE NOT driving real profits, strategic advantage, fun, and growth? What is holding you back?
It doesn’t pay to be a walking generality.
11) Business model: How are you making money?
There are a dozen of ways for clients to pay you for the value (aka goodness) you provide: a) one time sale b) subscription c) advertising d) freemium e) franchising / royalty f) pay as you go. Different ways to get paid.
Cash Flow Quadrant by Robert Kiyosaki (1998) is a great book about passive income. Are you an employee, self-employed, a business owner, or an investor? All can be good, and yes, you should probably be all four of them.
Wealth comes from the balance sheet. A = L + E. How can you get more E?
12) Leverage: How are you getting benefits of scale?
Business is a tug of war, a wrestling match. If you have one big supplier who you depend on for your key ingredients, uh oh. If you are in an industry where it’s easy to copy what you do, uh oh. Trouble brewing.
Who is giving you the hardest time to make profits? Are your suppliers raising prices, giving you lower quality, or making excuses for delivery times? Or is it customers who are continually asking for discounts, returning products, and generally asking for too much and paying too little? They are also threatening your profitability. There is WAY more competition than your direct rivals. Think about substitutes.
So, what are you doing about it? Are you getting economies of scale (benefits of being big) so that your unit costs are going down? Are there investments you should make now because it will help you lower your costs in the future? Are you creating an economic moat? (#19) How can you throw your weight around?
13) Best practices: What are the 3 things you HAVE to do?
Best practices are typically common practices because everyone does it. These are table stakes. They are an entry-fee to compete AND they have to be done. Will a clean kitchen guarantee that your restaurant will succeed? No. However, will a unsanitary kitchen eventually put you out of business? Yes.
What are the best practices (minimum standard) that you need to play in your business? Get there immediately. Sometimes this means outsourcing the things that are not core to your business; as Jeff Bezos once said at a Y combinator talk, “Focus on the things that make your beer better.”
14) Strategic planning: What will the next 12 months look like?
What does your personal career plan look like? What do you plan on getting done? What are your priorities? Whose help do you need? What will revenues and costs look like? What are the assumptions? Dependencies? What are the due dates and deliverables? How did last year go?
There are dozens of free strategic planning templates online. Planning is not perfect because it overly focuses on inputs, costs, and things that look like last year’s business, but it’s still useful. As Eleanor Roosevelt said, “It takes as much energy to wish as it does to plan.” BOOM.
15) Scenario planning: What if it doesn’t work?
I am an generally an optimist because it’s the rationale thing to do. Why be negative about the future, when we have so many resources, friends, knowledge, tools, and ambition. And yet, can we agree that things don’t always go how you hoped. Clients change their minds. A great manager leaves. Interest rates go up 13 times.
What are the 3 biggest assumptions in your annual plan? What if 1 or 2 or 3 of those “go south?” What will you do then? How will you know in advance (think: leading indicators) that it’s a problem? Do you have enough time, cash, emotional margin to get through a tough spot? How much pain/losses are you willing to take before quitting? In business, success, life; it’s more like poker than chess. Different cards, players, luck.
16) Emerging strategy: are you open to serendipity?
Success = good decisions + luck. In 2020, 99%+ of all strategy departments were wrong because they could not imagine that 7 billion people would be locked in their rooms because of COVID-19. So, it requires a certain amount of flexibility and willingness to stay open-minded. When is the last time someone brought you an idea, and you put it into action? How tightly are you holding the reins on the work? Are you creating enough trust and margin in your teams, so that people can express themselves, and help the team win?
Command and control is over-rated; it’s also exhausting.
17) Strategic inflection point: When do you need to change your strategy?
Strategy is difficult because a) it’s important that you are persistent enough to get the fruits of your labor. Building an enduring company takes patience. As Jeff Bezos said, “every overnight success took 10 years to build” AND, b) it’s equally important to pivot at the right time. As Jack Welch said, “change before you have to.”
This enormously difficult to do. Intel smartly pivoted out of memory chips into CPUs (yeah), yet missed a) the low-power phone applications chip market (think: ARM), GPU (think: Nvidia), and foundry (think: TSMC).
18) Board of directors: Who is keeping you honest?
We all have blind-spots. I can think of 10+ leaders who really failed in some part of their lives because of hubris. They were just surrounded by sychophants who just said “yes” all the time. They could not get the truth. As the office manager in the UK-version of the Office thought, “if you become a leader, your jokes get funnier.”
Remember when you were dating someone and all your friends were advising against it AND they were right? That’s cautionary. Have a set of people around you who will keep your clear-eyed and not stupid.
19) Economic moat: What is protecting my economic castle?
If you have been reasonably successful, then you’re profitable, and things are going well. Inevitably, that will also attract others who want a piece of that profitable pie. What barriers to entry do you have?
- Network effects
- Customer loyalty
- High start-up costs
- Slow learning curve
- Proprietary patents
Namely, what is preventing others from jumping into your party and taking your customers? As Warren Buffett said, “I look for economic castles surrounded by unbreachable moats.”
20) Time frame: When does this all need to be done?
Strategy doesn’t have a lot of meaning without a due date. Are you looking for a 2-3 year solution set, or are we talking about your career, and practice? We need to be realistic. After all, a) most businesses fail b) those that do succeed, really start to break-even in years 3-5 because there are fixed costs and it takes time to get customers; you need to drive awareness, interest, and consideration, before you even sell one product.
Strategy = being long-term greedy. Strategy = taking the time to build up the business.
21) Risk tolerance: What’s your beta?
What’s the best investment class? It depends. How much risk do you want to take on? Are you in your early 20s with enough money, and financial safety net to take some risks? Or are you a married parent with 2 kids and one on the way? Any career strategy needs to be in the context of your life stage, obligations, and risk preferences.
Not sure about all these questions?
Don’t worry, me neither. We are all a work-in-progress. As practitioners, we are growing, learning, and having fun. The world is changing (think: opportunities for non-incumbents). Our customers change (think: more work, and a chance to wow the client). Listen – paying customers come first.
Kaizen yourself
Continuous improvement is not just a manufacturing idea. It’s a noble and worthy thing for ourselves. Strategy is long-term. Your career is long-term. Your life is long-term. Keep asking yourself great questions. Enjoy now. Enjoy the journey, be so good they can’t ignore you.
Want more strategy?
100 smart things my strategy students said here.
JK
