What is this "Strategy" that gets used so often? - ManagePro #8
Hello!
I am Tsuboi (@tsubot0905), an HR Business Partner at DeNA.
This is the 8th installment of "ManagePro," a note exploring the evolution of management.
In this ManagePro note series, I strive for a simple structure that can be easily learned in 5 minutes, and content that focuses on questions that are easy to synchronize with and use in communication with others.
Well, starting from this issue, we begin the ManagePro Strategy Edition of our series. How to reflect strategy into management to achieve expected results is an important theme.
Also, there are more people who use strategy than those who create it.
With that in mind, in the ManagePro Strategy Edition, I would like to deliver ideas and content that those who use strategy can refer to, such as:
・How to face strategy?
・How to utilize strategy?
as well as other concepts.
The theme for this time starts with "What is strategy?"
Here is the table of contents!
<To be able to use strategy>
I feel that when reading management books and articles, the expression "strategy" tends to appear in everything. Things like "XX Strategy" or "Strategic XX."
Just by adding "strategy," it can give the impression that you are thinking deeply or doing something amazing, so perhaps it is used too easily...
So, what exactly is "strategy"?
I suspect many people cannot answer when asked this again. If you find yourself stuck for an answer, the strategy you are talking about might not actually be a strategy.
Therefore, let's first reconfirm the meaning of the word "strategy."
By increasing the resolution and understanding of "strategy," the feasibility of your strategy should increase significantly. (As I mentioned in ManagePro #2, one of the functions of management was to realize strategy, right?)
<What is strategy?>
It is said that Chester Barnard, the author of "The Functions of the Executive (1938)," brought the word strategy, which is a military term, into the world of management.
To decipher the meaning of the word from the history of strategy, I looked up the definition of strategy on Wikipedia.
It had various things written, but in the middle of the explanation, it said:
The definition of strategy is extremely diverse, and it is difficult to state it unconditionally.
That one sentence was written...
Since even Wikipedia finds it difficult to explain, it makes me realize once again that strategy is a difficult concept. (By the way, if you look up the definition of business strategy, it is a term that refers to an organization's medium- to long-term policies and plans.)
Suddenly, regarding this difficult-to-define strategy,
"What is strategy?"
how would you answer if a middle or high school student asked you that?
It is difficult for middle and high school students to understand if you explain it by listing words like management policy, external environment, competitive advantage, resource allocation, business plan, value proposition, differentiation, and business model.
If I were to express strategy simply, I would say,
Strategy is an "equation for winning".
However, even though I call it an equation, there is no "correct answer."
I mentioned in Management Pro #1 that "there is no right answer in management," and the same applies to strategy.
It is not about a right answer, but rather thatit is important for strategy to pursue a best answer with the intention of "This is how we will win!" to create an equation for victory.
<Addition, Subtraction, and Multiplication of Strategy>
Since I compared strategy to an equation, I will convey the image of thinking using +, -, and ×.
First, multiplication. This is the idea of "What should I multiply by what I am currently doing or can do to win?"
An easy-to-understand example is the "Ore no..." series from
Ore no Corporation.
In the autumn of 2012, Ore no Corporation opened the first "Ore no Italian" store in Shimbashi, which became a nationwide topic for allowing people to eat dishes using plenty of high-end ingredients at exceptional prices, and it instantly joined the ranks of popular restaurants.
It became a thriving business by multiplying "Michelin-starred chefs" × "1/3 the price of high-end restaurants" × "3 or more turnovers per day," and it is expanding its business by applying this winning pattern to formats other than Italian. Next, addition. This is the idea of "What should I add to what I am currently doing or can do to win?" You could also think of it as "What should I build up?" For example,
GE
CEO Jack Welch pursued a strategy of selection and concentration with the stance of "only doing businesses that can become number one or two in the world in market share." As a result, GE's organizational reform was successful, and the trust that "all products made by GE are top-notch" was built up, leading Jack Welch to be called the "greatest manager of the 20th century."
Finally, subtraction. This is the idea of "What should I subtract to win?" or "What should I not do?" from what I am currently doing or can do.
An easy-to-understand example isTwitter. They have continued to provide a service with a restriction that you cannot tweet more than 140 characters. As you know, this has led to the winning factor of the service being its ease of posting and its active nature. In this way, using +, -, and × to
conceive a scenario where our business wins = strategy is my personal theory.
<Interpretation of the Strategy Equation>
Based on what I have said so far, here is an illustration of the interpretation of strategy.
・Output: Embodiment of the target results. Output requires showing the standards by which you want to succeed as a business or organization.By showing the target output over a set medium- to long-term period, a goal is created.
By setting a goal for output, it becomes possible to calculate backward from the goal, which has a major impact on organizational decision-making and priorities.
・Throughput: A combination of key items
The word "strategy" contains two hidden processes of "abbreviation" (ryaku). These are "conquest" (koryaku) and "omission" (shoryaku).
"Conquest" is the offensive activity of increasing the probability of business success, while "omission" is the act of achieving business results with less effort.
In throughput, we ask, "How will you conquer and omit in your business?"From there, we define key items and combine them to conceive our company's way of winning.
Conceive the output and throughput of your strategy to visualize the equation for winning. If you can do this,the resolution of your strategy will increase, and the HOW used to execute the strategy will become easier to implement.should be.
In the next chapter,
as an easy-to-understand example of a winning equation,
I would like to touch upon Yoshinoya.
<Case Study: Yoshinoya's Winning Equation>
Based on information from Yoshinoya's website, I have created Yoshinoya's winning equation.
Realizing the No. 1 service in dining out = Tasty x Affordable x Fast
I will explain these one by one.
・Realizing the No. 1 service in dining out
We emphasize "customer count" as an absolute barometer of support from our customers. Customer count is an indicator of how well we are accepted in the market, and an increase in customer count represents an increase in customer support.
Source:Yoshinoya Website
This clearly shows that Yoshinoya's standard for aiming to be No. 1 in dining out emphasizes "customer count."
・Tasty x Affordable x Fast
While our commitment to the three elements of "tasty, affordable, and fast" remains unchanged, their priority, ratio, and content have changed according to the market. We must continue to change them in the future as well. However, it remains unchanged that "tasty" will continue to be the top priority. This is because "tasty" is the lifeline of our competitiveness.
Source: Same as above
The deciding factor for competitiveness is "product quality," and this clearly shows that Yoshinoya places the highest importance on "taste."
By the way, in the past, "fast" was the top priority. "Fast" seemed to be conscious not only of the speed of serving products but also of customer turnover.
I have heard that they were inspired by F1 pit stops, and to ensure customers could leave immediately after eating, the counter chairs were made at a height where feet do not touch the ground, making it difficult to stay for a long time. This is an example of store development directly linked to business, rather than just a conceptual slogan.
Also, by the way, IBM apparently had a period with the same concept as Yoshinoya,"Better x Faster x Cheaper."It is interesting that the equations are the same despite having different business models. And for some reason, it is strange how it sounds cooler in English (laughs).
<Positioning of Strategy>
Finally, I will explain how strategy is positioned in relation to the previous Management Professional topics.
In the previous Management Professional (part 7), we discussed the two functions and four areas of management, as well as corporate philosophy using MVV as a starting point.
Corporate philosophy is the most important high-level concept in a company. In terms of positioning, it is above strategy.
Strategy is influenced not only by corporate philosophy but also by the external environment and internal resources. While it is centered on the way of being that you want to cherish—the corporate philosophy—it is something that changes based on suitability considering the external environment and feasibility considering internal resources.
Furthermore, the overall strategy as a company needs to be linked to the four management areas of 'business, organization, operations, and human resources' and incorporated into each activity.
To summarize this, we can say that strategy is positioned to connect corporate philosophy with the four management areas.
Here is what it looks like in a diagram.
When using the company or business as the subject,
・The way of being you want to cherish is the philosophy
・The way of doing things you want to succeed is the strategy
It is good to remember it with this positioning!
Corporate philosophy was something that could be used when making decisions with your heart, but
I think strategy is something that can be used when making decisions with your head.
When the way of doing things succeeds, wins accumulate, and
the value that brings you closer to your ideal way of being also accumulates.
From winning to value is what this means.
<Questions for this time>
That is the content I wanted to deliver in the 8th Management Professional!
How was it?
So, here is the final question, a staple of Management Professional.
Through this theme, I have selected four questions I would like to ask leaders and managers. I hope this helps organize the thoughts of you busy people and encourages new actions!
*I would be happy if you could tweet your thoughts, such as 'This is what I think' or 'This is what I would ask,' on Twitter with the hashtag #ManagementProfessional!
<Looking ahead to next time>
How to reflect strategy into management and create change toward expected results is an important theme.
And when you explore this theme and consider it from the history and trends of strategy, you will encounter the topic of organizational theory. Therefore, the next Management Professional will be about Strategy and Organization.
The next one will be in two weeks on Wednesday.
If you like, please give this note a 'like' or follow me.
Thank you for reading to the end this time as well!
It would be my greatest pleasure to explore the evolution of management together with you, the readers.Follows and retweets on Twitter are very welcome! Please feel free to send your thoughts via DM as well! (@tsubot0905)
By receiving your own theories and new perspectives on the topics covered in this note, our exploration of management should become even more enjoyable. Therefore, I look forward to your reactions. Thank you for your support!