Table of Contents
Conclusion and Recommendations
Not acting can keep you safe, but for an entrepreneur, business person, or anyone who wants to leave a legacy, the cost of that safety is too high.
Taking the âwrongâ action is temporary, and can help you find a path that feels ârightâ. While the fear feels real, the data you can collect from a failure can be extremely valuable to your later success.
A good strategy can limit the risk of an action feeling wrong and can set you up to learn from any failure. But todayâs internet strategy talk relates more to goal setting or performance metrics than to strategy itself.
To get you moving, I recommend the Harvard Business Review article âWhat is Strategy?â by Michael E. Porter. This business school classic makes the case that in order to compete you either have to do something different than your competitors, or do the same thing in a different way than your competitors do. This is a 1996 article thatâs more relevant than ever, and benefits greatly from more than 25 years of subsequent articles and books that expand on, research, and support Porterâs conclusions.
I also recommend the book âGood Strategy Bad Strategy: The Difference and Why It Mattersâ by Richard P. Rumelt. This book from 2011 serves as a practical âhow toâ guide for devising a strategy. Rumelt breaks strategy into three components. The diagnosis of the problem. The guiding policies youâll use to solve the problem. And the coherent action youâll take to put those guiding policies to work.
Every action you take is an experiment that yields data about what works and what doesnât. The more actions you take, the more data you are able to collect, analyze, and apply.
Add these two sources to your next business experiment, and you have a powerful multiplier for your efforts. Youâll get better data, youâll learn faster, and youâll move past the most risky actions quickly.
In Action
I was in trouble. It was early 2019. My accounting business wasnât getting any new clients. Network marketing wasnât working. Traditional marketing wasnât working.
I knew that I had to do something different, but I wasnât sure about what that thing was. I was terrified of doing the wrong thing.
So, I did nothing.
Doing Nothing
Doing ânothingâ did not mean I wasnât active. I worried. A lot. I hoped for a stroke of genius. I thought, and I read.
I thought that if I just thought hard enough, I could figure out a secure way forward. I was desperate for stability.
I knew what my problem was. I knew why my networking group wasnât working. I knew why traditional advertising wasnât working.
No one knew me. I was new to the city. I was new to the state. I was new to this business, too! I had been in the corporate world for almost 15 years before starting this business.
Humans like stability. When a group of people have been together for a long time, they feel stability and security with one another. When youâre the new person, you ARE the uncertainty.
People will stay in a bad relationship because they know what to expect. There is stability in knowing even if what you know is terrible. This is human psychology, and this is especially true in business because the stakes feel higher the more people who depend on the business continuing.
Itâs more insidious in business because few business relationships are truly terrible. A vendor or partner might be lackluster, but theyâre rarely abusive or destructive. And people in business are numb to promises of âbetterâ because they have experience being disappointed or burned in the past.
Even though I knew the problemâthat nobody knew me in this environmentâtrying to do more to help them know me felt like a huge risk. What if my efforts showed them that they didnât want to work with me? What if I embarrassed myself? I have to live in this community and see these people! What if I did the wrong thing?
The Wrong Thing
Freeze! The survival instinct primes the body to act. Which is better: fight or flight?
Life-or-death does not depend on our next action in the majority of our decisions. (Thank goodness.) Many of us substitute âquality of lifeâ for the life-or-death fear. And this is what I was doing. I feared that my quality of life was at stake.
My fears about doing the wrong thing and ruining any potential status in my new community, were extreme, but they felt very real.
When it comes to work or life, sometimes being frozen feels like itâs working. It feels like itâs keeping our quality of life the same. We can see that weâre not being eaten, and thatâs a relief.
Relief doesnât motivate us toward action.
Compare this to the panic of finding yourself lost in the jungle.
In the jungle, I diagnose my problem clearly. I donât know where I am, I need to get back to civilization before dark, because I am prey in the dark. Iâm only frozen for a moment. Iâm motivated to act.
In business, we often donât diagnose the problem clearly or at all. Even if we diagnose the problem as, âIâm stuck, and I need to move in order to get somewhere,â we donât move because things are relatively stable right where we are.
In the jungle, we make a choice about what direction to go to solve the problem.
In business, we consider all the possibilities we can think about or foresee down each path before we even think about making a choice.
In the jungle, we take action even though weâre scared or uncomfortable. We start moving, guided by our choice of direction, and motivated by our understanding of the problem weâre working to overcome.
In business, we choose our actions based on what is comfortable or known. We donât have a direction, but we do have sales goals, or operations goals, or revenue goals, so we take whatever action is necessary to hit that target regardless of whether it moves us forward.
Itâs good that business is not the jungle.
But we can learn a lot from this jungle analogy.
The Three Components of Strategy
In the excellent book, âGood Strategy Bad Strategy: The Difference and Why It Matters,â Dr. Richard P. Rumelt breaks strategy into the three components that we discovered in this jungle analogy.
First, the Diagnosis. This is a clear understanding of the problem that helps to uncover points of leverage.
Second, Guiding Policies. This is the direction youâre going to go and which fulcrum youâre going to focus on.
Lastly, Coherent Actions. These are the things youâre going to do. These put the guiding policies to work in order to solve the problem.
With these three components in mind, we can now apply what weâve learned about strategy and the importance of differentiation from Michael E. Porter.
Dr. Porter points out that in order to be successful in competition we either have to take different action than our competitors or we have to do the same actions in different ways. If we arenât different, or if there is no substantial difference between competitors, then customers will shop only based on lowest price.
At that point, everyone loses. The competitors cut themselves to the bone and eventually bleed to death. The customer doesnât gain any competitive advantage for themselves because their own competitors can also buy what is now essentially a commodity at rock bottom prices. This compounding death spiral.
How (and Who) Does Strategy Help?
For entrepreneurs, business people, and anyone who wants to change the world or leave a legacy the price of security and comfort is too high.
Taking action provides valuable information that informs the next action. Fear of taking a wrong step is real, but the risk is low, especially if you resolve to learn quickly from each step.
Embracing our differences in order to compete and succeed can feel scary, but we can limit our risk and multiply our effort by using a clear strategy as a framework for our actions, and revising our strategy frequently as we gather more information and learn.
The next time you feel stuck or your business is facing a problem, remember the three components of strategy. Diagnose the problem as clearly as you can. Establish guiding policies that focus energy and resources on key points in solving that problem. Find leverage by finding ways that you are different than your competitors or that you do things differently that benefit your customers. And then chose actions that support each other.