What does it mean to be strategic – and how do you do it?
Being strategic means different things to different people, but when it comes right down to it, it’s finding the thing about you that is unique, and then selling it unique thing to a client who wants it and can’t get it anywhere else.
The word “strategic” is among the most abused terms in business language – after all, who isn’t trying to be strategic? Do you have department of un-strategic management?
That insight comes from Mara Lederman, an associate professor of Strategic Management at the University of Toronto’s Rotman School, and an instructor in the CCCA’s business leadership program for in-house counsel.
Speaking at the CCCA’s annual conference in April, Lederman asked the audience to think about what we mean when we say something is strategic, then proposed and dismissed a couple of the easy answers – what’s strategic isn’t necessarily what’s important, and it doesn’t mean there’s a cost-benefit payoff. Being strategic is not even about being better than your competitors.
Lederman quotes Michael Porter of Harvard Business School as saying a good strategic plan is “the creation of a unique and valuable position involving a different set of activities.”
Emphasis on the word “unique.”
The secret to thinking strategically about your business rests in choosing to do things differently – or to do different things – than your competitors. Lederman uses the examples of Walmart and Target in the U.S. They both target essentially the same consumer group in essentially the same price range, but there is no question they are different stores with unique offerings. Walmart’s in-house fast-food chain is McDonalds, Target’s is Starbucks. That alone is a strategic choice that sends a message to potential customers. Choosing difference and excelling at it is how those two big-box chains remain profitable and competitive.
According to Lederman there are three key ideas for strategy:
- Positioning – Where do you compete
- Choice – What do you do – and maybe more importantly, what don’t you do?
- Uniqueness – Would anyone miss you – have trouble replacing your services – if you disappeared?
While this is a general principle for successful business, it doesn’t have an immediately obvious application for law firms, private or in-house unless you’re in a niche market. Law is law, and if that’s what you do, it’s what you do.
But it is what you should be thinking about if you want someone to choose your firm over any other. What do you offer that no one else does? In what way is your firm is unique, and how are your marketing the firm to the segment of customers for whom you are the best choice?
Strategy requires you to choose to do something and to do that thing well – and not to do the things you do badly, says Lederman, using the example of Lego’s massive failure when it tried to turn its successful plastic brick-making business into a theme park.
“The essence of strategy is about being different,” says Lederman. But she adds this caution: “Companies often have an over-inflated sense of just how unique they are.”
One rule of thumb is that anything in your strategic plan that could apply to everybody shouldn’t be in your strategic plan. It’s only your strategy if it’s specific to you, if you have made the choice to differentiate yourself from your competitors in some way, and ignored the siren call of “but everyone’s doing it!” in order to remain unique in your field.
If your firm doesn’t have a strategic plan, you’re not alone – fewer than five per cent of the firms in the U.S. do, according to a 2018 Legal Fuel article.
According to the article, a strategic plan should set out the firm’s goals and how it plans to get there on a five-year horizon. “It should, among other things, state how big the firm will be, where it will have office locations, what its major practice areas will be, and what its client base will look like,” the article says.
Discussions going into the planning process should include deciding where the firm competes, and what its value proposition is – its key strategic assets and the choices that make it distinctive, says Lederman.
Some of the questions leaders should ask themselves are:
- Does our strategy articulate where we compete and how we compete?
- Does our strategy make it clear what’s unique about us?
- Why doesn’t our strategy apply to our competitors?
- Does our strategy guide lower-level decisions?
- What actions would we not take, if we follow our strategy?
- Is our strategy logically consistent?
- How will we measure our success?
Here are some of the key elements of successful planning set out in the Legal Fuel article:
- Establish a sense of urgency – lawyers must believe a strategic direction is necessary for the firm to survive
- Get commitment from firm leadership – Without support from the very top the effort is “doomed to failure.”
- Involve all partners in the process – Making the partners feel involved in the process increases the chance it will succeed
- Keep it simple – Stay focused on the most important projects – you can always add more later.
- Create a plan that lives and breathes – It should be flexible and dynamic, with principles that can be incorporated into the firm’s day-to-day. Review and update often.
- Measure and reward desired behaviour – Behaviour doesn’t change without incentives.
- Make it happen – Implementation has to be a high priority.