Rediscover Your Business Strategy: A Guide for Frustrated CEOs

Are you a small or mid-sized business CEO grappling with stagnant growth? Resetting your business strategy could be the key to regaining momentum. This step is essential in my five essentials for frustrated CEOs.

Starting with a Business Plan

Many small and mid-sized businesses start with a business plan. However, many more probably don't. Regardless, in most companies, that business plan quickly gets shelved as teams tackle the daily tyranny of the urgent. The pressing demands of everyday operations often overshadow strategic thinking, leading to a lack of direction and purpose.

In my client discovery calls, where I get to know my clients, their businesses, and their challenges, I seek answers to the basics of the Hambrick and Frederickson strategy diamond. This tool has become my go-to for assessing strategic alignment and initiating meaningful conversations with leadership teams.

Introducing the Strategy Diamond

If you've never heard of the Hambrick and Frederickson strategy diamond, that's okay. Until I went to business school, I hadn't either. However, it quickly became my favorite article on business strategy. I've found it to be a great discovery tool and an even greater workshop tool for kicking off new client engagements and helping leadership teams hit the reset button.

The Hambrick and Frederickson Strategy Diamond, credit Hambrick, D. C., & Fredrickson, J. W. (2001). Are you sure you have a strategy? Academy of Management Executive, 19(4), 51–62.

Understanding the Strategy Diamond

The strategy diamond, developed by Hambrick and Frederickson, outlines the basic strategic questions a company, product, or service should be able to answer to prioritize their activities, communicate what they do internally and externally, and build stakeholder value. Here's an overview of its components:

• Arenas: Where will we compete? This includes markets, industries, customer segments, and geographic regions.
• Vehicles: How will we get there? Per Arena, this can involve distribution channels, partnerships, acquisitions, and alliances.
• Differentiators: How will we win? This encompasses unique value propositions or advantages like product features, brand, price, innovation, etc.
• Staging: What steps will we take over time? This involves the timing and sequence of strategic initiatives and actions, considering market conditions, resources, and competitors.
• Economic Logic: How will we earn? This includes revenue and expense strategies, such as low price/high volume or price premium for features or services.

The Power of Strategic Alignment

This tool is incredibly effective for regaining alignment, refreshing current strategies, or evaluating competitors. I call it an 80/20 tool because it addresses about 80% of what any business needs to get where it wants to go. To get closer to 100%, it could be supported by more competitive analysis using this diamond format and a SWOT analysis, but let's not let perfect be the enemy of great.

Hambrick and Frederickson Strategy Diamond Worksheet by Jason Dyer

The template above outlines the elements of the strategy diamond and leaves room for inputs on the right. Examples of each component are given to help you understand what answers you should have for each diamond element. And the elements are in a purposeful order. They build on one another toward the end, where the critical component for any business culminates - Economic Logic. Whether you are a for-profit or non-profit business, knowing how you compete for market share and bring in revenue is the bottom line.

Next Steps

To rediscover your strategy, download the simple strategy diamond template I built above and see if you can fill it out without too much trouble.

You know your business strategy well if you can answer these questions quickly. If not, spending some time revisiting these questions is a worthwhile exercise. When complete, the alignment magic starts when you put the same challenge to your leadership team. Share the template and see if they have the same answers you have. Do they need help answering these questions at all? Did comparing answers result in heated debate? Did everyone land in the same spot after some healthy disagreement?

Gaining alignment is the goal—alignment across your leadership team, including you. In my experience, the CEO sets the organizational tone and priorities. If the entire leadership team is aligned on a different path than the CEO, frustration by every measure will result.

What if this makes my head hurt?

Of course, if you need help with this approach, contact me. I can offer you a no-cost call to get you going, or we can discuss other ways my colleagues and I can help. This can be a self-help tool. Most business leaders generally know what to do; lifting your gaze from your daily issues is challenging. An outsider can often help a leadership team gain a fresh perspective that makes the experience and knowledge in an organization pour out.

Don't let another quarter go by assuming you have a strategy and strategic alignment across your leadership team. Try the Hambrick and Frederickson template. Reviewing the results can take as little as one hour, and that hour can save you years of frustration.

By Jason Dyer , CMO

Originally published in the CEO Blog