7 Secrets of a Strategy of Preeminence

by Robert Hargrove | Executive Leadership, Master Strategist, Strategy

7 Secrets of a Strategy of Preeminence

by Robert Hargrove

The best CEOs don’t just have strategies, they have strategies of preeminence that result in outside success.

The term “strategy of preeminence” was coined by my good friend and partner, Jay Abraham. I’ve pondered Jay’s strategy of preeminence for years and always thought it was like a great Picasso painting that rattles your brain and makes you see the world differently.

Jay shares his ideas with a brilliant splash of color, rendering them like an impressionist painting, leaving your imagination to fill in the rest. I asked Jay if I could collaborate with him, building out his idea. Jay graciously granted me full creative license.

What exactly do we mean by a strategy of preeminence? First a definition. Strategy is a focused and coherent way to meet a challenge, such as creating a successful business. Preeminence means “the fact of surpassing all others.”

Companies with a strategy of preeminence are so good at what they do that no one else can offer a close substitute.

Google has a strategy of preeminence in the world of search and online advertising, connecting people to the information they need. The company is so good at what it does that it surpassed Yahoo and Bing over a decade ago. It is interesting to note that Google is worth more than all USA airlines combined.

P&G has a strategy of preeminence in the world of market innovation that is a result of capitalizing on the consumer’s frustration. The company introduced three consumer products that grew into billion dollar businesses capitalizing on customer-centric innovation. Think Pampers, Swiffer, Mr. Clean.

Chipotle is another company with a strategy of preeminence. Theirs involves providing delicious, healthy, fast food with an ethnic twist at a low prices. The company is growing at 30% a year and is disrupting McDonald’s, which is growing at less than 10% a year for the first time in decades.

These companies treat their customers as clients, who are under their care and protection.

Without a strategy of preeminence, the chances of being disrupted are very high.

Every day a company on the S&P 500 list goes out of business to be replaced by a disruptive competitor. If the present trend continues, by 2030, half the companies on the list will disappear.

Harvard Business School estimates that 83% of large companies feel they need a strategy to deal with disruptive competitors fresh from the niche. But only 36%, have the confidence they can do it. At the same time, only 12% of companies—large, medium, and small—have a strategy that goes out beyond the next year or so.

According to the Kauffman Foundation, eight out of ten entrepreneurial businesses also end up going out of business. They may have come up with a good idea for a business, yet were not successful in coming up with a customer value proposition.

Or they haven’t looked at how they could reinvent their company by combining an innovative business model with resources and external and internal processes to build a game-changing product, go to market, and turn a profit.

A strategy of preeminence may be the fastest and most powerful way to change your business results.

It’s my observation that most business leaders don’t have a strategy of preeminence that is different from a strategy of operational excellence.

If you want a strategy of preeminence, you might start by looking at the synonyms for “preeminence,” which might help you reset your mindset: greatness, supremacy, distinction, innovative excellence, first-rate. Ask yourself: How do these definitions apply to your company and what you offer your customers?

You also may need to recognize that you probably don’t understand your present strategy well enough to know whether it’s working.

Create a strategy of preeminence either by “optimizing the core” or doing “something more than core.”

As friend and partner, Shim Bae Kim, Vice Chairman of Korea Telecom, points out, “We all love to talk about examples like Apple, Amazon, Google, but in fact, these kinds of companies are very rare.”

There are basically two ways of to get to a strategy of preeminence.

The first is to think in terms of optimizing your core business by becoming better at what you already do. Amazon invented the idea of selling stuff online, then came out with Amazon Prime which lowered shipping costs for customers.

The second is to do something more than core that really represents a whole new business model. Steve Jobs did that when he moved away from selling computers to selling devices like the iPod, iPhone, and iPad.

Every CEO and founder can create a strategy of preeminence and drive explosive growth.

In my work with executives and company founders, I have found that there is a process for creating a strategy of preeminence that can be applied in large, medium, or small companies and which represents an integrative, step-by-step process.

It starts with asking the leader, “Are you a strategist?” and is based on the premise that a strategy of preeminence is not just beating the competition, but creating a company that matters. Each step requires an active inquiry into some very key questions.

The 7 Secrets of a Strategy of Preeminence

1. Becoming the leader your business needs starts with empathy.
What are the rising aspirations and unmet needs of customers?

2. To get a stuck business unstuck, face reality.
What is the current business situation?

3. Declare an Impossible Future or ennobling purpose.
Who do we aspire to be as a company, to whom will we matter, and why?

4. Segment a high-growth market.
Where will we play as a company?

5. Create a strategy of preeminence.
What will we do for customers that is so good that the competition can’t offer a close substitute?

6. Create a delivery mechanism to match.
How will we combine a wining business model, resources and process to go to market and turn a profit?

7. Apply a profit formula.
How will we make money? The acid test: Are there enough customers willing to pay a high enough price?

Be a Monster of Execution

I have had the opportunity to work with some of the best CEOs and entrepreneurial-minded leaders in the world.

There is something about these leaders that stands out from the crowd: Once they create a strategy, they execute in a fiendish way.

The best leaders seek to accomplish big things (not small things) and pursue them with a level of ATTENTION, INTENTION, and DRIVE that most people have never experienced in their lives.

This is what leads to a track record of extraordinary accomplishment.

Download my free ebook here on the 7 SECRETS TO A STRATEGY OF PREEMINENCE.

Build a One Page Strategic Plan

by Robert Hargrove | better leaders, better world, Master Strategist, Strategy

Build a One Page Strategic Plan

by Robert Hargrove

One of the bedrocks of leadership is strategy.

Companies like Amazon, Uber, Airbnb, and many others became super successful because of the size of their ambition and their strategy for how to achieve it, not because of the size of their assets or immediate resources.

Yet, I have found in coaching executives that strategy is a big problem for most business leaders. In big companies, strategy is often delegated to a specialist, or VP with little power, or it becomes a bureaucratic exercise that confuses strategy “to change the game” with strategy “for operational excellence.”

For small companies, like a doctor’s group practice, a Mexican restaurant chain or small leather furniture manufacturer, strategy is often done in people’s heads and is looked at as a problem solved and settled a long time ago.

Also, the thinking around strategy tends to be insufficient, often confused with beating the competition at their own game rather than creating a company that does something new and different that truly matters. Think Minute Clinic, Chipotle, Ikea. Then there is the whole issue of execution.

A CEO who sits on several outside boards recently confided to me that, while there are tons of great books on strategy, “I don’t think any of them has had much impact on the way companies do strategy.” While most managers can reel off the latest buzz words about strategy—red ocean vs. blue ocean—seldom does it actually shape their strategic thinking or get reflected in a real strategic plan on paper.

If you want to teach people to think strategically, don’t teach them how to think. Instead give them a tool.

In thinking about a coaching session I was going to have with the CEO on strategy, I was reminded of something R. Buckminster Fuller said, “If you want to teach people to think differently, don’t tell them how to think, instead give them a tool.”

As an executive coach, my job is to provide what’s missing that would make a difference. This led me to start thinking about a tool called the One Page Strategic Plan that would help leaders think about strategy in its completeness, without giving people a headache.

It is a easy to use tool any CEO or entrepreneur can apply, that translates across the world to businesses of all shapes and sizes. The One Page Strategic Plan (OPSP) includes all of the pieces of the strategy puzzle, especially those that are often perilously forgotten or ignored.

The OPSP will help you think about your “winning aspiration” and existential purpose, bridging the external environment and internal organization, a competitive strategy for optimizing the core business and its profitability, along with a strategy for seizing the white space and doing something more than core to drive exponential growth. When you get done with the plan, you should have a focused set of priorities and be ready to jump into action.

I sent the first draft of the One Page Strategic Plan to the CEO a week before our meeting. He called and thanked me for sending it and then engaged me in an hour-long conversation about his whole strategy. I was actually very impressed with the 10X future he described for his company, and how strategic his game plan was, which was defined by 2 or 3 brilliant initiatives.

I have tried to keep The One Page Strategic Plan as compact as possible, so it would apply to companies of all shapes and sizes. It can be used to guide top team sessions where you come up with a growth strategy, VC pitches, board presentations, as well as to help align and mobilize people across an enterprise.

So here goes.

The future belongs to those who see exciting new possibilities before they become obvious.

ONE PAGE STRATEGIC PLAN

Warm Up Exercise

These questions are food for time compressed brainstorming: What are the external trends that will impact your industry? Inside strengths? Weaknesses? Underutilized assets? Hidden opportunities? Biggest strategic opportunity? Think back from a $billion and ask what’s the blueprint to get there?

Creating the One Page Strategic Plan

Note: If used at a strategy session with your team, it’s important to distribute the template only, don’t fill in any blanks.

1) STRATEGY STARTS WITH PURPOSE

Does your company have an ennobling purpose that represents making a difference that matters for customers? Write your company’s purpose that is based on what you do that truly matters and for whom.

2) STRATEGY IS ABOUT REALIZING A WINNING ASPIRATION, 10X FUTURE

What is your 10X future, winning aspiration, or end game? BHAG goals for 1 to 3 years?

3) STRATEGY IS HOW TO GET TO 10X FUTURE

Strategy is about HOW. Period. It doesn’t matter whether you are a startup CEO who has to run the businesses in its completeness, or the VP of Operations.

A) What is your strategy for how to get to your 10X future for optimizing and maximizing your core business?

B) What is your strategy for doing something more than core? Seizing the white space and creating a new monopoly business in a small niche, something that disrupts the competition.

4) STRATEGY IS PICKING THE RIGHT PRIORITIES

Look at your 10X future, BHAGS, your goals for the year and gain insight into the biggest challenges or choke points.
Create one goal for the year. Pick four priorities, one for each quarter. Include a KPI or metric for each. Who is accountable for each priority, performance goals, completion date?

Additional Questions for StartUps or Product Divisions:

• Where are you going to play? What is a small, new monopoly niche? Specific market segment or customers?

• How are you going to win? Breakthrough customer value proposition?

• Organization needed to win? Talent, resources, and processes?

• Business model? Lay out how will you combine breakthrough value proposition, resources, and processes to go to market and turn a profit.

If you are interested in getting a copy of this template, message me and I will send you a copy.

My favorite books on strategy are: The Strategist by Cynthia Montgomery and Playing to Win by A.G. Lafley, Good Strategy Bad Strategy by Richard Rumelt, Scaling Up by Verne Harnish, who first coined the idea of a One Page Strategic Plan as it applied to small business.