Editor’s Note: This week (April 23, 2007) is Small Business Week here in the United States. You may wonder what this means to you.
One way to make Small Business Week relevant to you is to reflect on your own business. Are you headed in the right direction? Is your focus in your business clear — not only to you but to your staff? Are you pointed towards growth, or are you stuck in a rut going nowhere?
Gary Harpst, CEO and founder of Six Disciplines, LLC, developer of the Six Disciplines business excellence program for small and midsized businesses, advocates a two-word strategy focus.
I’ve written about this two-word strategy before at Success Magazine’s blog: “Can You Describe Your Business Strategy in Two Words?.” But this week in honor of Small Business Week I thought I would ask Gary to explain, in his own words, exactly how to walk through the process of getting to a two-word strategy in your business — and what it means if you can’t. — Anita Campbell, Editor
Editor: Gary, what are some examples of famous two-word strategy statements?
Gary Harpst: Examples of a two-word strategy statement might include:
- Hot Donuts (Krispy Kreme)
- Computers Direct (Dell)
- Quick Automotive Service (Jiffy Lube)
Editor: Some people might suggest those are brand taglines. Why do you think they are more? What’s the value?
Gary Harpst: When we challenge business leaders to describe their strategy in two words (or at least two succinct thoughts), what we are really trying to get them to do is answer two questions.
1) What business are you in?
2) What makes you different?
Krispy Kreme is in the donut (pastry) business but what they built their reputation around was being hot and fresh. In fact when they first were established they had a sign they turned on to show when the donuts came out of the oven.
Dell is in the computer business but they have become the market leader by innovating around central idea which is to deliver the benefits of direct buying (lower price and buying convenience).
Editor: A business needs more of a strategy than just two words, correct?
Gary Harpst: Of course.
But think of the two words as a bull’s-eye. It’s the center of the target around which the rest of the company is built. And you can’t move the bull’s-eye without disturbing the rest of the company’s activities and resources.
Relating the question posed earlier about brand taglines, these two words are not the same as a tagline.
These two words are chosen to communicate clearly internally — to the team members — about what the company is really trying to do. Every resource investment decision should be aligned around building the products, services and marketing to deliver on these two thoughts. The two-word expression of strategy defines to the people inside the company the essence of what it is trying to become and is chosen for internal clarity.
Branding is the art of explaining to the market (customer) what a company is promising to deliver. Marketing taglines and branding phrases are chosen to communicate effectively externally. They are chosen with many external factors in mind such as what works best for certain target markets, what is memorable, etc.
Editor: How would you suggest entrepreneurs and business owners use the two-word strategy statement in their strategic planning? What’s the process?
Gary Harpst: We use a series of exercises described in detail in my book (Six Disciplines for Excellence) to help leadership teams find out whether they agree on what makes them different.
The exercises focus on listing single words or phrases that describe what business they are in and then having each individual explain why. Gradually, this process leads to agreement. We then repeat the process for what makes the company different. Getting agreement the first time this is done is sometimes a tough process.
Editor: Could you give us some examples of two-word strategy statements that might be applicable to small businesses in the following industries (just to prime the pump and get the thinking going):
Gary Harpst: Certainly. Consider the following examples:
- Dry cleaners — “Quick cleaning” (same-day turnaround)
- Gift shop — “Precious gifts” (caters to upscale clientele – $250 & up)
- Home cooking restaurant — ” Home-cooking restaurant” (is great as is)
- Landscapers — “Landscape maintenance” (focused on servicing existing accounts, optimized for routine maintenance not building new landscaping)
- Web design — “League websites” (web-based management of sports leagues)
- CPA firm — “Owner-operated businesses CPA” (CPA services to the small business market)
Editor: What if you’ve tried and can’t come up with a two-word statement. Does that mean your business lacks focus and that your organization will be off track? What do you do?
Gary Harpst: Be patient. Surprisingly, getting to this level of clarity is not easy.
Most of our clients are not able to do this in their first year’s planning session. I was the CEO of a successful software company (Solomon Software) and it took me 18 years to figure it out.
It is usually (but not always) easy to answer the question what business are you in, although sometimes you have think hard about whether you are in service business or in a product business. It is harder to answer the question of what makes your business truly different.
Keep at it until you can answer both questions and get internal agreement. That’s when you will have clear focus and an organization that is aligned.