Of leadership, competition and your strategic stance

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I was sitting in on our Advanced Management Program just last week, and Dr Gary Mangiofico from Pepperdine University opened the discussion by saying that leaders have two main concerns: strategy and people. He explained that senior leaders will spend time looking at where they are in the market, how they compete with others, and how they carry this out through their people. So, strategy and people. In this article, I will focus on strategy, discussing the notion of the strategic stance and how we compete within it through the combination of price and quality.

Strategic stance

All businesses have a strategic stance that is situated on a scale. On one end of the scale is the Defender, and on the opposite end is the Prospector. The Prospector stance is defined by nimbleness, the keenness to find the next big thing. It is always looking and moving about, hypothesizing and testing, so as to grow its market share. There are no systems to direct their actions, because it is amorphous. Businesses in the technology space, like Apple and Google, typify this strategic stance.

By contrast, the Defender stance seeks to protect its market share. It is usually adopted by the incumbent in the market and typically sees these companies building structures and systems to guard against the competition. It does innovate, but solutions seek to shore up defenses rather than to seek new businesses. Traditional businesses like banking and telecommunication tend to take up this stance.

In between these two extreme stances is the Analyser. This stance is one that has a mixture of both; it prospects for new business while strengthening current market share. It structures its organisation to take advantage of the nimbleness of start-ups, yet shores up its reserves to ensure that, as a group, it can drive the market.

Combining cost and quality

Within their stance, businesses compete on another scale; between cost and quality. On one extreme, you can be a cost leader, and focus on being the cheapest but without the attendant quality; or you could compete on quality and know that it would provide enough value to overcome its sticker price. Any point along this continuum requires you to give up one for another; to give up quality for a cheaper product, or to increase cost for a higher quality.

A leader therefore needs to make these decisions. She has to decide how to structure the business, and from there, how to compete within the market, so that it returns the best results. The combination of stance, price and quality takes up a large portion of a leader’s time, and it is important for her to decide what balance is best for the company. Here are two questions you can ask yourself to further clarify your thinking:

  • Which stance would best suit your business environment, understanding that you might have to structure the organisation to deliver on this?

  • How can you provide higher quality products and services at lower costs?

If you can uncover the answers to these questions, you will be able to lead your organisation to deliver even greater results.

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