Words of Wisdom:

"Elections may be won on the backs of the poor, but governments run on the back of business" - Vickram Bahl" - Uselesspoliceman

Kari

  • Date Submitted: 03/10/2012 11:48 AM
  • Flesch-Kincaid Score: 57.5 
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Strategy on One Page
My partner Mats Lederhausen, formerly worldwide head of strategy for McDonald's, introduced me to "Strategy Trees." The concept is, like most useful things, deceptively simple. It forces you to get at the heart of what you are trying to achieve. The "tree" analog comes from the linkage between the questions in a Strategy Tree. Start at the root purpose of why you are doing something and link it to your goal and how you will measure progress. Graphically, it looks more like a series of adjacent boxes, as illustrated below (click on the image to see a bigger version):


It comes down to asking the "Why, what, who, and how" of your business, arraying it across one page in a way that makes it extremely useful as an alignment tool amongst management or board members. This is hardly a novel concept, but it falls into that category of common sense that is not so commonly done. There are various permutations of these questions, but here are four that I have come to use in trying to summarize the big picture of a portfolio company (with an example provided):

1. Why do you exist (what's the big idea)? Why does your business have a right to exist and what purpose is it trying to achieve? For example, in one of our portfolio companies, nail salon chainMiniLuxe, its purpose is to try and "Starbuck nail salons" by offering more consistent service and labor practices to the most used, but most under-regulated beauty service. There are 65,000 nail salons in the US, but they are largely mom-and-pop shops with no serious chains offering consistent quality.
2. What is your value proposition? This is a statement geared towards the customer. For MiniLuxe it is to be the place to go for healthy and happy nails — by being the most hygienic, highest quality, convenient, and bang-for-buck experience around. In writing down your value proposition "answer," think about the unique capabilities and assets that your business has that clearly differentiates it from...

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