Whether it’s a military campaign of global implications or the U13’s tilt at the local soccer trophy, strategy will define success.
Strategy is a plan of action leading to a defined and intended set of positive consequences culminating in successful results. It is the process of achieving success through a well thought out and executed plan. It is no secret that companies with best strategy come out on top.
‘Winging it’ is an all-too-common approach in business and life, often propelled by early success. But winging it will, at best, only work to a point. A great idea, market opportunity and workforce talent will get you so far, but only so far. Sooner or later, almost certainly sooner, strategy is necessary to provide frame, form and direction to a vision.
Reaching through history strategists are largely seen through the prism of war and conflict such as Hannibal, Genghis Khan, Napoleon and undefeated Czech national hero Jan Zizka, a tactician and weapons innovator unlike any other. These all make for remarkable reading and some timeless lessons, but thankfully these days we are not so reliant on national and international conflagrations to compare and measure our ideas of strategy and find our business strategy examples.
Business strategy and innovation
Today’s touchstones can more likely be found in the directly relatable fields of business strategy and innovation.
Whether it’s John D. Rockefeller - His path from son of a peddler to the world’s richest man was paved with the attributes of thinking differently, developing a strategy and pursuing it. It was the time of the oil boom and the world’s biggest oilmen were all doing largely the same thing and competing with each other. One of the things Rockefeller did was observe the huge amount of wastage involved in oil drilling, refining and barreling and the vast amounts of apparent by-product being thrown away on a continuous basis. So while the other oil barons locked horns he turned his attention from oil itself to its unwanted discharges and used it to create markets for lubricants, common grease, Vaseline and kerosene - literally creating vast business and revenue from other people’s rubbish!
Or Robert Moses - From the mid-1930’s to 1968 Robert Moses was a Master Builder of extraordinary output and impact. He never held any position of public office, yet managed to build: 658 playgrounds, 13 bridges, 150,000 housing units and 416 miles of parkways. His vision for parkway developments was based on the fact people did not oppose parkways, so there was his path of least resistance. And then he applied a degree of cunning. He realised that getting a project underway was far harder than managing the project once it was up and running. So under-projecting costs at the earliest stages was crucial to getting the green light. Then once going ahead, and with the actual costs revealing themselves, it would be too late to halt the process.
These are extraordinary examples of vision, opportunism, commitment and execution.
Successful Business Strategy Examples
Airbnb
This brand has been documented over and over for its mould breaking business plan and as a business strategy example, but it always bears revisiting. Achieving a pre-Covid $100billion evaluation in December 2020, Airbnb has, to some extent, changed the world. Yet its not-so-distant origins are about as basic as you can imagine - three air mattresses on the apartment floor of the co-founders. Charging these out at $80 a night they realised there might be more to this so they built a website and encouraged others to list their own floor space and mattresses. But this did not lead to instant growth and stratospheric success. In fact Brian and Joe started selling cereal to earn some cash.
Their website had many listings and plenty of traffic and they remained convinced that the market existed, but why so few bookings? They decided the listings weren’t enticing enough so they took a camera, visited everyone who had listed in the New York area, gained permission for them to take their own pictures, used a little editing and hey presto, their listings became far more attractive propositions. Bookings picked up and in little more than a decade, the cereal salesman with three inflatable mattresses had one of the world’s biggest businesses on their hands. They never did anything particularly grand on their way to mega status. They did employ local photographers to take pictures (at no charge to the listers) and they provided guidance about writing up and presenting a property, but essentially the remarkable growth and scaling was based on that original situation of identifying a problem, settling on a workable solution and pushing on with that solution as a key component of ongoing strategy.
PayPal
PayPal is a remarkable business strategy example because it dared to dive into and reinvent a truly vast global system that seemed impenetrable - Banking. The amount of capital required, the regulatory hoop jumping, government approvals and the years it takes to build trust with customers and their cash, any one of these would dissuade most. But not PayPal. Banks are daunting because they are massive and their business model has remained largely unchanged for centuries. Rather than let that be a reason not to disrupt it, PayPal saw at as an absolute reason to get stuck into it!
So how has it gained the respect, fear even, of banks so quickly and built customer trust? For one thing the technology it requires and uses is relatively limited and it spends less in this area than even medium sized banks, but its platforms are considerably in advance of conventional banks. Also it has cut out the banks from transactions by dealing directly with merchants. The process is simple, safe and efficient - something any bank would like to boast but few ever can.
Banks also built their partnerships with the likes of Visa and MasterCard, not reaching out any further than that, content in the knowledge that credit and debit cards would be at the heart of financial transactions long into the future. But MasterCard already had a partnership with PayPal in the works and was clearly more attuned to the future. That future now sees PayPal commanding 54% of the payment processing market.
Perhaps banks were too comfortable, too well set and not vigilant regarding possible disruption in their sector. They were global behemoths, they were an intrinsic part of business and life and had been so for hundreds of years. Who on earth would be crazy enough to take it on and do it differently? Well someone took a close look, saw possible complacency and decided banks were far from untouchable. It was boldness of the highest order, and brilliant.
Toyota
Another company strategy example is Toyota. Where you might argue PayPal was driven by a degree of remarkable boldness and arrogance in what they were trying to achieve, Toyota spent years and years watching, waiting and learning by analyzing the US car market and its methods of production. Up to the 1970’s cars were generally not exported as they were costly and unwieldy to do so. As a result US car makers enjoyed over 82% of their domestic market. Then Toyota started to chip away at the percentage by selling their cars into America at cheaper prices than the home manufacturers. Keen to protect their market the government acted and slapped protectionist taxes on imported cars which leveled the playing field in terms of prices. But Toyota weren’t put off.
The Japanese moved production onto US soil, thereby navigating around this tax. Of course it meant that their manufacturing costs would now be in line with their American competitors, yet they still produced quality vehicles with considerably better price tags. This is because they had spent years observing every aspect of American automotive production, identifying everything it did well and everything that could be done better, more efficiently and economically. Armed with this forensically detailed information Toyota was able to create a leaner process and better value vehicles. It knew the big picture was made up of a thousand small details and Toyota ensured those details were understood and refined. And the workforce was aware that every small task was part of that big picture and had to be undertaken precisely and properly. With US manufacturers now commanding less than 50% of their market, Toyota's approach and impact has been enormous.
Reykjavik Energy
Reykjavik Energy is the largest public utility company in Iceland, serving more than 120.000 homes in southwest Iceland with electricity, hot and cold water, broadband, and sewage treatment. When the organization was restructured into three daughter companies, unique governance issues arose. DecideAct’s flexible and powerful Strategy Execution Management platform kept Reykjavik Energy on track during reorganization—and beyond!
Samkaup
Samkaup, a major retail grocery chain in Iceland, operates 60 stores under four brands. An important goal was to create a nurturing organizational culture among the geographically and culturally diverse business units. Another priority was to more fully engage regional and local management in designing strategy. A beta version of the DecideAct platform (Samkaup was one of DecideAct’s first test companies) was implemented and limited to the Executive Team for the first two years. Later, with the full version of DecideAct, the scope was extended to include all second-level and store managers. This focus on team members’ personal motivation to see their organization succeed has served Samkaup very well!
What about your company's strategy?
It is never too late to rethink your company's strategy. Become a successful example like Airbnb and Reykjavik Energy, by tracking the progress of your business strategy and by taking action whenever needed. With the DecideAct solution, everything is possible.
