The Strategy Sniff Test

Does Your Strategy Stink? Use The Strategy Sniff Test

One of the concepts I really like from the book “Playing to Win” by A.G. Lafley (former Procter and Gamble CEO) and Roger Martin is the “strategy sniff test”.

The strategy sniff test is a tool I use to determine whether an organization understands what strategy is, and whether or not they have made real strategic choices.

Here is how to apply it:

Step 1: Identify your long-term 3 to 5 year strategic moves

A winning strategy requires a thorough industry analysis and understanding of how your industry is likely to play out and then getting very clear on the few, pivotal strategic moves your company needs to make to position yourself for future success.

Most companies try to do far too much. Strategy requires trade-offs. You cannot do everything you want to do. You cannot be everything to everybody. You cannot just blindly copy the moves of your competitors and hope to win. You have to figure out what to say “YES” to, and what to say “NO” to. You must make clear cut choices about how you will compete in the future, and then allocate your time and resources accordingly.

I often say to my clients, “If you are not making any trade-offs, you don’t have a strategy!”

Also, “If everything is strategic, then nothing is.”

A list of ‘things to do’ is not a strategy. It is just a list of things to do. Less is more when it comes to strategy execution. I recommend that you whittle your wishlist down to the 3 long-term strategic moves that will have the greatest impact on your future success, and say “NO” to everything that doesn’t make the cut.

I’ve always liked this quote from Jim Collins: “If you have more than 3 priorities, you don’t have any.”

Step 2: Apply the sniff test 

Take a look at each of your strategic moves in isolation, and ask yourself, “Could a competitor do the opposite of what you are planning to do, and could that also be a valid strategy for them?”

If doing the opposite of your stated strategic move would be stupid or nonsensical, then it is not really a strategic move at all. It is simply a table-stakes requirement for doing business in your industry. 

This is where I see many companies fail at strategic planning. Their stated strategies often include generic fluff like, “Provide fantastic customer service”. Well duh, really? So the opposite of that move would be to provide terrible customer service. Could that be a valid strategy for a competitor to choose and could they make money doing so? I don’t think so.

Same with generic fluff like “Hire A-Players”, “Provide great training”, “Own the voice of the customer”, “Be a preferred employer”. These things are enablers of strategy, but they are not strategic choices, because doing the opposite of these things would be stupid. 

A strategic move should be something that will help you to establish a competitive advantage in your industry. A strategic move should help you to create a category or a niche in your industry where you can genuinely claim a position of leadership or a meaningful point of difference. A strategic move should make it very clear what you are going to say “YES” to, and by association what you are saying “NO” to, and what you are NOT going to do.

Remember, strategy is about making tradeoffs. If you are not making any tradeoffs, you don’t have a strategy

And if the opposite of your stated strategic move is stupid or nonsensical – well – I’m sorry to say, it’s not a strategy. It’s just table stakes

Many companies haven’t actually made any strategic choices at all. In short, their strategy stinks!

Take a look at your long-term strategic moves now, and give them the “sniff test”. I’m betting a few of you will realize you still have more work to do.

Need help? Contact me to discuss your strategic planning needs.

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Until next time…
Stephen

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