Good Strategy Bad Strategy

by Dan Simpson CEO Taziki's Inc.

It’s time to formulate a 2020 strategy. You get out your notepad and start envisioning what a better future could look like if you hit some REALLY remarkable goals. Let’s increase sales by 25% (in a highly competitive market), let’s control labor to the ideal + 30 hours (and not a minute over), let’s scale the brand by doubling the number of locations, and while we’re at it, let’s get recognized by the Food Network as the hottest food brand. Bam! All of these goals sound like the foundation of a killer strategy, right? Nope. Not according to Richard P Rumelt, the author of "Good Strategy, Bad Strategy." He argues that these are merely aspirational goals (similar to political promises from the campaign trail), while a good strategy starts by firmly planting your feet in reality so you can focus on how to overcome the obstacles that stand in the way of progress. The author makes clear, “Goals are not strategy. Goals are wishes. Strategies are how one goes about achieving goals.” 

In my experience, formulating a good strategy starts with a level of candor few leaders are willing to embrace. So, try this. Get your best people in a room (people that will speak their minds and tell the truth. Not negative cynics or Pollyanna optimists but positive problem solvers). Start easy by naming what is working well, and figure out where you should double down your efforts so you don’t lose ground here. Then, and this is the hard part, focus MOST of your attention on what is broken. Where are you weakest, most vulnerable, and have lost your way? What is slowing or blocking your success? It happens to most restaurant brands over time. With growth comes dilution away from the founder's vision and discipline. Pat (Martin) tells the story of how just two guys ran the first Martin's in Nolensville, TN. Talk about a killer SPMH! Keith (Richards) tells the Taziki's story about how he and his wife, Amy, greeted every guest and treated them like family (just like the Greek man at the door did back in 1998 when they first visited the Mediterranean cafe that inspired Taziki’s).  Sadly, what made us great in the beginning often gets lost and has to be rediscovered. Additionally, we must face the fact that as times change, so must our business. There was a time when being a scratch-made fast casual concept was unique, but as U.S. consumers became more educated by 24-hour celebrity-chef cable TV shows, more restaurants opened to meet the new demand for fresh food. Furthermore, generational shifts have brought a new population (the largest generation) who challenge us with a different set of values, technological savvy and expectation for convenience.  Whatever your challenges are, face them. Name them. Attack them head on. 

Once you’ve written down a list of all your company weaknesses, come up with specific steps that you could do to turn the weakness into a strength. At Taziki’s, we went through this exercise in 2017. We identified multiple weaknesses, including: store design, guest experience, relevancy to millennials, mobile ordering, and slipping same store sales. We rolled up our sleeves and came up with a list of concrete actions we could take for each weakness.  The exercise is similar to a SWOT analysis (where you assess internal strengths and weaknesses but also external opportunities and threats); however, "Good Strategy, Bad Strategy" pushes the reader to go one step further then just listing tactics we could take to turn things around. Rumelt insists that a good strategy works when it “harnesses and applies power where it will have the greatest effect.”  We all have limited resources, so we will exhaust ourselves and our teams if we try to execute every good idea. Furthermore, not all good ideas are equally powerful. Push yourself with the thought experiment of asking: If I could only take one action to overcome this obstacle, which would I take? Prioritize. Intentionally limit your choices to help sharpen your mind to find the most important action.  Rumelt provides the reader with a tool kit of nine “sources of power” ranging from using leverage to effectively focusing on growth. If you like stories, you’re in luck as the author provides a lot of great stories from government, business and military battles to reveal when a good versus bad strategy was employed. 

Developing and implementing a strategy is the central task of a leader. Read "Good Strategy, Bad Strategy" if you're interested in more than just coming up with aspirational goals that you have no idea how to hit. If you're tired of company mission statements that sound like ego-inspired trash talk or empty political slogans, then you may appreciate the candor and practical wisdom of this 300 page book. Mostly, I think we all know that if we want to be successful in our personal relationships or our business ventures, we need to start with honesty. Tell the truth about what’s working and what’s not. Don’t sugarcoat. Don’t get lulled to sleep by last year’s positive press. Name what is blocking you from greater success and take action. 

 

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