Business Strategy: The Giants and Rangers Are Not Twins
My son is playing machine pitch baseball for the first time. He and I went into this activity thinking that the goal for the team is the same as in major league baseball: to win. So our assumption was the coach would have a strategy to win. During the course of events I found out in a game, every person gets to bat during an inning. I also found out score was not kept. At first I thought this was some form of political correctness until I thought about it more. Almost all of the boys on my son's team have never played before and the same is true for the other teams. These boys could barely catch a ball or hit a pitch. I realized the goal was not to win but rather it was to develop baseball players. So when every boy gets to bat in an inning, it is because they are giving each boy a chance to develop hitting skills. It also allows the fielders to get experience fielding when the ball gets hit. My mistake was applying a major league strategy to a junior league when the goals were completely different.
Different Strokes for Different Folks
One of the major mistakes in business is the same mistake I made. One firm observes a successful firm (often not in the same industry) and the first firm begins to believe that if it duplicates the successful firm's actions (see the definition of strategy), it too will be just as successful. While certain principals in business are constant, what works for one firm rarely works for another firm. This is because the successful firm has designed a strategy around unique factors. These factors include the strengths of the firm, the weaknesses of the competition, and the type of market to just name a few. So the observing firm may try to duplicate the strategy of the successful firm but the factors for success are not present. This is the same mistake I made with the baseball teams.
For several years I observed a particular church. Churches and other nonprofit organizations have goals and, therefore, need strategies to accomplish those goals just like for-profit businesses. Because the leaders of the church graduated from the same college that is run by a very large church, these leaders continually look back to the large church for guidance. But guidance turned into emulation, copying almost everything that was done in the large church. Even the same titles were used for special programs. The leaders of the smaller church believed that certain actions made by the larger church are what caused the large church to grow. So the smaller church adopted those actions. In other words, the small church leaders adopted the large church's strategy. It has not worked. The leaders of the small church continue to push themselves and their members to be a clone of the large church instead of being themselves. Until this church creates it own independent strategy, it will probably stagnate and not fulfill its mission to the fullest extent.
A term in strategic management that is appropriate here is strategic fit. The concept of strategic fit is that the strategy of a firm must conform to its internal characteristics and external characteristics. Grant1 states that "for a strategy to be successful, it must be consistent with the firm's external environment, and with its internal environment -- its goals and values, resources, and capabilities, and structure and systems." Strategies must be set by an organization that are unique to the organization; they cannot be copied and used by other firms. Each firm has its own particular characteristics -- internal and external -- that will help mold its strategy.
The lesson to be learned here is that firms need to be themselves. Each firm must develop its own strategy, not copy the actions of other firms. This will be no more successful than for me to get my son's baseball team to follow a major league strategy. Even two major league teams such as the Giants and the Rangers cannot use each other's strategies because of the different strengths of the teams and the competition they play. The bottom line for an organization is be yourself.
1 Grant (1991). Contemporary Strategy Analysis (6th ed). Blackwell Publishing, Malden, MA.