Joan Magretta wrote a guide to strategy guru Michael Porter’s work called Understanding Michael Porter. As she worked on the book, she kept a list of insights, including “that most companies think they have a strategy when they don’t,” as she noted in an article on HBR.
Here are her ten insights and how they relate to the Baldrige model:
- You gain a competitive advantage by creating unique value for customers. Customer-driven excellence is a Baldrige core value, defined as an organization’s performance and quality being judged by its customers. If customers rate your performance and quality high, you will gain a competitive advantage.
- Your strategy must also clarify what the organization will not do. The Baldrige model asks several questions about how you develop strategies that will help you prioritize your strategies.
- “Competition is about profits, not market share,” writes Magretta. You grow a company by increasing profits, not market share.
- Brilliant strategies will not lead to performance excellence unless you execute them. The Baldrige Criteria devote an entire section to strategy implementation.
- Good strategies are interconnected and build on core competencies. The Baldrige Criteria ask how your strategic objectives capitalize on your core competencies and balance short- and longer-term challenges and opportunities.
- While it’s important to be flexible, your organization must stand for and excel at something. You must have the resources and capabilities to execute the plan
- You need not predict the future to commit to a strategy.
- “Vying to be the best is an intuitive but self-destructive approach to competition,” Magretta writes.
- You need both a distinctive value proposition and a value chain tailored to deliver it. The Baldrige model promotes the development of a work system that capitalizes on your core competencies, delivers customer value, and achieves success and sustainability.
- Your strategy should delight your most important customers while deliberately making your least important customers unhappy. The Baldrige Criteria ask which customers you intend to pursue, and why.
To read more about effective strategic planning, click on these articles: