The other day, a friend, a very focused technology marketer, made the comment that “strategy”, in the business world, is a “vague term that disguises people who don’t really create much value” and that the essential levers for adding value in the business world are (1) increasing revenue, (2) reducing costs, or (3) reducing risk.
Since I work in a strategy role, I naturally felt that I had to defend myself. I shared my friend’s observation with my colleague, Jonathan Ha, who argued that, yes, those may be the three key levers in the business world but that “If you address all three, you are a Strategist! A Strategist takes a holistic view across all of these levers before determining where, and how, to engage.”
I took the challenge of trying to map these three activities to the parts of the ‘value chain’ in which I most heavily participate (For those of you unfamiliar with the concept, the “value chain” is a metaphor for thinking about the activities that allow an organization to create an offering for a customer. You can read more and see a sample diagram on Wikipedia.)
The diagram below maps sample business activities to ‘levers for adding value’ (y-axis), as well as to a few selected (and adjustable!) parts of the value chain (x-axis). Jonathan had the additional insight that the chief way strategists reduce risk is by ensuring alignment across initiatives that take place across the value chain (See if you agree.).
I’ve found this matrix useful for me to think about what I do on a daily basis, and where I might consider doing more. I think, too, that the method is generalizable to other strategy positions, in other industries. Please let me know your thoughts!