Can Your Business Strategy Pass the Test?

“Your strategy should be reviewed and updated on a quarterly basis.  Of course, that assumes you went through a disciplined thought process and have a real strategy to start with!”  - Stephen Lynch, COO,


Does your company have a strategy? Do you know if the clients that you work with have a strategy for their business? If your company does not, then you may want to take Stephen Lynch’s advice and go “through a disciplined thought process and develop a real strategy” before you continue reading the rest of this blog.

As to whether your clients have a business strategy, I doubt that any of us in the talent acquisition and recruiting business could answer that. We may assume that most do have a strategy, since we only prospect for clients who have a need for our services, have the dollars to spend for our services, and have a demonstrated track record of success. Surely that would indicate that they have a strategy for their business. Maybe, but how good it is, is another issue.

In a recent blog post on, Stephen Lynch presented a 10 point pressure test for a company’s business strategy devised by McKinsey - who maintain that most companies can barely pass more than 3 of these tests. Hopefully your company and your client companies can score better?

Here is the test:

1. Will your strategy beat the market?
Perform a thorough industry analysis (at least once per year) to get a clear picture of how the competitive forces in your industry are likely to play out. To beat industry average growth rates you will need a meaningful point of difference that can’t be easily copied or nullified.  Mindlessly copying your competitor’s innovations is not a strategy – it is a recipe for mediocrity. Do you really have a winning strategy?

2. Do you have a sustainable competitive advantage?
How will you make money in the future?  Do you have a unique strategic position – a concept that you “own” in the minds of your target customers?  Do you have special capabilities that can’t be easily copied?  Remember that nothing lasts forever.

3. Are you focused on the bulls-eye?
Push for the narrowest possible segmentation of your target market. Clearly defining and understanding your ideal target market customer is one of the most powerful things a company can do to improve its strategy.

4. Does your strategy put you ahead of trends?
Many strategies place too much weight on current trends. But as Peter Drucker said, it is not the trends, but “the changes in the trends” that leaders must keep on top of. These changes creep up so slowly that most companies fail to respond until it is too late to mount an effective response to take advantage of it.  They delay taking action; held back by cost concerns, an unwillingness to cannibalize a legacy business, or an attachment to yesterday’s formula for success.
Always look to the edges. How are your early adopter customers acting?  What are the small, innovative new entrants doing?  What innovations could change the entire industry?

5. Does your data give you privileged insights?
It is easy to be overwhelmed with data – the key is to make sense of it all and obtain actionable insights.  Don’t rely on the same data your competitors use.  Do you really understand your customers? Companies who go out of their way to experience the world from their customer’s perspective will develop better strategies.

6. Does your strategy embrace uncertainty?
Prioritize all your current threats (things that could derail your strategy) as part of your SWOT analysis, and consider what action you would take if these worst case scenarios came to fruition.  Could you handle it?  Do you have a plan B ready to roll out?

7. Does your strategy require commitment and tradeoffs?
Hedging your bets is not a strategy.  A full commitment to defined course of action is the only path to sustainable competitive advantage. This requires tradeoffs – you can’t be all things to all people. What are you not going to do?

8. Is your strategy contaminated by bias?
Are there certain assumptions that your business leaders have made and are making regarding you products, services, customers, pricing, market share, customer experience, etc, that will keep you from fully implementing a successful strategy? If so, then get rid of them. Bias has no place in business or in your business strategy.

9. Is your leadership team fully committed?
Many good strategies fail to be executed because of a lack of commitment among the leadership team, where just one or two nonbelievers can strangle a strategic change at birth.

10. Have you translated your strategy into a strategic execution plan? Clearly define where you are going, and make sure everyone knows the specific actions they need to take to play their part.  Ensure your budget and resource allocation is aligned with your strategy. Strategy comes first!  Effort spent aligning the budget with the strategy will pay off many times over.

So how did your company do? Regardless of how well or poorly your company did, this exercise should provide successful business leaders with many unanswered questions and areas for improvement that will help their companies grow and be profitable.

For those of us in the talent acquisition business this exercise presents us with some unique opportunities.  Asking these 10 questions of our prospective clients, as part of our needs analysis process, can provide us with a great deal of information about the opportunity and positions us as a true valued partner in helping our clients grow and succeed. Helping our clients address some of these questions, will give us a much better feel for the type of talent required to implement and manage the business strategy.

Your business could have the best business strategy, one that passes the McKinsey pressure test with flying colors, but without the right people, in the right places, without top talent, without “A players” your strategy is not worth the paper that it is printed on.

And companies like ours can help find that talent.

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