Strategy is about what NOT to do in a system as a whole

Growing within your strategic positioning.

In the first part of this article about Michael E. Porter’s paper What is strategy? I summed up the different strategic positionings. Although positioning is essential for a future proof business, it is not enough. To keep competitors away from copying you and to strengthen your services and products, you have to say no to misleading temptations, you have to make trade-offs. Use your positioning and value proposition as a helpful constant. Align the individual activities and combine them to create an outstanding and unique user experience with your product or service.

Once I tested the concept for a new product with potential customers, where a finance institute wanted to find out if they can differentiate themselves from competitors through a gambling-like information system about credit offers. It came out, that users would have never ever used it and the brand of the institute would have suffered – at least in Germany. Although the idea was worth thinking about, gambling and banking did just not fit together for their customers. The core finding was just to say no about it and the institute finally dropped the idea (luckily they tested it before).

If you build high quality products and you start with low-budget offers, your credibility suffers. The opposite is also true: If you focus on lower cost, it would be hard to produce higher levels of service. IKEA would not be able to just switch to high-quality, not only from a brand credibility perspective but also due to the fact, that their production lines are tailored for different activities, serving a different strategic positioning. Although it would make perfect sense from a growth perspective to address a different market segment, the sneaky part about it is, that you would notice the wrong direction not immediately, but rather late, maybe too late after investing too much effort.

Everything matters – Strategy and User Experience is about the whole system, not just a collection of parts

With a strategic positioning and making trade-offs accordingly, you can enhance uniqueness by combining activities, so that they reinforce one another. Your activities have to fit.

A consistent experience across channels and devices, from online to offline or vice versa is only possible by aligning activities to each other.That is why companies divided into different departments or “silos” that specialize in one function, have a tough life in delivering coherent products or services. Those companies usually have a vertical line of command and the bits and pieces of each department are well designed, but they are perceived as individual touch points and not as a whole.

The division of the silos makes sense to the business units, but makes no sense to the customer, who sees the entire offering as one experience.
Service Design, Andy Polaine, Lavrans Løvlie & Ben Reason (Rosenfeld)

Apple is a good example for doing it right. They not only have the differentiation in their slogan (think different) but they make their activities fit each other, amplififying the experience. From their offline shop experiences to different hardware devices and digital services: everything goes hand in hand, is perceived as one – it builds upon and reinforces each other. Services such as the AppStore and the iCloud are the bridges between different services, aiming for a seamless experience. As another example, Google. Google+ reinforces the value of search results, making them more meaningful to the user. They are working hard to make their individual (acquired) services fit to each other, to make it an extraordinary experience, which would be nearly impossible to copy.

There are three types of fit, not mutually exclusive:

  • Consistency between each activity and the overall strategy
  • Reinforcing activities
  • Optimization of effort and eliminate redundancy

A sound strategy is undermined by a misguided view of competition, by organizational failures, and, especially, by the desire to grow.