Business strategy: make or break

 

Declan CurryA seasoned journalist and former BBC business broadcaster, Declan Curry has interviewed the leaders of many of the UK’s biggest companies, and Britain’s most exciting entrepreneurs. Here he shares his insights on what makes a great business strategist.

When we talk about good business strategy, what we’re really asking is what makes one company successful and another unsuccessful? Although a wide variety of factors contribute to business growth, a strong, strategic leader can quite simply be the difference between success and failure.

What I have observed in my years interviewing business leaders is that there are some common factors that empower them to excel. An unbeatable product or service is the first. This doesn’t have to be unique, but it has to offer something over and above the competition – either in terms of quality, price, value or delivery. And having the right people with the right skills to deliver it is just as crucial.

Great leadership is about pulling these elements together. It’s about knowing your customer and shaping your strategy to deliver exactly what they want. It demands an assertive personality, but not a rigid one. A successful company needs a flexible leader who isn’t afraid to change with the marketplace and adapt their strategy to suit customers’ evolving lifestyles.

An inspiring example

For me, Ryanair Chief Executive Michael O’Leary stands out as an interesting example. What I find fascinating is his total renunciation of the idea that the ‘customer is always right’ – one of the holiest phrases in modern business. Of course, many companies secretly don't believe it, but in public they pretend to be true believers in the religion of customer delight.

Michael grew his business by delivering the lowest possible prices whilst securing the highest possible profit margin, even if customers have to endure some inconvenience. And he knows that, by and large, they don't take their business elsewhere. We might be told that customers want service, but their decisions show they often care more about price.

Michael O'Leary took that one insight, reconfigured his entire business around it, and transformed the entire industry too; forcing airports to restructure their operations, forcing longer-established rivals to rethink their position, forcing us to rethink what we expect from air travel – and making him Europe's airline king for more than a decade.

Looking to the future

Michael O’Leary initially didn't pursue customers who prioritised service – but his position has changed. The twist to the tale is that Ryanair now wants those customers after all, and is reinventing itself as a more caring Ryanair to win new business. What’s clear is that strategic direction needs to be subject to constant scrutiny – and the strongest leaders are ready to adapt.

While the importance of good leadership is clear, what transforms a good leader into a great business strategist is the ability to see windows of opportunity – often where others can’t – and take calculated risks.

For mid-market businesses in the UK searching for growth, one such opening is the move into overseas markets. The opportunities for British companies in fast-growing global markets are immense, but there are also risks which business leaders must consider. Bold is one thing, reckless is another.

To take a successful British business and recreate that success overseas is not a ‘copy and paste’ project. It takes real planning skills. To succeed, you need a confidence in your supply chain; local banking partners you can trust; you need to ensure that your goods will reach customers unadulterated; that your customers will pay you for those goods; that you can repatriate any profits – and the list goes on. As such, it’s easy to understand why some businesses, with a good domestic operation, might see geographical expansion as too much of a gamble.

Proactive planning

But deciding to limit your company’s footprint to the UK ignores another big risk: in the age of the internet, a competitor isn’t just a company on the other side of the street; it’s a company on the other side of the world. Even if you are not exporting into growth markets, companies in those markets will be exporting into Britain, and selling to your customers. Globalisation cannot be ignored, so an ability to see your market in its broadest sense is essential.

In short, the greatest strategists are those who recognise that doing nothing is not the safe option. Businesses don’t move forward by standing still.

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