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Part II: An HR Tactician's Guide to Strategy

In Phase Two of this series, we dive deeper into the classic strategy fundamentals. Building upon the wisdom of Professor Michael Porter, we'll explore the essential components that shape an effective strategy and drive meaningful results.

In this phase, we'll unravel the secrets of organizational effectiveness (OE) and strategic positioning. We'll discover how OE can elevate our capabilities and ensure maximum efficiency, allowing us to outperform our competitors. Furthermore, we'll explore strategic positioning as a deliberate choice that sets us apart in the marketplace, making it challenging for others to replicate our success.

Professor Porter returned to further amply strategy in his publication, "What is Strategy," where he presented ideas arranged around the company's approach. For example, Porter included creating a plan to win by assessing and selecting a market; the strategist defines success by creating goals, allocating resources and tools, and knowing how to define defeat.[i]

Before being a formidable foe in business, the strategist must master organizational effectiveness. Why? How can you be expected to be moved on a chessboard when your pieces aren't correctly aligned or have specific roles with parameters?

To have organizational effectiveness ("OE") means being substantially better at completing the essential functions of your craft than your direct competitors. This means that your OE is about efficiency, mastering your utility while reducing waste, and at the same time, creating more widgets/services faster and better than before—think maximum value at the lowest cost possible. To achieve OE, you'll need to focus on eliminating unnecessary mistakes, deploying technology, and automating tasks as much as possible to increase profitability. If you need guidance, review the MBA hoopla terms: change management, continuous learning, and other words that do the same thing—make your company leaner and better.[ii]

You can only do so much in OE before your rivals see your success (and ideas), wise up, and counterpunch.

Once the tactician guides the organization to mastery of the essentials in OE, you must participate in strategic positioning. Strategic positioning is where the organization intentionally performs its essential functions differently. While your rivals can only easily mimic, at least not with substantial changes to their business model and plan, retooling and retraining take significant effort. It can be an almost impossible task if the companies specialize in two different positions. For example, if Kia wanted to venture into the Lamborghini market, it would have to rethink its concept of luxury quality versus run-of-the-mill cars. Or, if Red Lobster wanted to specialize in classic breakfast dishes, like hashbrowns and eggs with bottomless mimosas, while it would be amazing to have bottomless mimosas, what a mismatch and confusion to their customers! 

Within positioning, there are three segments; the first is variety-based positioning, which focuses on a specific service or product, like Jamba Juice or Salt & Straw. What does Jamba Juice do? They have a line of blenders, juicers, mixes, and nothing else. Salt & Straw has an excellent assortment of fresh-made ice creams with funky seasonable flavors.

The second segment is Needs-based positioning is when a company locks in on a specific group of customers that need a diverse group of items in the right price range; think Wal-Mart, with all their products (and low prices). Or think of Chase's Private Client banking services, where you have a minimum high-worth amount of assets, but then they take care of all your banking needs.

And finally, you have access-based positioning, where companies focus on areas of geography or customer scale; think JetBlue focuses on smaller airports (like Monterey Regional Airport) to offer better service and save on costs by streamlining their operations to smaller airports.[iii]

Why must the tactician intentionally pick a strategic position? To keep rivals out by making it complicated and expensive to follow you. There are significant trade-offs (for you and them) when you specialize in the area because your business model and plan are particular to those essential functions. Whether you are a specialized fresh and organic burger joint or an electric car company, entering your arena will take a concerted effort.

Strategic positioning forces your competitors to think critically, as joining your world will cause them to become incongruent with their brand & image, force them to make significant capital investments to retool their activities, and force them to reorganize their teams for a chance at success.

The company's master plan (strategy) perfectly matches your organization's effectiveness with your strategic positioning; innovative competitors will see it and gracefully bow out and search for another market to corner.

Once you establish your corner, two cautionary points: be consistent and intentional about your focus, or you'll enter a tailspin that will confuse your intended consumers, divide your team's efforts, and waste your organization's precious resources. Imagine if The Dollar Store wanted to make high-end designer bags; consumers would cringe, and the company's teams would be completely baffled—don't go chasing waterfalls!

In conclusion, as we progress through this strategic journey, we must recognize the significance of organizational effectiveness and strategic positioning. Building upon Professor Porter's insights, we understand that organizational effectiveness entails excelling in the essential functions of our craft, emphasizing efficiency, reducing waste, and maximizing value at the lowest cost possible. By eliminating unnecessary mistakes, leveraging technology, and embracing continuous learning, we pave the way for increased profitability and sustainable growth.

However, organizational effectiveness alone is not enough. We must strategically position ourselves in the market, selecting a unique corner that differentiates us from competitors. Whether it's variety-based positioning, needs-based positioning, or access-based positioning, our strategic choice should be deliberate and difficult for rivals to replicate. This intentional selection creates trade-offs for both us and our competitors, making it costly and incongruent for them to enter our space.

Strategic positioning is not a one-time decision; it requires consistency and focus.

We must resist the temptation to chase every opportunity, as it can lead to confusion among consumers, fragmented team efforts, and the wastage of precious resources. Remember, staying true to our strategic corner and maintaining alignment with our organizational effectiveness will attract innovative competitors to bow out while we continue to thrive gracefully.

As we progress in our strategy implementation, let us heed these cautionary points and remain steadfast in our commitment to excellence. By doing so, we will establish ourselves as formidable players in the marketplace, leaving a lasting impact on our industry.

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