IMCA recently announced its new conference and education strategy. Nearly every financial media, product, or service provider has attempted to grow revenues through organizing conferences. So why would IMCA give out its secret sauce?
It’s a good question. One of the keys to a successful strategic position is that it is difficult to replicate. Not only am I happy to share the strategy with our competitors, but I’m happy to share how IMCA defines and develops strategy. Many of IMCA’s stakeholders are instrumental in designing or refining organizational strategy for their teams, practices, small or large businesses, so maybe this blog post will prove informative and helpful.
What is Strategy
Several years ago, IMCA engaged the talents of Berkeley strategy professor Paul Tiffany, who, in his epic tome, Business Plans for Dummies, defines strategy using the ancient Greek term, “strategos,” which combines the Greek term for army (stratos) and leading (agein). Literally, “the art of generalship.” Therefore, strategy is “the deployment of scarce resources in the field of battle.” Unless you are BlackRock or CFA Institute, you probably are working with scarce resources. So a key principle of strategy is deciding how to arrange those resources to best accomplish a mission or objective. Tactics describe the Greek term for “arranging or ordering” (). Thus, the movement of resources once the battle has been engaged.
What is NOT strategy
Though certainly important, operational effectiveness is not strategy. Quality, productivity, and speed are necessary, but not sufficient as a strategy. As rivals imitate one another’s improvements in quality, cycle times, or supplier partnerships, strategies converge and competition becomes a series of races down identical paths that no one can win. “Competition based on operational effectiveness alone is mutually destructive, leading to wars of attrition that can be arrested only by limiting competition.” (M. Porter, HBR)
Keys to Success in Executing strategy
According to Harvard business school professor Michael Porter, “all sustainable strategy rests on unique activity.” A company can outperform rivals only if it can establish a difference that it can preserve—choosing to perform activities differently or to perform different activities than rivals. Deciding which unique activity will drive your strategic position is the first key to success. Porter offers three types of positioning, which also may overlap:
The second success factor in implementing a successful strategy is understanding the concept of “tradeoffs.” More of one thing necessitates less of another. According to Porter, “Strategy is choosing what not to do. Without tradeoffs, there would be no need for choice and thus no need for strategy.”
Tradeoffs usually arise from necessity. For example, inconsistencies in image or reputation may cause a company to react strategically. A company known for delivering one kind of value may lack credibility and confuse customers—or even undermine its reputation—if it delivers another kind of value or attempts to deliver two inconsistent things at the same time (e.g., Kmart and Martha Stewart; Mercedes and Chrysler; Whitney Houston and Bobby Brown).
Another tradeoff generally emerges when different positions (with their tailored activities) require different product configurations, different equipment, different employee behavior, different skills, and different management systems.
Finally, tradeoffs can arise from limits on internal coordination and control. By clearly choosing to compete in one way and not another, senior management makes organizational priorities clear. Companies that try to be all things to all customers, in contrast, risk confusion in the trenches as employees attempt to make day-to-day operating decisions without a clear framework.
Designing Strategy
Sometimes the need for strategic response arises from an external crisis. We all are familiar with how we humans respond to crisis: the cerebellum is affected and we typically react with a fight, flight, or freeze response. Because organizations are combinations of people, we react the same way. Many organizations apply this threat-and-response approach to strategic planning:
Other organizations design strategy very much the way you might design a client’s portfolio using the principles of investment theory: reduce exposure to risk by combining a variety of unique activities that (in theory) are unlikely to all move in the same direction. This approach is sound if the goal of your strategy is to reduce the risk and volatility in your business.
In designing our strategy, IMCA’s board of directors has spent a good deal of time working on its strategic position. IMCA is a professional association, by definition we have a unique position. With the rise in corporate competitors to the traditional association business model, some associations are panicking—abandoning their differentiating attributes. We are lured into trying to compete with for-profit enterprises (selling rather than serving), and we fail to recognize that members are focused on value received, and the quality of experience. (Glenn Tecker, ASAE)
IMCA Strategy
Paul Tiffany’s framework for strategy development involves first defining the (who do we serve and what do they want?); then the (who are they and what do they offer?); and finally the unique competencies of our (what are IMCA’s capabilities to serve these customers in the face of competing suppliers?).
IMCA’s strategy is to “deliver premier credentials and world-class education to advanced practitioners who want to distinguish their expertise in a global, and highly sophisticated marketplace.” We achieve this strategic position in four ways: