There are many things in an organization that a leader can and should relegate, but when it comes to strategy, the buck goes nowhere. It is the leader’s prime imperative to ensure the organization has a sound strategy that will guide the company to its desired future. A good strategy involves a strong vision of where your organization needs to be in the next three to five years, and a clear mission that brings everybody together on the company’s reason for existence. One thing that’s often missing however, is a clear understanding of the organization’s driving force.
Your company’s driving force brings focus to your competitive advantage. It informs all the functional parts of your strategy including your offering/market mix and the key capabilities that will need to be built to support your vision. A company with an unclear driving force will typically commit valuable, scarce resources behind products, services, and markets that are antithetical to its vision. When this happens, there’s no chance for the organization to grow properly, and they unnecessarily expose themselves to more strategic competition.Nine Strategic Areas of Driving Force:
Source: Kepner-Tregoe, Inc.
The concept of a driving force, originally pioneered by Kepner-Tregoe, Inc., may be confusing at first, but it’s absolutely vital to the company’s strategy. Where a vision anchors the company into the future, the driving force cradles the company in a decision-making frame, reinforcing decisions in alignment with the company’s strategy and flagging decisions that are out of alignment with the company’s strategy for challenge.
Although there are nine different driving forces, the two most commonly seen in Corporate America today are offers and markets. An offer-driven company focuses on creating breakthrough products, services, and relationships (collectively called offerings), and constantly explores markets that are best served by its offerings. An example that comes to mind is BMW, who competes in the marketplace on the basis of superior craftsmanship of its vehicles.
A market-driven company competes by knowing a particular market extremely well. It then proceeds to develop a variety of offerings that complement their market. An example would be American Express, who knows the luxury market extremely well. And although their primary offering may be their credit services, they also cater well to their market with luxury travel offerings, private invitations to exclusive events, and the cachet of the black Centurion card.
A less common but interesting driving force is information. For those astute leaders who are already familiar with the concept of driving force, this is not a new strategic area, but a specific subset of the technology category, that has outstanding implications in today’s marketplace. Information-driven companies specialize at mining and cultivating data into wisdom. They are well-educated on the synthetic evolution of data to information, knowledge, then wisdom; and exploit this capability for competitive domination in the marketplace. Google and Facebook are terrific contemporary examples of companies that understand how to leverage their breakthrough information technology into amazing business success.
Although it’s not quite intuitive, once your driving force becomes clear, the rest of your strategy will fall into place much easier. Once a driving force is determined—and more importantly, uniformly understood within your executive ranks—deciding on innovation balance and target markets becomes quite clear. This is one of the most elusive, critical decisions the top leader—and only the top leader—can make. If you’re not driving the company, then who is?