Efficiency improvement tools are deployed to achieve a strategic goal. Consultants often advise companies to deploy efficiency improvement tools like six sigma, business process re-engineering, ERP, marketing, digital transformation, etc. HR consultants focus on performance management. Efficiency improvement and performance are assisted with tools. Strategy is the overarching umbrella under which these tools lie.
Technology consulting firms emphasize automation. They often use words like strategy, efficiency, and transformation in the same breath. Each of these words is a component of a strategy. Ultimately, these providers end up convincing companies to buy an automation solution.
The strategy should help a company achieve a sustained competitive advantage. Tools are deployed to further a defined strategy. Tools improve efficiency and move the company forward. Competitors who deploy the same tools or combine these efficiency improvement tools achieve strategic convergence. It is a state where competitors operate at the same efficiency.
Customers now do not show a higher willingness to pay for the goods and services of a particular company. Services and products of competing companies are bought interchangeably. There is no preference for a specific brand. Market share in such conditions is divided amongst competitors.
Companies are often confused when faced with competing claims from various providers. Each provider claims that deploying their tools will help transform the company. Thus, digital marketers, HR consultants, IT service providers, business process re-engineering experts, and others claim to bring about business transformation.
Strategy planning helps the company break through this logjam and forge ahead of competitors. Next time a sales executive of these service providers approaches you, you know what question you should pose. Will you be able to help me achieve a sustained competitive advantage over others? If you are offering the same tool to multiple companies, how will that happen? The responses will help determine who understands strategy and is selling a tool.
Remember, your objective is to gain a competitive advantage over competitors. Tools will help you achieve operational efficiency. In a highly competitive market, automation helps, but this will only take you to a stage of strategic convergence in which the market will be split between the competitors.
Competitive advantage will require taking a look at the business strategy. In some instances, the business model may also need a re-look too. Sometimes, marketing strategy does help, but sustained business growth will require revisions in strategic plans.