A retired president of a Fortune 100 company provides effective advice on how to develop strategic-thinking capability and rapidly advance in an organization.
Ask any executive what he or she considers the most important skills for team members who aspire to leadership roles, and you will get answers ranging from clear communication to collaboration to adaptability.
During my career, especially as the president of New York Life Insurance Company, I found that many executives and aspiring leaders sought the opportunity to gain the experience of running a business, often stated as “running a P&L” (profit and loss statement).
Even in a large company, there are typically fewer positions than there are team members who are eager to run a business or department with P&L responsibility. I believe the most important criterion for ascending into these roles is the ability to think strategically. Yet strategic thinking isn’t a skill that’s traditionally taught in universities or management training programs.
Throughout my career, I mentored many employees at all levels in the organization. Over time, more than 10 of them ultimately became CEOs or presidents of their organizations. A key factor in their success was the development of strategic thinking capability.
So, what is strategy, exactly?
The word strategy was originally a war term used to determine the means by which a combatant would defeat the enemy. In general, strategy as it relates to business is how to beat the competition in a way that achieves sustainable competitive advantage.
Many employees — and even some executives — don’t understand the difference between strategy and tactics. Strategy is how to leverage a company’s core competencies to achieve its objectives and create sustainable competitive advantage. Tactics describe the specific actions that will be taken along the way.
There are three steps involved in developing strategic thinking capability.
The first step is to understand your own company’s strategies.
One easy way to do that is to read your company’s annual report and most recent strategic plan. The annual report typically touches only generally on the corporate mission and strategies. The strategic plan is more likely to contain an in-depth analysis of the company’s strengths, weaknesses, opportunities and threats.
Also, if your company has publicly traded stock, read the periodic reports of the analysts who follow that stock. There you can learn a lot more about the external view of your company’s risks and opportunities and how it fares against the competition.
Read recent articles and press releases. These documents, often available online, can uncover a company’s recent actions in the way of mergers, acquisitions, partnerships and other potential strategic actions.
The second step in becoming a strategic thinker is to understand the competition.
The easiest way to do this is to review competing companies’ websites. Next, follow the same steps you used to research your company to research key competitors. Read as much publicly available material as you can. Try to obtain their strategic plans for the future.
Also, mystery-shop the competition. If you really want to take your due diligence up a notch, and your business is in retail product sales, purchase some of the competitors’ products and compare them against comparable products your company sells. For large or expensive products (like automobiles or appliances), at a minimum, come to understand your company’s product differentiation by reading product manuals, marketing pieces and press releases. If they seem superior to your company’s offerings, determine what the competition is doing to gain that edge.
Finally, get acquainted with your company’s distributors. They are out in the field, talking with your customers. They are likely to hear opinions about your competitors’ products and services — specifically about features your competitors offer that your company does not. Ask them what aspects of your business offerings that they would like to see expanded or modified.
The third step in becoming a strategic thinker is getting your superiors to notice your newfound knowledge and your strategic-thinking capabilities, which may give you a leg up in landing a role with the responsibility of running a P&L.
Now, knowing your company’s and its competitors’ strategies is great, but it doesn’t necessarily demonstrate strategic thinking capability. So, once you have gained valuable knowledge by completing the steps just mentioned, thoughtfully consider the following questions. The answers to these questions will lead you to demonstrate a strong strategic-thinking capability:
How does my company currently differentiate itself from its key competitors? What do we do differently and/or better than anybody else? Can we build on that, and if so, how?
What unique products, product features or benefits does my company have that others don’t have? Are there others we should be considering? Are there consumer needs or desires that my company and/or its competitors are not currently meeting? What can we do to meet those needs? If we fall short in some areas, what types of cost-effective investments can we make to improve significantly in those areas?
How do our advertising, marketing and branding stack up against the competition? How can we improve in this regard? Are there market segments that our competition is not adequately penetrating that we can effectively expand into?
From a competitive employment perspective, how do our compensation and benefits compare to those of our key competitors? To what extent do we need to step up our own compensation and benefit packages to better compete for top talent?
If you have done your homework, asking yourself these questions and then answering them should reveal many previously untapped ideas that will help your company create sustainable competitive advantage. A thoughtful exercise like this is highly strategic. The answers you come up with could lead to potentially new and expanded strategies for your company.
As you communicate your thoughts and ideas to your company’s management team, they are likely to recognize you as a highly strategic thinker with high potential for more senior roles in the organization. And that is the best way to land that “P&L” job.
Fred Sievert is a retired president of New York Life Insurance Co., a Fortune 100 company. His passion is positively impacting the lives of others by writing and speaking about his faith and business experience. His most recent book, Fast-Starting a Career of Consequence, is available on his website.
Did you enjoy this post? If so, I highly encourage you to take about 30 seconds to become a regular subscriber to this blog. It’s free, fun, practical, and only a few emails a week (I promise!). SIGN UP HERE to get the thoughtLEADERS blog conveniently delivered right to your inbox!