Page 72 - HBR Leader's Handbook: Make an Impact, Inspire Your Organization, and Get to the Next Level

62 HBR Leader’s Handbook

adding a new channel to the operations of current member stations; and
many others.

Step 4. Develop options for where and how to compete
Once you’re clear on your goals and understand your team’s current sit-
uation (both internally and externally), you can begin to identify the key
choices defining your strategy. The shorthand we’ve been using for strategy
making—“deciding where and how to compete”—reflects the two core, in-
terrelated decisions that represent your formula for making an impact in
pursuit of your vision. They will ultimately frame the kind of sweet spot of
unique and defensible value your strategy must strive to create.
Remember, as discussed in our original definition, “where” and “how”
to compete are placeholders for several more subtle themes. “Where” might
be literally geographical—a particular market in France or a specific the-
ater of operations in Iraq. But it can also signify a certain group of cus-
tomers, defined by selected demographic characteristics, or a group of
companies in an industry sector, or making a division between wholesale
and retail channels, or many other things. (Because segmentation of mar-
ket opportunity has become its own rarefied science, you may need some
specialized expertise to help.)
How to compete can refer to a product or a service, the particular mar-
kets through which you sell them, or some combination of both. “How” can
also refer to the specific approach you choose for your packaging, pricing,
branding, financing, customer service, and many other things, including
whether you do these things in-house, purchase them from outside, or ac-
quire new capabilities (see the box “Exploring make-or-buy and acquisi-
tion options”). “How” combines the “what,” “why,” and “in what manner”
that you are using to create distinctive value for your “who.” In McChrys-
tal’s military case, the how–to-compete issue turned on building a new cul-
ture of information sharing among disparate military and civilian units, so
they would collaborate better and faster to strike terrorists across the Mid-
dle East. For Winn’s American Express bank, it was the design—features,
pricing, regulatory compliance, check-writing services, interest-paying