The Hindu Business Line : Goals are like dreams, so wake up and face reality

SURVIVAL, perceptions, being different, competition, specialisation, simplicity, leadership and reality. This is what strategy is all about, Jack Trout says in Trout on Strategy, published by Tata McGraw-Hill Publishing Co Ltd (www.tatamcgrawhill.com). The book is about "capturing mindshare, conquering markets", and pity those who don't have the right strategy because they're `toast'.

One more book on strategy, oh no, do I hear you say? "There has been no shortage of advice on this subject," writes Trout in his preface. "In the past 30 years there have been 21,955 books written about strategic planning and marketing." Now, hear the author's definition of strategy: "What makes you unique and what is the best way to put that difference into the minds of your customers and prospects."

Choice is daunting. "An average supermarket has 40,000 stock keeping units (SKUs)," informs Trout. "An average family gets 80 to 85 per cent of its needs from 150 SKUs. That means there's a good chance you'll ignore 39,850 items in that store."

Lesson one, therefore, is to realise that customer has so many good alternatives that you pay dearly for your mistakes. "Your competitors get your business and you don't get back very easily."

How do people handle product explosion? They rank products and brands in their mind, says Trout: A series of ladders in mind with a brand name on each step, and there's a ladder for each product category. "An advertiser who wants to introduce a new product category must carry in a new ladder."

Strategy involves being different. "If you don't have a point of difference, you'd better have a low price." To think that in the long run the better product will win is an illusion, observes the author.

"History, be it of military and marketing, is written by the winners, not the losers." Be customer-oriented. Also, be competitor-oriented. "Look for weak points in the positions of the competitors and launch marketing attacks against those weak points."

In strategy, specialisation is important because "people are impressed with those who concentrate on a specific activity or product and perceive them as experts." This is the counter to "larger, unfocussed, we-do-everything competitors." Most marketers don't like to be locked into one business or specialty, points out Trout. "As soon as they head out to be something else, they open the door for another company to become the specialist."

Simplicity doesn't appeal to imagination, but complex strategies are "usually doomed to failure".

Trout emphasises: "Simple ideas tend to be obvious ideas because they have a ring of truth about them. But people distrust their instincts. They feel there must be a hidden, more complex answer. Wrong. What's obvious to you is obvious to many. That's why an obvious answer usually works so well in the marketplace." Business keeps inventing new jargon to confuse, without realising that "big strategic ideas almost always come in small words." Don't forget that a good strategy needs an effective leader. Direction alone is not enough, cautions the author. "The best leaders are storytellers, cheerleaders, and facilitators."

Towards the end comes the need for `reality' in strategy. "One CEO sends periodic e-mails to 30,000 employees asking for feedback. Another has regular video-conferences where he carefully delivers the same speech over and over so as not to send mixed messages. And then there's the endless plane travel, whereby a CEO can easily log over 150,000 miles a year." More alarming is the trend of CEOs spending too much time for PR and investor relations. "Goals are like dreams. Wake up and face reality," is Trout-speak. CEOs who haven't got enough time to get involved in important decisions find problems coming back "to bite them later".

One more book of `stroutegy' to help you in case you're still struggling with strategy.

ManageMentor@TheHindu.co.in

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