A Strategic Edge
Slight edge thinking is important to a successful business strategy.
Strategy starts with big ideas that are distilled to smaller actions, which with time, discipline, and focus can generate big results.
At the strategy development stage, it is important to understand that it’s very rare for businesses to dramatically outperform their competitors due to highly sought after differences. Usually, extraordinary results stem from the overall impact of a number of measurable, but incremental advantages that help the business define what products, services and markets to focus on.
Slight edge thinking when we are executing our strategy supports better performance. Everything that flows from the improved results of the new outcome is multiplied – sometimes called a compound effect.
There are challenges. Slight edge thinking involves many stakeholders, which has risks and opportunities. Although many hands make light work, the downside can be many interpretations of the same goals and that leads to different understandings about how the end state should look.
Nonetheless, a small positive change in a behaviour or action over a meaningful period can add up to a significant outcome.
When it comes to cost reduction, slight edge thinking can have a big influence on the performance of a business. From experience, we know that most employees can have greater impact on cost reduction than on revenue generation simply because most are not business generators. For instance: Cost reduction of a business activity that results in a $25 per day savings for 250 days results in $6,250 that goes right to the bottom line. Challenging each employee in a 100-person company to find $25 per day in savings could mean $625,000 in profit to the bottom line!
It also applies to those of us who are responsible for growing the top line. Here’s another example of slight edge thinking that supports a growth strategy: Understanding client needs better at the discovery stage of the sales funnel enables proposals that better match needs to value. Even if the number of prospects and proposals remains constant, we’re likely going to close more deals – leading to more business. No extra prospects or calls, just better outcomes.
Slight edge thinking and strategy go well together. Small improvements in strategy development, cost reduction, and business generation have beneficial compound impacts. Improvements in all of them are what define truly great organizations.
April 1, 2020
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