In one of my very first essays, I wrote that some companies opt out of developing a strategy for a variety of reasons. But it might surprise you to know that there are also companies that think they have a strategy, when all they have is a plan or a set of goals.
Big deal, you say, what’s the difference?
According to Richard P. Rumelt, author of Good Strategy/Bad Strategy, strategy is more than a plan. Strategy work involves “discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors”. Getting both parts right is crucial for developing good strategy, or you risk wasting precious time and resources. Having a good strategy increases your odds of success, if merely for the fact that most companies don’t have a strategy at all.
The three ingredients of good strategy
According to Rumelt, good strategy contains at least the following three elements: a diagnosis, a guiding policy, and coherent actions.
In the analysis, you examine your situation and try to distill the critical factors. What specific challenges do you need to overcome to turn your company, game or service into a success? Understanding the situation before moving on to action is a large part of strategy work.
Your guiding policy outlines the overall approach you will take to tackle the obstacles identified in the diagnosis. What are the things you will do and, just as importantly, if not more so, what are the things you absolutely will not do?
A good guiding policy tackles the obstacles defined in the diagnosis by creating or using sources of advantage – areas where your company’s resources or actions will be particularly effective.
Finally, you design a set of coherent actions that fit with the guiding policy, and which together help you overcome the challenges identified in the diagnosis.
My own strategy
To make these elements more concrete, I’m sharing my own strategy below. A few caveats before we get started:
- I am not claiming that my strategy is “good”, by any objective measure. It is simply the best strategy I have been able to identify right now, and I personally found Rumelt’s three-part framework extremely helpful.
- This strategy is specific to my situation and goals, so please don’t see this as a template to borrow parts from – they likely won’t do you much good on their own. Instead, try to follow the logic behind each part, and then identify and address your own company’s challenges in the same way.
With that out of the way, here’s my current strategy for my consulting business:
As far as services go, (strategy) consulting is relatively vague, with results that are often hard to quantify. It has a heavy trust requirement, and company leadership is required to have a good understanding of their own situation and limits, as well as the work that is involved to get the most out of consulting.
Consulting services have high adoption threshold because of high price point (and, again, hard to quantify results)
Freelance life based purely around a cycle of selling and performing is stressful and risky
Use my own name. As a one-man-company, I’m hired for who I am, not some company image I cooked up. So instead of trying to build visibility, trust and recognition for both myself and a brand I made up, I figure it’s more effective to focus on my own name.
Focus on a narrow target audience. The narrower your audience, the easier it is to create a value proposition that really resonates with them and their experience. A narrower focus also allows you to do more focused sales and marketing. So here’s where I landed:
Leadership of European SMB companies in games industry
Let’s break that down:
- Leadership. These are the decisionmakers for high-level consulting work
- European. Couple of reasons for this. Most European companies share (to some degree) common frameworks of business and management. The US does too, bit having a kid and the schedule that comes with it makes the time difference harder to facilitate for me. Asian companies tend to work differently, and although I have some understanding of this, I’m not entirely sure yet how my expertise would apply.
- SMB. I’ve thought long and hard about the best way to help indies and startups, but the truth is that I’m not the best fit for most of them. Indies and startups are too chaotic. They’re focused on surviving rather than thriving, and usually have little use for formal management or strategy support. Big corporates, on the other hand, have problems that I don’t understand well enough (yet), and will hire bigger agencies, possibly even Big Five. SMB’s are in a sweet spot where management and strategy have to be made a priority for sustained success, making this slice of the industry the best fit for my particular brand of consulting, where I can make the most of both my MBA education and my own diverse experience in the games industry.
- Games industry. Focusing on the games industry lets me lean on 12+ years of personal experience in the industry. It also means that I can turn to the network I’ve built in that time for work.
All of my efforts are focused on this target audience. Of course, if any companies outside of this focus area want to work with me, they are more than welcome as long as 1) there is a fit (i.e. they are serious about running and growing a great company), and 2) if there is room in my client portfolio.
Build slowly, based on trust and word-of-mouth. Doing a bunch of cold outreach to potential clients probably won’t work well because of the trust requirement. Better to do good work for a handful of clients, and gain new clients either through direct referrals, or because they have heard good things.
Offer portfolio of solutions at different price points. Having multiple products/services/income streams gives the greatest potential for breaking out of the selling/performing loop freelancers often get locked into. Offering these products and services at various price points allows companies to become clients even if they can’t confidently spend thousands of dollars on management or strategy support.
Share knowledge and insight into the problem and solution space encountered by my target audience. Externally, sharing knowledge builds trust and visibility with my target audience. Internally, putting my ideas and experiences to paper forces me to examine what I *really* believe to be true. The more I sharpen my ideas, the better the services and products I eventually turn them into.
Send a bi-weekly newsletter exploring the challenges of running and growing a videogame company, and how to address them. This lets me breed familiarity with both the problem space, solution space and myself. It also gives me a channel to occasionally promote a product or service. The Linkedin newsletter functionality has proven to be a wild card here, growing much faster than my self-hosted newsletter was.
Find 5-10 clients in my existing (Dutch) network, and get testimonials. My Dutch network is closest, and they are the best judges of my skills and experience. Doing good work for them has the greatest chance of setting me up for success in the long run, both by gaining testimonials and recommendations, and by ironing out any kinks in the services I offer.
Define standalone products, built on experiences with early clients. Ideally, my portfolio will consist of a few different brackets:
- Free. Stuff I can confidently give away, like my essays and some templates.
- Cheap. Small items that cost a couple of bucks, like Better Book Notes for Busy Game Professionals, larger templates or an e-book (if I ever decide to write one).
- Mid-price. Products that are a couple hundred bucks. Most likely I’ll do one or two self-paced courses based on my consulting practices that will fall into this category.
- Premium. My main services of management and strategy consulting.
Having a portfolio like this allows me to spread my income and makes me less dependent on high-ticket consulting engagements, while at the same time reaching a wider audience. Experiences from client engagements will allow me to further finetune these products, creating a nice feedback loop.
Visit conferences that attract my target audience. Rather than cold email a bunch of prospects, I prefer to meet people face to face wherever possible because you can build trust and intimacy better that way. That means visiting conferences, which I’ve narrowed down to three for this year:
- INDIGO. This one was mostly to reconnect with my Dutch friends and colleagues in the industry, whom I haven’t seen in over 2 years. That said, I was pleasantly surprised by how many people expressed interest in my services, so it definitely feels like I’m on to something here.
- GamesCom. This is the largest EU conference, making it the most important conference for me to reach my target audience.
- REBOOT Develop Blue. I’ve never been to this one myself, but I hear it attracts mostly people in leadership positions. I’m *very* excited about going here. Not even so much to sell, although I’m hopeful about gaining some leads, but mostly to be able to start a dialogue about how people are managing their company and how they are forming their strategy.
And that’s my strategy in a nutshell. Of course, there’s more detail to most of the actions, but hopefully this gives you some idea of how you can use this framework to develop or tighten up your own strategy. If you have any thoughts, suggestions or critique, I’d love to hear them, and good luck!
Here are some next steps you can take if you like what you’ve just read:
- Subscribe to my newsletter to get new essays just like this one straight in your inbox, every two weeks on Tuesday.
- Read Good Strategy/Bad Strategy by Richard Rumelt for a much more comprehensive look at what makes good strategy good, and bad strategy bad
- If you’re struggling to put together your strategy, I can help. Whether you’re looking for ad hoc advice, monthly sparring sessions or want me to get hands on with your strategy, I’m sure we can find a form that fits your needs. Schedule an introductory meeting through my calendly page and let’s see if there’s a fit!