Renaissance Growth Advisory

Ready for the next tip on how to become a (truly) good strategist? Here we go:

Lesson # 3: Be clear on what 'winning' means.
The route chosen must be the one that promises to give the truly good strategist a higher rate of return than competition. Many sensible managers and entrepreneurs make the mistake to define winning as selling more than competition, having more market share or generating more profits. These definitions, while tempting, are myopic. Only by gauging success through the lens of rates of return will you know if your enterprise is worth the effort and the investment. What good is there in selling, say, +20% more than your competitor if it costs you +30% more to sustain those sales? What is the long-term benefit of having a business that yields, say, +20% more profits than a competitor that, in turn, requires -40% less working capital? Only by measuring rates of return will you know if you are truly generating wealth. And only by generating rates of return higher than the average of the industry will you know that you are grabbing more of the wealth available in your industry.