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May 01, 2008

Strategic Thinking Simplified

The last time I posted an article by my friend Todd Ordal, he didn't have an RSS feed.  Now he does, so if you'd like to subscribe, here is the feed:  http://community.icontact.com/p/appliedstrategy

I particularly liked his latest post, which he's given me permission to reproduce here.  You can also read more from Todd at http://www.appliedstrategy.info

Strategic Thinking Simplified - By Todd Ordal

I snuck out for a mid-week ski day late in the season this year. It is a luxury to ski during the week because the crowds are minimal. I also enjoy skiing by myself on occasion as I can quickly cover a lot of ground and there is no debate about which part of the mountain to ski on.


After lunch I rode a lift with a middle-aged couple who looked like they were out-of-towners on vacation. (Those of you who ski a lot understand ‘the look”.) I asked them where they were from and they responded “the Detroit area”. As I had taken many business trips to Detroit, we had something to talk about.

Because much of the workforce in Michigan is part of the auto industry, I asked the gentleman if he was employed in the car business. “No”, he replied, “I was for about 20 years but now I have a construction business remodeling homes”. As I asked him a few more questions, it occurred to me that this guy—with no apparent formal business education—was a great strategic thinker.

When I asked how and why he made the transition, he said, “Well it was pretty clear to me that we were heading downhill fast. The Japanese were doing a better job with quality and building cars a whole lot cheaper. Most folks just dug in and put their heads in the sand. I didn’t see this changing so thought that I better change.” In strategic thinking terms, he had clearly identified current reality, thought about the future business environment and realized that a different strategy would be necessary for him to succeed.

I asked how he had picked home remodeling and he responded from a perspective of core competency and industry attractiveness. Those are my words; his were, “I liked building things and worked with tools in the car business, so I thought; where else could I use those skills? Homebuilding seemed the most logical choice, but I didn’t want to be on the hook financially for a large project and have all of my eggs in one basket. I’d rather have several smaller projects going at once.” In strategic terms, he thought about his funding requirements, cash flow needs and the issue of customer concentration.

He went on to say that he worked primarily on high end homes with a niche for kitchens. He liked kitchens because he noted that when socializing, everyone always ends up in the kitchen. “This looks great! Who did the work?”, they ask. More good thinking—specific customer attributes (wealthy—which allowed him to use good materials and hire good subcontractors), branding (a niche in kitchens), and a referral-based marketing plan.

So here is a blue collar guy who clearly understood the key elements of strategic thinking. He thought about the future, identified current reality, thought about his core competencies and used them to connect the dots.

Darn; this guy was smart! “So, how is it going?” I asked. “Pretty good” he said. “We’re out here in Colorado looking at different ski areas for a second home”. I think that next ski season; I’ll get out more during the week…

It's lonely at the top! Todd Ordal serves as a thought-partner to CEOs and other business leaders who are challenged to identify and manage strategy. You can contact Todd at [email protected] or call 303-527-0417.


You can also subscribe to an email distribution of Todd’s writing.  I get a fair number of email blasts, but I’ve found that I always read Todd’s no matter how many emails are sitting in my inbox.   Todd, thanks again for letting me republish one of your articles.  Speaking of the auto industry, it was nice to see that Ford has turned a profit again.  I wonder how much their Sync initiative has contributed to the turnaround?  It certainly shows to me that they get that customers want more than just reliable transportation.  -- Terry

May 1, 2008 in Entrepreneur Essays | Permalink


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