The word strategy gets thrown around a lot.
I think most people imagine strategy as a clever plan that allows them to get everything done, or perhaps a unique combination of technology that delivers below-average labor costs.
That’s not a strategy. That’s tactics. Strategy is what you do (or don’t do) and tactics are how you do it.
My all-time favorite quote on strategy is this: “The essence of strategy is choosing what not to do.” – Michael E. Porter
As property managers (PMs), deciding on and executing a strategy is fiendishly difficult because we are in a service industry. We’re here to solve the customer’s problems, right? It seems counter-intuitive and uncomfortable to suggest saying “no” to our clients, especially if their requests are reasonable. So what’s a well-meaning PM to do? Let’s dig in.
The best breakdown of strategy I’ve seen is this, from my friend Jon Matzner:
he Value Disciplines Model
The Value Disciplines Model is the brainchild of Michael Treacy and Fred Wiersema, from their book, “The Discipline of Market Leaders. It’s about finding your strategy as a business and focusing on doing one thing really, really well.
There are three main strategies to choose from:
- Customer Intimacy (Focus on Service): Customer intimacy is about getting to know your customers on a deep level and making your products or services to better serve them. Think Lululemon – they own a range of products that serve the same customer, which is affluent upper middle class, active men and women.
- Product Leadership (Focus on Innovation): This is the strategy for innovators. This strategy is all about delivering the next big thing before anyone else does. Companies that employ this strategy live in the future; think Apple or Tesla trying crazy shit and hoping it works.
- Operational Excellence (Focus on Cost): The tortoise in the proverbial race, businesses with this strategy are all about efficiency and cost-effectiveness. They might not be flashy but their stream-lined operations and wallet-friendly prices endure. Ever wonder how Walmart and McDonald’s can keep their prices so low? It’s operational excellence.
So, how can you use this framework to think about strategy in the context of delivering PM services, and what might you “not do” in order to be successful with each one?
Small business lessons from inside a growing property management company by Peter Lohmann.