Strategic Depth is a concept from military strategy that refers to how deep your defenses are at the weakest point. It can also be seen as asking what the quickest path to an opponent’s soft inner core is. Sometimes this weakness may not be obvious to you, like how taxis probably never saw Uber coming. Let’s think through your business’s strategic depth.
1. Think about your core
What is the one thing that your business cannot run without? What is the lifeblood? What do you have that lets you charge money, the thing that others want? It could be a certain type of customer you rely on who’d go elsewhere given a better option. It could be supply, like a certain material, resource, or product you have access to. It could be the one thing you do really well. Or, for many businesses, (especially small ones) it’s likely a person or certain relationships.
2. What currently protects your core?
What are some things keeping your core at work for you? If someone wanted to take it or disrupt it, what would stop them? Some of the best defenses include how you treat key employees, customers, vendors, and contacts; your name and brand; contracts (or regulations) that protect your advantages; intellectual property; your lead and/or speed over the competitors; other specialized competencies and experience; size/cost of entry for competitors.
3. Think like the enemy
What is the easiest way to get to your core? Which of your defenses is weakest? What way in is unprotected? Remember the Nazis went around the Maginot line, not through it. What if the “attack” is unexpected: a customer you trust took your info to a competitor; an employee decides to break something pivotal over a misunderstanding; suppliers enter your business; a tech startup with big bucks creates a whole new business model?
4. What could you do about it?
Create several ideas before you focus on the most important. If you need ideas, try creating 3 types of plans:
- How you’d absorb the blow and adapt – these plans may involve contingency plans, or they may be more about diversifying your business to make your core less pivotal and fragile.
- How you can weaken or completely prevent the blow – these plans include strengthening defenses to keep your core more protected and loyal, or ways to make it more costly like improving your security and contract/legal protection.
- How you can attack to keep threats at their heels – moves you might make in the market like acquisitions or partnerships (the threat or their competitors), competitive moves like pricing or marketing, or strategic moves like regulation or litigation.
5. What should you do about it?
How big is the risk? When is the perfect timing? Will other plans already take care of it? Which of your ideas is most valuable? Every business is limited by costs, resources, or at very least time and focus. Therefore even the best ideas you might have just generated to protect your strategic depth may still not be worth pursuing when compared with your other current goals and opportunities.
So there you have it – in just a short thinking exercise of 5 steps, you’ve looked at your business through the lens of military defense (or attack!), and hopefully you now have an eye toward what to watch for, if you need to fortify, and how you can. While I don’t recommend proactively attacking your competition (I think there is enough business to go around, and if you focus on them you are not focused on customer), it may be a useful exercise to think about other company’s strategic depth, how they are vulnerable, and how they could defend. “Attacking” another business is far more risky, and far less fruitful/valuable than providing customers a lot of value, but taking a look at another business from that point of view may really open up creative ideas for your own strategy.
Finally, I suggest returning to this exercise every few months not only because your business/competition/industry might change, but also because as you think, learn, and experience new things, you might come up with new creative ways a competitor might attack or you might defend or diversify.