How is your strategy?
It’s a word that has been in our business vocabulary for decades. As directors we are tasked to construct a strategy for our companies that takes into account a number of factors such as market shifts, technological advances, customer needs and of course our own ability as an organisation to join these things up to provide a trading framework for profit, performance, productivity and shareholder return.
But it cannot stop there. Plenty of boards have constructed exciting, innovative or market owning strategies and documented them for execution, still to fail over time. The problem, then, is twofold.
Firstly, the strategic direction fails to be updated in the face of new or continually evolving technologies or customer requirements. Those responsible fail to look ahead and plan out responses to new information, new technology or disruptive working models that threaten to strip away their trading position in a remarkably short space of time. Disruptive models and technology can change the game for businesses and create entirely new products and services as well as reforming whole supply chains.
The board must continuously anticipate and form multiple plans to respond to new challenges. Prior assumptions and often tried and tested business models may have to be abandoned as entire markets come under pressure or are attacked by competitors or new market entrants.
This means intelligence within the organisation must be brought to bear on a regular basis to ensure a rapid response and protecting the business as it moves forwards.
The core of the strategist’s work is always the same; to discover the crucial factors in a situation and design a way to coordinate and focus actions to deal with them.
And so we come to the second part of the problem. In asking you the question, “where does strategy end and operational execution begin?” the answers are often unclear. That is exactly the right answer of course, as to have no defined boundary between strategy and operations is the best situation of any organisation.
The issue is that in working with hundreds of companies, large and small, rarely do I find that the company has developed a system for doing just that. Strategy exists in isolation and is contained as a board room discussion.
Yet it is the people and processes within your company that are being asked to understand it, translate it into action and then execute with focus and determination providing feedback in diluted and honest to allow for improvements.
A company who discovers a robust and repeatable system for doing this will outperform those who don’t, every time.
In making it possible for your strategists to think operationally, and for your management and teams to think strategically, you will have found a way to be flexible, active in managing constant change, and will have installed an approach that can twist and turn with your markets, respond to your customers and protect your shareholder value.
So how is your strategy? Or should I ask, how are you directing your strategy, using your teams to bring about true competitive market advantage?