McKinsey Quarterly survey of nearly 800 executives: just 45 percent of the respondents said they were satisfied with the strategic-planning process. only 23 percent indicated that major strategic decisions were made within its confines.
So what’s wrong with strategy and strategic planning? Does it become the oxymoron slow to reflect today’s rapidly change, or since the future is increasingly less predictable, are we coming to the end of strategy?
The point is high-performance organizations do not follow the same strategy, they make dynamic strategy by executing them well. We would explore strategy discipline through next five fundamentals:
1. Definition of Strategy
- Corporate strategy involves a proprietary set of actions that enables a company to be worth more than just the sum of its parts.
- Strategy is also best expressed as integrated set of choices compete for the future.
- A real strategy is neither a document nor a forecast but rather an overall approach based on a diagnosis of a challenge
2. Strategy vs. Leadership:
Strategy and leadership: which is the chicken and which is the egg? Companies need take more innovative approaches to this puzzle:
The effective leaders will plan for the future by asking “what if”: which also means to identify a few critical issues at business, and then focused on actions and resources on them. The great leaders push and pull the right strategy by aligning the right culture and team to execute it.
A good strategy is beyond the well-designed template filled out with goal and vision, it should be more subject to challenges we face and provides approach to overcoming them, it’s executable. The good strategy will break an executive team out of tunneled vision, and transform into a creative, entrepreneurial and strategic perspective.
In order to shape the great strategy, the leaders may need think in new boxes, and first you need to find new boxes—new models, new scenarios, new ways of tackling a problem—to structure your thinking and to provide the framework for fresh imaginative effort.
3. Good Strategy vs. Bad Strategy
Good strategy, works by focusing energy and resources on one, or a very few, pivotal objectives whose accomplishment will lead to a cascade of favorable outcomes.
As "Good Strategy Bad Strategy: The difference and why it matters" written by Richard Rumel defines
The kernel of good strategy:
1. A diagnosis: an explanation of the nature of the challenge. A good diagnosis simplifies the often overwhelming complexity of reality by identifying certain aspects of the situation as being the critical ones.
2. A guiding policy: an overall approach chosen to cope with or overcome the obstacles identified in the diagnosis.
3. Coherent actions: steps that are coordinated with one another to support the accomplishment of the guiding policy.
In today’s fast change economic environment, global organization require a faster and more flexible approach to experiment with purpose, Agile strategy planning is a new imperative.
Michael Porter’s Five Force Strategy
A way to make the competition irrelevant by creating a leap in value for both company and its customers.
Some Bad Strategy Syndrome:
- There is missing link in the corporate strategy process, either it’s culture inertia, organizational capability or process inefficiency, usually the weakest link is people.
- The Executives equate “strategy” with static, template-driven, top-down planning, filling in the blanks with “vision, mission, values”.
- If failed to identify and analyze the obstacles, you don’t have a strategy. Instead, you have a stretch goal or a budget or a list of things you wish would happen.
4. Business Strategy vs. Technology Strategy
--What must we be able to do to reach the customer we want to attract?
--What actions might we take to win the new market?
--What are the options to move to this strategic direction? And Why?
--What does the future of industry ecosystem look like? …
In today’s digital working environment with technology savvy workforce, technology plays significant role in unleashing business potential, such as winning & retaining customers via the new digital channels ; IT also becomes the catalyst to provide the tailored customer solutions by analyzing real-time data and capture the insight; the executives also seek accurate, on-time information to support decision making, optimize business process, reduce risk and reach saving potentials. etc.
IT strategy is no longer just a functional silo strategy to “keep the light on”, or only about the annual plans and budgets, or the numbers-driven operational and cost planning, it becomes the strategy of strategy to provide the sets of choices to help business compete for the future, how to make the good IT strategy is also becoming the business imperative to effectively execute business strategy.
CIOs and IT leaders may proactively influence strategy by asking:
--Does current IT agile enough to catalyze the change business need make to compete?
--Does IT portfolio & investment focus on the most critical challenges defined at strategy?
--Do the KPIs defined really measure the values the IT projects deliver to the business?
--How can the latest technology trend help shape the innovation, optimize process and cost, reduce the risks and attract the right talent?....
5. Strategy vs. Execution
If a good question is half of answer, then a good strategy planning is half of execution. In current hyper-competitive business environment, strategy planning need be more agile and dynamic to embrace the changes and prioritize the deployment of resources more carefully, stay focused and execute it with efficiency and effectiveness.
The good strategy planning can blend top-down’s structural thinking with bottom up’s democratic opinion, to avoid the blind spots, also inspire the morale at the whole organization to execute it with passion and mission.
Execution is a discipline to get things done, and integral part of strategy. A well-defined strategy-execution-performance management system will assign accountability for initiative and make progress more transparent, measurable, by identifying clear goals and priorities, have the right people in the right bus at the right time, and frame the right incentive and rewarding system, the whole strategy-execution journey will:
- Build up the clear milestones with short, medium and long term goals
- Stretch the new thinking box to boost creativity and insight
- Create more engagement models to foster dialogue, preparedness and alignment cross the organization.
In summary, the good strategy need be constantly revisited and reviewed to adapt to the change, today’s agile business need agile strategy, with all these agile wings and good agile governance.