Sunday, January 6, 2013

Will You Take the Right Strategic Approach in 2013?

The global recession has effected organisations differently across different industry sectors, while in different stages of their business life-cycle and operating in different markets; but a key question is, “are you approaching your organisational strategy for 2013 from a clean sheet of paper perspective or simply adding to your past strategic discussions?” - where if the latter, don’t be surprised if cracks start to appear in the foundation of your planned future.
Strategy is a core activity that if developed and implemented correctly drives the organisations future growth, as well as the functional strategies of sales and marketing, operations, the human resource, finance, IT etc; so it’s worth doing it right and giving it the attention it really deserves.
As Kathryn Hopkins, Economics Correspondent of the Times highlighted in a recent article, “fears are growing that Britain’s beleaguered economy is on the verge of going into an unprecedented triple-dip recession after the country’s dominant services sector suffered its first contraction in two years.” This on top of the US spending too much time on political positioning rather than fixing their horrendous level of debt, which could lead to a further meltdown in the US economy, remembering that over 46 million people are already below the poverty line according to the 2012 census.
There seem to be three distinctive styles to approaching strategy – the passionate futurist approach; the we’re okay as we are approach; and the ostrich approach.
The passionate futurist is someone who knows that strategy plays a key part in defining their organisations future, where they just don’t want to be ‘part of a future’ but want to be part of ‘creating the future’ for their industry. They have strong, professional leadership skills and know that everyone in their organisation has something to contribute to the organisations future and want to hear what ‘they’ think the opportunities and threats are to the business. They will always start each year’s strategic progrmme from a clean sheet of paper perspective, where all assumptions and facts have to be re-checked and nothing can be taken for granted; and they appreciate that the final strategic outputs will be defined by the integrity of the analytical inputs to the process. Far from being nervous about bringing in outsiders to facilitate the strategic development process and support the implementation process, they appreciate the importance of bringing in the right ‘outsiders’ that have no pre-conceived ideas about the organisations future and who will ask those often simple but business changing questions and facilitate the process from start to finish.
The “we’re okay approach” is way too common, where the leadership are ‘happy’ with how things have gone and are currently going. Strategies are less formal and often comprise of the famous ‘strategic weekend’ when the focus is on regurgitating common assumptions about their industry, customers and competitors. The CFO will give an appraisal of the financial position which looks good to average before they meet their wives for a lavish dinner to say thanks to the executive team. They then go back to their organisation and again, if you’re lucky, there will be a communication session to the whole organisation; more likely it will be left to the divisional managers to ‘do their own thing’ with their staff (which is where strategic confusion often starts, with a different emphasis being put on the future by different executives). They approach outsiders with scepticism (which can sometimes be well placed, based on bringing in ‘wannabe’ strategic specialists, who just managed to alienate the whole top team and send them down an expensive path to a fancy 100 paged document no one understands and which has no strategic meaning). Unfortunately though, this do-it-yourself approach loses out on the real reality check of the business and the real opportunity to optimise their businesses future growth. While they stay ‘okay’ things just tick along and they’re happy following the market leaders. Of course the down side is that without the clean sheet of paper approach they often miss opportunities (they didn’t even know about) and are often totally lost when the business starts to fail or the market changes significantly.
The ostrich approach is applied by the leadership of organisations that can be either too arrogant or too scared to truly embrace their own weaknesses about business. Strategy to them is a boring concept invented to make other people rich rather than having any practical place in business – where either, what they don’t know about their business isn’t worth knowing or what they don’t know about business is too scary for others to find out. They do have ‘business’ visions, which they tell their executive team about but often lack the reality check on their business environment. When things start to go wrong they blame the executives in change of the failing area or areas; and as such they often have a high staff turnover at all levels; but in an economy where supply of labour outstrips demand always find someone else to fill the ‘void’ and to be held accountable. Many of these organisations will close over time, but the leaders have often amassed sufficient savings to not only survive but not to recognise that they failed the business and their staff, often believing themselves to be competent leaders and entrepreneurs.
The final category may sound quite harsh but strategy is about optimising an organisations future, through strategic outputs that influence products and services; target markets; pricing, costing, expenses and investments; the human resource and it’s development; customer relationship management; management control systems etc; which can only be truly optimised if, firstly, the organisation uses a rigorous and proven strategic process and secondly, if the inputs are honest and legitimate, since errors in the validity of the inputs will lead to erroneous outputs and strategic plans that have significant errors which will lead to suboptimal solutions.
Organisations should take the time in 2013 to complete a comprehensive strategic development and implementation process, ensuring that they are optimising their organisations future and bringing in the right people to help facilitate the process. Anything less could be considered irresponsible in these difficult times.

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