Setting the Strategy
Given increased customer sophistication and expectations, and a generally more competitive landscape it comes as no surprise that setting and implementing a successful strategy has become more difficult. We observe that the shelf lives of strategies have diminished and that the tenure of executives at the top keeps decreasing.
Nothing in business is forever and nothing should be taken for granted. Only a few months ago in the UK just about every stock market analyst was praising the business model of Northern Rock. Enough said.
You might find these ideas helpful:
Does everyone share and understand the vision? I get concerned when I hear the following from Chief Executives…” MY vision….” This could suggest that it is one person’s vision. This can work as entrepreneurs show us all the time but there is a real danger here that the rest of the organisation is not on cue. Do people really (but really) understand the overall sense of direction? Why not ask them to put in their own words THEIR understanding of where this organisation is supposed to be going?
Be wary when financial targets become the vision e.g. our vision is to be a FTSE 100 company by year X. This is a result and not a vision. The danger here is that every single decision becomes corrupted by that end financial goal. Executives effectively become fund and investment managers e.g. Marconi, Worldcom.
Process; what process is in place for strategy creation? Is there widespread democracy in that process or it is the sole preserve of the Board and/or a team to put the strategy together? Would the process stand up to scrutiny?
Are you hearing bad news? If not why not? It is inconceivable that even in the best-run companies things do not go wrong. Is bad news being shielded from you? Billy Connolly the comedian often remarks that Her Majesty the Queen of England seems to think that England smells of paint because the chances are a few days before her visit the painters and decorators have been hard at work to make the place look pretty! Are you seeing the true picture?
Benchmarking; be aware of the limitations of this exercise. The ultimate result of benchmarking is perfect imitation, no more! Your most dangerous competitors are the ones just like you because the ultimate arbiters, i.e. the customers, cannot distinguish between your offerings and services and those offered by your competitors.
It is healthier to benchmark outside of your industry. There is far more learning there. There is very little you still have to learn from your industry. Avoid the ugly baby syndrome as well, i.e. no one would ever dare tell proud parents that their newly born is ugly! So seek a truly objective audience to bulletproof your strategy.
Be wary of strategy consultants! The role of a consultant during the strategy creation is to make sure that the right conversations take place, that proper tools and processes are used, that your thinking and suggestions are constantly questioned, that all aspects (and people!) get a fair hearing etc, they cannot and should not be allowed to set your strategy for you. This is insane. What could they possibly do for you that they haven’t done for your competitors?
New competitors are bastards! They don’t play by the same rules and as a consequence the discussions need to take some different directions. Ask the following, what is the nature of the competitive terrain? Who else could enter this industry? What will this industry look like in a few years time? What is the craziest thing that anyone of our competitors could do?
And finally! Lack of certainty is no excuse for indecision. You will never have all the information and facts at your disposal. But take heart in that your competitors are equally uncertain about the future. So learn quicker than them and translate that learning into action faster than them.