Reload, Refresh, Renew: Make Strategy Work Harder
The reality of today is that we are in one of the most turbulent economic times with a great deal of uncertainty in 2009. Not knowing what the short term future holds has caused many CEOs to delay investments, some of which are needed to achieve long term strategic goals. As a result, companies focusing only on the short term are at risk of jeopardizing their long term strategic objectives.
How can leadership teams improve the odds of achieving long term strategic goals in this challenging economy? The answer is to adopt a strategic management system that enables the organization to make better decisions, more often, with more confidence in both good and bad market conditions. A strategic management system enables the integration of long term strategy with near term operating decisions. This integration ensures that appropriate emphasis is placed on execution while also making strategy part of everyday business.
A recent survey by Robert Kaplan and David Norton, the founders and authors of “The Balanced Scorecard,” found that businesses having a strategy management system in place had a success rate 2 to 3 times higher than those that did not have a system in place. Seventy percent of those companies with a strategic management system reported that they were outperforming their peers. The strategy management system is a closed loop process with five main steps:
1. Develop the strategy – identification of the mission, vision and values.
2. Translate the strategy – describe/illustrate the strategy with objectives, metrics, and strategic initiatives that can be clearly communicated.
3. Plan operations – align strategic plan/priorities to the annual operating plan and budgets.
4. Monitor and learn – conduct regular reviews to monitor short term performance and progress in executing the strategic initiatives, and address strategic issues that come up throughout the year that need immediate attention.
5. Test and adapt the strategy – conduct periodic meetings to assess if the current strategy is working given changes in the market environment, and update the strategy as needed.
The strategy management system provides a new model for conducting business, characterized by focused strategic thinking, clear priorities, continuous improvement and a willingness to change. If you would like to learn more about how Albu Consulting, Inc. can help you adopt a strategic management system, please give us a call.