Why Bother with Strategy?
Mike Freedman, author of The Art and Discipline of Strategic Leadership defined strategy as the “cause of the nature and direction of an organization, and the framework for making business decisions.” Simply put, strategy defines the organization’s “rules of engagement,” and provides guidance on the choices you select:
- Which products and services you will offer (or not offer)?
- What markets you will serve (or not serve)?
- What capabilities you have, or need (or do not need) to take your selected products and services to your chosen markets?
So, strategy is about making choices. It helps define what your future state should look like and then how you will get there. It is the “Road Map” to achieving your long-term objectives. Strategy management is a dynamic, continuous process to develop and execute the vision and mission of your organization. And, it provides a system to communicate and align the organization around common goals.
We recently completed work with a privately held family business whose owners expressed that their vision was to double revenues over 5 years—a lofty and aggressive target. However, the vision lacked substance. The client’s managers immediately pushed back because they lacked clarity as to where this newfound growth would come from. After completing a disciplined strategic assessment and evaluating strategic alternatives, the management team were in a better position to map out a detailed strategy describing specific strategic objectives and allied initiatives required to achieve both top and bottom line growth targets. This disciplined process provided management with the understanding they needed to buy into the owner’s aggressive vision. Managers understood the risks and rewards associated with each step toward achieving the strategic objectives, and allocated resources based on market realities and capabilities.
The strategy also had a lasting effect on employees. It forced departments out of their protected “silos,” encouraging cross-functional cooperation. People knew what needed to be done and by when; they knew what was important; they became more productive and proactive; and they were recognized and rewarded for their contributions toward achieving the company’s strategic objectives.
Now more than ever, companies need a well-defined strategy, supported by a detailed execution plan. Strategy management should be at the forefront of all your business decisions, and your future. What are you doing to ensure you achieve your long-term objectives? Tell us about your plans and experiences.