Strategic Thinking in Turbulent Times
Here we go again…supply chain challenges continue to cause shortages driving costs up; tightening labor markets are pushing wages higher; global energy prices are at new highs due to geopolitical disputes; and these external factors threaten to push the economy toward a recession. We are in another challenging business cycle that demands changes to how your business will succeed now and into the future.
The most resilient companies large and small are already taking steps to manage this new level of economic volatility. The bad news is that companies tend to refocus on the short-term and put long-term strategies on hold. As discussed in previous AlbuonStrategy publications, long-term thinking, particularly in turbulent times, is more important than ever.
Strategic thinking requires a disciplined, no-nonsense approach that will drive change. Consider these three strategic steps:
Find Your “Profit Zone”– The profit zone is the area of a company’s economic activity where it achieves the highest profits, enjoys the greatest competitive advantage, and where it can sustain and grow value. “Strategic Thinking” tears into the core of the business to find, redefine and commit resources to the most promising strategy for now and into the future. Focus resources to grow your existing profit zones and leverage that success into new growth opportunities.
Forget The Past Selectively – This is not a new idea, but often one of the most difficult concepts for business owners to embrace. The concept is simple—there are some parts of your business that you should probably consider exiting. One question you might ask: if we did not offer this (product/service) already, would we offer it now knowing what we know today? Mature, stagnant products suck resources away from new and growing products. Make the tough choices by abandoning the past selectively.
Don’t Expect Perfection – It is an uncertain economic environment and predicting the future is more difficult than ever. This is where our strategic management system plays such an important role. There are three steps to successfully beating the odds in this uncertain market: Create the strategy; translate the strategy into action; and monitor and refresh the plan regularly.
We cannot predict when these external environmental challenges will moderate or reverse course, nor do we recommend waiting. What strategic actions are you taking to embrace these turbulent times. Let us know what you think and please forward this newsletter to your associates and friends as you see fit.
“A dynamic strategy is designed to be a way forward which deals with particular obstacles and barriers to progress. It is not static…strategy is continued, ongoing problem solving.”
Richard Rumelt strategist, educator, and Author