Five-year plan, Three-year plan, Business Plan, Roadmap, Forward Plan…called by various names, strategic plans are an unescapable part of any senior-level manager’s corporate life, and, perhaps, rightly so. Sustainable growth can only be achieved through a clear strategic direction that is converted into actionable plans, which are implemented through meaningful measures & tactics.
Organisations invest significant resources in establishing their strategies. Monetary investment apart, an important aspect is the management time and thought that is expended in drawing up, debating and finalising strategy. It is therefore pertinent to then try and answer the most important question - What makes strategies work?
Based on practical experience, here are some of the most critical factors that contribute towards success in drawing up and implementing any business strategy.
1. Establishing an unambiguous and ambitious goal for the strategy exercise – Michael Porter has said “Sound strategy starts with having the right goal.” If the purpose for embarking on a strategy exercise is not clear, it can lead to chaotic strategy development. Right at the outset, the goal should be clearly defined and understood – is it for growth, diversification, innovation or another clearly understood purpose .
The other and often seen drawback is to set a “safe” but unambitious goal. The goal should be worth the exercise, and should be ambitious & motivating enough to unite the organisation towards a common purpose.
2. Alignment with the purpose, culture and brand perception of the organisation – Core purpose determines natural choices. However, there are always numerous exciting market opportunities that look attractive from the outside. Managements have to choose wisely to ensure that they identify and drive the organisation towards businesses and goals that align with the core purpose and identity of the organisation/establishment. Core purpose is the philosophy that drives the organisation. However, purpose may also change with times, and it is important to evaluate the same periodically in order to stay relevant. Understanding or determining core purpose helps the leadership in making strategic choices and serves as the navigational compass.
3. Having the right team & talent to lead & coordinate strategy – It is rational to assume that most strategy development exercises will see close involvement of all concerned top/senior management team members, and of the right talent pool from within the organisation who are aware of the ground realities. It is critical to evaluate who should be the other stakeholders who are to be consulted. At the same time, it is vital to either train someone or a small team, depending on the scale of the exercise, to lead and coordinate the effort. It is also worthwhile to hire talent, if necessary, who can guide everyone on the tools and the process for strategy development. The pitfall to be avoided here is to let new or external talent hijack the whole process, as it should be the experts & stakeholders in the business who should be closely involved. External strategy experts facilitate the process by empowering the internal team with knowledge and the right tools, as well as providing valuable mentoring during the strategy development process. Thus, both internal & external experts have distinct and complementary roles.
4. Using the right data source – Smart organisations do not rely only on the easiest source of information available to them, which is their own employees. This has the limitation of limited/incomplete, unverified and biased data, and is akin to devising strategy with blinkers on.
When considering external data sources, it is easy to find a lot of data through internet research. While it cannot be discounted and can save some cost, the veracity and current relevance of the same has to be established. It is also not uncommon to find research reports for the same sector with significant amount of variation in the research outcomes. Therefore, the source and standing of the publishing body should be weighed carefully. Some market research agencies continue to “update” their reports by cursory additional surveys or by extrapolating earlier data. Organisations who rely in a good measure on such published reports for strategic decisions could face risks, and should budget for fresh or targeted surveys, if required. Working closely with market research agencies and guiding and reviewing their research takes effort, but produces far more reliable results which can then be the basis of successful data-driven strategies.
On the other hand, surveys from agencies with a high pedigree can generally be relied upon, and can shorten the exercise substantially. In such cases, just as it is important to understand the track record of the fund manager when buying into a mutual fund, it is worthwhile to understand the people behind the survey and engage in a discussion with them before buying off-the-shelf reports or surveys.
5. Not ignoring survey/data outcomes - Once the reliability of the data and its source is established, the other aspect of using the right data is to accept the findings, which have a tendency to throw up unexpected outcomes. It is natural to disregard uncomfortable truths or information that does not confirm with previously held assumptions, but it’s a wise leader who does not ignore such critical inputs before squandering valuable organisational resources, even if it means going back to the drawing board.
6. Resource planning – Implementing any long-term strategy that is intended to have significant impact generally needs specific additional resources. Before embarking on strategy development and particularly before deployment, the organisation should ensure that it has adequate resources to cover any downturn or required investments in existing businesses, and that it does not trap itself into a problematic cashflow and/or debt-servicing spiral. Well-planned investments and cash flows permit smooth implementation of the planned strategy, thereby leading to a positive momentum and acceptance, especially amongst the employees and investors.
7. Communication – Communicating right is vital during any change process. Depending on the planned/perceived impact of the strategy, a pre-planned and structured communications strategy goes a long way in ensuring buy-in from various stakeholders. Apart from how, the when, what and how much have to be planned intricately and precisely. It is critical to proactively and effectively counter misconceptions and misinformation. Well-planned communication not only serves this end, but reinforces belief in the process and ensures acceptance and positive participation.
8. Operationalising Strategy – Operationalising strategy means effectively deploying the approved strategy across various functional levels through planned activities. It is a call to action. Facilities, technologies, organisational structures, internal and external measures etc. are set up/revamped, tactical plans are converted to action and the ball is set in motion. Firm adherence to timelines and comprehensive step-wise detailing is essential to convert vision into reality, through systematic planning and execution. Formal project management tools or software may be implemented as necessary, though it is not always required.
9. Monitoring - Operationalising any strategy requires very close involvement, monitoring and adaptation. Disciplined monitoring by the top management ensures that the same rigour trickles down to each level. Each stage requires reviews and intervention to ensure that the outcomes are in line with the relevant stage, from strategy development to actual deployment. An effective monitoring plan helps to maintain speed and reach milestones, as well as well carry out course correction at the right time, whenever necessary.
10. Management Commitment & Will – Embarking on any new journey comes with attendant risks and surprises. While it is good to fail fast and fail safe, it is impossible to plan for every contingency that may arise during the course of implementing any new strategy. Despite detailed planning, there may be situations where are far-reaching decisions need to be taken while on the trot. The top leaders’ willingness to stay the cousre (with due adaptation as required) and drive implementation despite hurdles will inevitably be severely tested. In the final analysis, this is what makes the journey more fulfilling, and success, sweeter.
Flywheel Management Services can help you through your journey with experienced leaders to guide and mentor strategy development and implementation.