The year is coming to an end and more than a few organisations are preparing for their strategy meetings for the new year. For several business executives, the climate is challenging, and they are confused as to what strategy to craft for the year. Meanwhile, in these challenging times, sometimes a situation may arise that favours others and is detrimental to others. The game is to those who see the unseen and will make their organisations very profitable.
Unfortunately, some organisations have myths surrounding strategy. They believe that strategy is something that is only done at a high level and it should take a couple of years before any meaningful benefit is derived from the ‘document’. As executives, those who formulated the strategy documents, move to different companies or retire, the driving concepts are forgotten so is the strategy document. Hence, making the strategy sessions only an event that has no tangible results.
There is a strong inability to link strategy to the daily activities of several organisations.
Strategy must percolate into the day to day operations. If it does not, therefore it is not strategy but a mirage. Any concept disconnected from implementation and daily actions should never be confused to be strategy, and strategy is not a ‘high level’ exercise but should be an ‘all level’ implementable discipline within the organisation.
When a word strategy is involved in any conversation, it makes it sound extremely intelligent and makes others within the organisation to admiringly look upward to those saying such words. Strategy should be taken simply and clearly communicated to every member of the organisation. It is of paramount importance to understand that business is driven better if the whole system functions.
To simplify strategy, it should basically be taken as a map that guides the business on how it plans to operate in the future. The map is to represent the business, the market and the industry. As a matter of fact, the strategy formulating process should aim to address the questions;
= What is the business status?
Thus, an analysis of the business’s position considering the internal factors, the market and the competition.
= Where does the business want to go?
Thus, the vision, the aim and the desired destination of the business.
= What options does the business have?
How is the business going to journey from where it is to where it wants to be? Which route is the business going to take? And how long is it going to take to get to the intended destination?
= Are the resources to advance the intentions of the business available?
It is important that the resource requirements are coordinated well to avoid shipwrecking the planned.
Strategies often fail because they are left as good documents and not implemented well. Those things that were promised during the strategy sessions, that were supposed to happen, do no happen. The execution fails to happen mainly for two reasons, either the organisation is not capable of making it happen or the business executives misjudge the challenges the organisation face in the business environment. From time to time, the execution does not happen because of both reasons.
When business executives approach execution as the tactical side of the business only, and delegate it, whilst they focus on the so called ‘higher level’ issues, the organisation is likely to lose its competitive advantage. For business success to be certain, execution should be treated as specific behaviors, techniques and a system that every organisation need to master to have competitive advantage.
It is not possible for an organisation to deliver on its commitments unless management practice the discipline of execution. For any strategy document to achieve the intended results, execution must be part of the organisation’s strategy and its goals. If you do not know how to execute, then do not waste time crafting strategy documents!
In formulating strategy, there is always a gap that is ignored by many business executives and that gap is between what the executives want to achieve and the capability of their business to achieve it. No matter how good the strategy document sounds and how good the list of what executives want to achieve, if the business lacks ability to achieve it, then the strategy session would be a waste of time and resources. There must be clear coordination between what the executives hope to achieve and the capabilities of the organization to achieve it, for strategy to be meaningful. Otherwise, the strategic plan will end up in some shelf and away from critical eyes and minds until the end of another year when another strategy event must take place.
When the big thoughts are formulated during strategy sessions, they must be translated into concrete steps of action, otherwise they are pointless. Without the concrete ACTION steps, no one puts the effort to meet their stretch goals, learning becomes meaningless, and the enthusiasm drops dead in its tracks. Instead of moving forward, the organization starts to take steps backwards and the result is worse. Eventually, the energy is drained from the organization, even leading to high staff turnover.
For strategy to work, according to Larry Bossidy and Ram Charan, it is important for every business management to keep these points in mind:
= Execution is a discipline and integral to strategy.
= Execution is the role of every business manager.
= Execution must be a core element of any organization’s culture.
Strategy sessions can even be approached using the animal kingdom tactics for survival. The strategies of the animals are not much different from the strategies that businesses should adopt to succeed, and these strategies have been in existence for long. So, what strategy are you going to formulate for the new year?
=Are you going to be like the eagle in a storm?
In a storm, just like the prevailing conditions in the nation, other birds fly away with fear, but the eagle spreads its great wings and use the storm’s currents to soar to greater heights. Rather, it goes above the storm. Business executives who will choose to take advantage of the current storm will take their businesses to greater heights, whilst others fly away in fear.
= Are you going to be like the lion? Lions have mastered to hunt as a team for they know that single effort cannot be compared to the effort of two or more. King Solomon wrote in Ecclesiastes, “Two are better than one, because they get more done by working together.” With the right teamwork and coordination, the organisation will survive the current economic turbulence, and even become better afterwards.
= Are you going to be like the rhinoceros? Perseverance is the game of the rhino. Are your strategies going to maintain your current position and press on in the new year? Are you going to maintain your knowledge of the product and the market and keep offering what you have been offering?
=Are you going to wait and see? If your wait, remember that someone might be advancing in your territory and is going to have your share for breakfast. Although in storms, advice is given to wait and see, it is never a good idea! Not improving or advancing is going backwards.
What do you predict in the next few years? How you see is how you will strategise! The game of business is not mainly won by many, the few who see the unseen will be profitable in the future!
For example, in the coming year, organisations need to focus on increasing their asset velocity, which is another component of making money for the business. Velocity, per Investopedia, is the ratio of dollar sales compared to net assets deployed in the business, and the net assets include plant and equipment, inventories and accounts receivables less accounts payables. Higher velocity results in improved productivity and reduces working capital. Additionally, it improves the cash flows of the business – cash flow is the fuel of any business, and it can also help improve the business’s margins, revenue and market share.
Note, strategy always start with the end in mind, then working towards such an end. Therefore, take time to figure out what end you desire the business to achieve before crafting the strategic plan. Obviously, do not forget that there is no worthwhile strategy that can be planned without taking into consideration the organisation’s capability to execute it. Any strategic plan is only as good as its execution.
According to Apostle James, faith without works is dead, so is strategy without execution! Alan Branche and Sam Bodley-Scott says, “Strategy Execution is the responsibility that makes or breaks executives.” Finally, never forget that strategy is about creating the future for the organisation, otherwise it is not strategy