Contemporary businesses today have quite many strategic goals, from Human Capital to Customer/Client Relationships, from Innovation to Corporate Brand Reputation, from Operational Excellence to Corporate Governance, If only pick one, what is the highest strategic priority though?
1. Strategy Focus should never be One Dimensional
A good strategist pivots between the External and Internal drivers, and frames a systematic strategic change agenda that addresses all the corporate priorities. The guiding vision and mission should dictate the focus of the organization and sets out the proper order of priorities.
- The approach to strategy is
multi-dimensional: As a strategist, one cannot think in terms of
single thread serial actions alone nor can one give undue priority to
areas that are covered by the tactical implementation of the strategy, the
approach to strategy is multi-dimensional with one main goal in mind. Most
of people may give an answer based on importance rather than thinking about
priority. This changes the answer substantially
- Systematically addressing the strategy agenda is forged by Alignment, the critical pivot point, bridging from Developing the Strategy to implementing it. This involves aligning the Metrics (and Targets), Initiatives, Resources and Operating Plans with the Strategy’s Goals & Objectives. There are people, priority, plans, processes, culture and organization structure...(4 P's, C and O).
2. People are the Weakest Link, Innovation is the only Light
Though strategy is multi-dimensional, it’s no surprise that human capital and innovation catch more attention as strategic priority because:
- People are the weakest link: Human capital is the base on which Innovation, Operational excellence, Customer/client relationships, Corporate/brand reputation & others are built on. Without the right people, excellence cannot be achieved. Human capital makes or breaks a company therefore should be given highest priority
- Innovation is Light: If people are the weakest link in business, then innovation is the only light all businesses need to pursue now, as innovation touches broader aspects of organization such as culture innovation, business model innovation, process innovation to directly impact operational excellence and customer satisfaction. Innovation with new concept, technology and novels views help substantially to leave a different mark and stand in better leading position always.
- People Plants Innovation Seeds to make Strategy Fruitful: Human Capital, as talent plants the innovation seeds, as such, the efficiency innovation will improve operational excellence & business governance, and "disruptive" or sustainable innovation will improve customer satisfaction and business brand.
3. Depend on Which Areas are most in Need of Improvement
It takes science and analytics to make a good strategy. Strategy is about people, process, technology and vision. You need to let the fact pattern tell you what it needs. Not force fit an arbitrary assumption about what priorities must be.
- It’s situation-driven: The "right" answer about the highest strategy priority is that it depends on which of these areas are most in need of improvement in the organization in question. If they have an excellent human capital program, then putting human capital as the top priority won’t make further improvement, because, as a strategy, nothing changes.
- Mutual Effect: Human capital seems
to be getting the most attention. However, even the deepest and most
invigorated talent pool will quickly be undermined by chronic
inefficiencies in an organization. Alternatively, a group of stead, if
underwhelming talent in an excellent organizational hierarchy, should
accomplish a great deal more. That said, you can have the best people, but
if the organization does not have a growth mindset, the culture of
learning, these people will not be properly utilized. If an organization
is looking for excellence, it will incorporate the other areas of
importance by virtue of pursuing excellence.
- The Trade-offs of Different Dimensions: It takes a logical approach to considering the trade-offs between operational excellence, product leadership (paralleling your innovation category), and customer intimacy. While it is important to be "good enough" on all three dimensions (and depending on the nature of your industry, good enough might be a very high bar), a company can not pursue leadership on all three simultaneously because of trade-offs in the allocation of top talent (human capital) customer confusion about what the company delivers (brand and reputation). Amongst other dimensions.
- A strategy pyramid: Innovation as a key strategic differentiator and the lifeblood of any business operation, and place it on top of a Pyramid, with Customer/ client relationships and Human Capital in the middle, then Operational Excellence and Corporate/ Brand reputation at the base. the argument: is that innovation needs to drive your business to be able to develop and compete effectively, Customers are the reason for your operational existence while Human Capital are your asset to reach critical business targets, and as enablers for your operations, you need Operational Excellence and a sound Corporate/ Brand Reputation..
- Investors should then evaluate allocating capital based on
1) The management's vision as stated through the mission statement and strategy
2) Whether the product/service set and road maps are consistent with this strategy,
3) How effectively the strategy (and plans) has been articulated internally and externally,
4) Employees' ability to execute consistently over time (allowing for the occasional hiccup
5) Valuation based on financial metrics and projections for future revenues, cash flows and income.
An effective strategy is always multi-dimensional, and the strategy priority setting is about the right people, doing the right things at the right way, by first-things-first priority, within a culture and organization structure specifically designed to fulfill the right mission and achieve the right long-term objectives