Strategy Management cycle is significantly shortened, and strategy-execution is a dynamic continuum.
The length of the strategy depends on many factors, internal and external to the organization: the economy, politics, market conditions, type of business, customer needs or expectation, financial health of your company, your company's flexibility or ability to adapt to change, company culture, capacity, top level management, competitors, Life cycle, product or service, market conditions, technology, etc., and last, but not least, the core purpose of one's company. There is a lot to think about, and strategy duration should be catered to each company and its industry.
Business strategy will have evolving time lines. To give structure and clear goals, you should have 12 months, 3 -years and 5-year strategy in place. If, however, you are a true planner or you are a fuse list company, then a 10-year plan is a feature. The rule of thumb is that the larger the entity the further out your strategy goes. The rationale is simple for this, the larger the entity, the slower it is to react to external and internal pressures. Therefore, you need to plan ahead, and an emergency reaction to market changes are fewer because this costs a lot more to facilitate. There is the distinction between Strategy (repositioning ) and Planning (Operational/Implementation etc) as well. A successful combination of medium versus long term planning is as following - Once the 'where are we' is analyzed; SWOT conducted, strategy is carved; planning is done in three horizons - short-term (1 year), medium-term (3 years) and long-term (5 years).
Strategy Management cycle is significantly shortened, and strategy-execution is a dynamic continuum. A lot depends on the type of business, and now because the technology, market conditions etc. are changing very fast, no matter you are building a longer term vision or medium term strategy, strategy-execution is an iterative continuum. When organizations incorporate innovation and decrease the strategic plan to 12-36 months, it is important to have a strategy focus team whose core focus is to capture and monitor the information similar to a PMO structure. That will keep data centralized and accessible as variables change. Additionally, as you shorten the timeframe, the STARTING POINT should be communicated as well. Often times, confusion is around: does the clock start ticking at month one of planning or month one after execution?
Clarity around that paired with the industry should give more insight on whether to decrease or not. You MUST incorporate performance based measurables and monitor the results monthly to stay on track. Otherwise, you can not quickly address issues and keep the business on track to achieving the goals. Make sure your measurables are 'performance' based, are easily measured (numbers, percentages, etc...), they are linked to the company goals, and that the staff are held accountable to the measurables.
Companies consciously or subconsciously choose to compete and grow in one of the following ways. Sometimes actions speak louder than words. Many companies that are clearly following one of these strategies, have never articulated it as such. If they have, the time horizons and innovation models to support them are clearly different. Often companies articulate one but are clearly following another.
Furthermore, in developing one's strategy, especially if done methodically and thinking about the SWOT analysis done, you've thought about all the risks and threats. You've anticipated that some things will happen in the near, short, and long-term that might be somewhat painful, but necessary to achieve the goals. You've mitigated those risks and threats. All too often though, the leader is forced to placate impatient stakeholders reacting to a share price dip or less than expected earnings reports.
-Market Positioning (having a robust enough view of future to enter new domains before they take off)
-Launching major new products and platforms
-Competing on cost
-Random acquisitions
-Acquiring adjacent businesses
-Launching many incremental innovations
Vision, strategy, goals, and objectives are all important to ensure the effectiveness of strategy management. in today’s world we have a real lack of forward thinking (vision) and the transformational leadership necessary to really move people and organizations forward. In so many cases executive management get so uptight about plans, mission statements and integrating strategies that they can’t “tell” a simple and very clear story about what the company, the product, the project is really about and where it needs to go. If you look at the most successful leaders what is most common in their skills was the ability to articulate a vision, a way forward that everyone clearly understood. The strength of their ability to tell the story overcame any and all objections because they were very honest that vision may not be for everyone, that some will not go, that some will leave during the journey. Success resulted from everyone know where they were going.
After clarifying the vision, it’s also important to define the goals. Such goals should be really tough but reachable, clearly defined, positive and should have passed an eco-check. Such a goal allows to define a strategic plan (sometimes more than one, which requires decision-making capabilities). It is the best to develop the plan in backward thinking from the goal in order to define the critical pathway and which steps needs to be fulfilled by when in order to reach the goal in time. However, we need to be aware that such visions, goals, and strategic plans have been defined on the best option and knowledge at the time they were defined and worked out. This at the end means no matter how long in advance you plan (the more short term, the more precise it can be done), the key is that on a regular base there needs to be a check, where the following questions needs to be raised:
-Is the vision still valid in the continuous changing environment? Is there an adjustment needed?
-Are the targets still in line with the vision? Do we have newer information which needs to be addressed? Does this impact the strategic plan?
Even the strategy management cycle is significantly shortened, but no strategy is not a good strategy. Some companies have not just survived, but done quite well, without any real strategy. Some are fast followers and others claim the ability to react as their strength. While these companies may be financially successful, people inside have no common view of where the company is going, which impacts decision making. “Our strategy is nothing more, and nothing less, than the sum of our tactics.” More firms are like this than what they are willing to admit it. The key thing is to align the company to the business dynamics or in short change management! Boils down to risk appetite. Taking bigger risks can help to achieve goals faster. Each strategy should be assessed against the organization's risk tolerance rather than a target date. Jim Collins writes in the book Built To Last that the core purpose for a company should last for 100 years while the business strategy might change many times within the 100 years. So the strategic goal might be set to any number of years that make sense in the specific business you're into, but remember that the core purpose should be very, very long term.
1 comments:
also learn Strategic Goal.
Post a Comment