Annually, organizations expend huge resources on engaging consultants, many of which translates to training and strategy sessions. Even though executives will agree that strategy is important, many have been skeptical to invest in strategy development or trainings, majorly because many of these sessions do not generate the degree of anticipated results. In this case, the reluctance of most business leaders and managers is not the lack of appetite for growth- it is the fear of futility.
True strategy is about placing bets and making hard choices. However, just as you have good bets and bad bets, an organization can end up with either good or bad strategies. To avoid the pitfalls many executives dive into, I have highlighted five (5) essential characteristics of a good strategy that you should consider before, during and after your next strategy session.
A good strategy is born out of insights derived from diagnosis or aspirations, not mere speculations.
For an organization to formulate any meaningful strategy, it must have a clear understanding of its current challenges or ambitions. A seasoned strategist or facilitator knows that in unearthing the challenges an organization is facing, focus cannot be on the problem itself, but its root cause. While this sound so simple, it requires expertise beyond mere understanding of how to use business concepts and frameworks; it requires a paradigm and a skillset that transcend management tools and jargons.
Proffering strategy solution entails much more than filling questionnaires and answering few unfounded questions that only examine your challenges on a surface level. It is not just about providing answers; it is about asking questions, probing things, systems, cultures, policies, capabilities, investments, activities, commitments and so on. Therefore, if your strategy sessions does not deal with these issues, it is my assumption that your plan is already flawed.
A good strategy considers every force that directly or indirectly impact your business.
While most organization focus their lens on key players and strategic groups within their industry, they ignore the most important angles and arenas they ought to be examining. They focus more on price, offerings and obvious strategic moves of their competitors, instead of paying attention to business models, policies, initiatives and non-obvious strategic moves made by players both within and outside their immediate field of play.
According to the PWC 2015 CEO Survey, 61% of CEOs surveyed said they think the increase in the number of their significant direct and indirect competitors threatens to disrupt their industries to some extent, during the next five years. Therefore, if your strategy does not account for or consider factors, players and industries beyond your own, you might be missing a crucial part of your victory piece, or probably setting sail for the current that will eventually capsize your boat.
The objective of a good strategy is not to eliminate risk but to increase the odds of success.
The formulation of a good strategy does not automatically exterminate risks or award victory, but it highlights loopholes that can be fixed and opportunities that can be taken. By integrating activities, outlining valuable relationships, and creating enabling systems and structures, a good strategy multiplies the probability of being successful.
Even though executives dread making the wrong decisions by choosing the wrong strategy or investment, if your strategy is fixated on eliminating risks, you will most likely end up with immediate solutions that will wreck future damages. For strategy to generate the desired outcome, there must be an integration between short-term and long-term goals.
Therefore, if the outcome of your strategy session is a bundle of PowerPoint and Excel documents loaded with “shortcuts to you terminus,” I will advise that you reassess everything before proceeding. Notwithstanding, if you are already executing such game plan, it is imperative that you go back to the drawing board and revisit your entire scheme.
A good strategy connects directly to actual business outcomes.
Another essential attribute that you should be mindful of, is that a good strategy clarifies the goal-to-be-achieved and creates the most advantageous pathway for its realization. Because strategy cannot exist on its own and only finds expression through clearly defined outcomes, it is essential that you have comprehensible goals before heading for profitable means to achieve them. In other words, the clearer your goals, the better your chances of creating a winning strategy.
Many years ago, one of the projects I handled as an IT consultant failed. The reason for the failure was not the inefficiency of the developed software, it was not the lack of adequate resources from the management, and it was not the lack of clear communication – it was a flaw in execution. The whole idea was to transform the organization by computerizing its entire system, and in effect, eliminate the use of papers and case files. Unfortunately, the HR department, which obviously did not understand their role in the realization of that goal, kept employing people that had never used a computer system, not to mention running a customized application software. In the quest to retain their jobs since they were not computer literate, the employees fiddled with the software for a while, raised irritating false alarms, blamed the developers, and frustrated the entire project.
This brings me to my next point: strategy creates alignment between objectives and activities. Without coherence between intended outcomes and daily endeavors, goals become mere wishes and strategy will be nothing more than the garbage of mental workout. Simply put, goals highlight key outcomes, strategy highlight key activities. In conclusion, a good strategy does not create a wish list; it creates a to-do-list.
A good strategy embraces both flexibility and rigidity
For you to understand the flexibility requirement of strategy, it is imperative that I mention the two dimensions of strategy:
Even though most strategy sessions end with a detailed plan of action, strategy requires flexibility. It requires the willingness to adjust the wheels as the wind redirects the flow of the journey. While strategic uncertainties is not new to business leaders and consultants, sometimes, ego and the pain of resources invested in creating the strategic plan get in the way of making the obligatory adjustments required for success, despite the fresh insights or new realities. Therefore, strategic plans are not be treated as permanent plans. They should be deigned with emergence and adjustments in mind.
On the contrary, leadership must enforce compliance and alignment to the organization’s strategy, else, employees can quickly forget “why” and “what” they ought to be doing. Inherent in a good strategy are coherent activities and guiding policies: a winning strategy not only tells you what to do, it also explicate “what not to do.” In addition, in monitoring compliance and rewarding outcomes, management must not lose sight of its role i.e. to manage, not to find scapegoats.
In conclusion, your organization should be able to enjoy a reasonable reward of strategy if it stays committed to the insights shared above. However, for your organization to savor the full benefit of strategy, I will recommend the following:
If you are interested in truly moving your organization forward, a winning strategy is essential; and with this piece of insights, I hope you will be able to create one.