--Dr. Michael Porter, Harvard Business School
Here's something to think about as a new year gets underway:
Does your business have a corporate strategy, defined as the desired future and a way to make it happen? Is that idea clearly communicated and understood? Do the assumptions on which the system is based fit current reality?
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| (C) APMG |
And is there congruency between the corporate and business unit strategies? Units need their own design, as do staffs. However, corporate should go first.
The goal is aligning the corporate, unit, and staff, without which results are substantially lessened. 1
Getting started with the process can be challenging but having the right people involved is critical to the outcome. With no one way to create a strategy (looking ahead and reasoning back), there are options to consider:
Option A (Predictive Strategy)
Premise:
The world is going to look like this--frame the corporate strategy for that future. 2
- A message, theme, or direction (20%)
- Implementation (80%)
Premise:
We don't know what the world is going to look like. Therefore we need a strategy or set of methods that can be successful almost irrespective of what the world looks like. 3
- A message, theme, or direction (20%)
- Implementation (80%)
Center of the earth
Sometimes corporate strategies are rushed into creation, often bypassing the "core."
If we begin at the center or with the purpose (why?), there's a better chance the blank spaces get filled in with what makes sense.
If we begin at the center or with the purpose (why?), there's a better chance the blank spaces get filled in with what makes sense.
So what's a core idea?
It's a simple articulation of the original purpose or innermost reason for being. It forms the basis of an organization's culture.
A core idea is central to what you're about. It's not a mission statement; it's what you want to accomplish, a positive goal that can be realized at any time.
Some illustrations:
o Taking Wall Street to Main Street--Merrill Lynch
o Technology married with liberal arts--Apple
o Developing leaders of character--West Point
Some illustrations:
o Taking Wall Street to Main Street--Merrill Lynch
o Technology married with liberal arts--Apple
o Developing leaders of character--West Point
The right way to communicate a core is to embody and live it.
No organization should assume current employees or management teams know what's in the core. That means conversations, development programs, and onboarding should include references to an organization's history and a unique sense of purpose.
A neglected idea
Borrowing from game theory, we consider an overlooked but valuable concept--having a dominant strategy.
"In general, someone has a dominant strategy when they have one course of action that outperforms all others no matter what competitors do. If someone has such a strategy, their decisions become very simple; they can choose the dominant plan without worrying about a rival's moves.
Therefore, it is the first thing one should seek." 4
We learn that dominance in the term "dominant strategy" is superiority over another of your potential strategies (make a list), not of your business over a competitor.
Avoiding common errors
After nearly five decades of observation, experience, and study, we note the following recurring problems facing CEOs when it comes to corporate strategy:
-Not being clear.
-Giving up too soon.
-Building an easily reversible strategy.
-Utterances and actions that don't match.
-Failing to have the right people in the right places at the correct times.
(See our 1 April 2017 post, The Struggle with Strategy.)
The speed of light
A year goes by quickly.
What will you pay attention to over the next 12 months to ensure the business under your watch is moving in the right direction? If it is, how to maintain momentum. If not, how to adapt to regain momentum.
No matter the analytics, the rare corporate strategy that works at any time is ultimately a series of judgment calls. When it comes to thinking strategically, quoting Thoreau, "It's not what you look at that matters, it's what you see."
1 Benjamin B. Tregoe and John W. Zimmerman
2 Philippe Silberzahn
3 Ibid
4 Avinash K. Dixit and Barry J. Nalebuff
Strategist.com
© Bredholt & Co.
