At the end of the day, value is created by execution – not strategy
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10 Strategy Tips from the Front Line
Despite the insightful observations of many strategy gurus, most strategic planning processes are fraught with flaws. In essence, there is a mammoth gap between the theory and the practice of strategy.
Having observed more than my fair share of strategic speed bumps, the following list contains 10 strategy tips from the front line:
- Strategy development is not about blindly following strategy gurus’ methodologies
- There is no substitute for critical thinking and rigorous analysis
- Use the gurus’ methodologies (e.g., Porter five forces, Blue Ocean) to provide different perspectives on your strategic problem – not as the ultimate source of truth
- An approach that overlays different strategic methodologies typically results in the most robust strategy
- Assess the strategic landscape from an external perspective
- Strategy is not an internally-focused activity – external context is mandatory; STEEPLED / SWOT analysis and competitive intelligence can be invaluable
- What disruptive forces may affect the organization? Can the industry be reshaped (e.g., redefined, segmented, disaggregated, consolidated, market disruption) to provide an advantage?
- What customer pain points are currently unmet?
- Strategy is an iterative process
- An optimal strategy is rarely developed without an iterative process; iterations drive strategic perspective and fine tune a strategy
- Iterations typically cycle through strategic options, competitive / market reactions (game theory is helpful here), and implementation feasibility
- Conduct iterations on several of the most promising
strategic options; premature focus on a single option can dramatically
reduce the strategic upside of an organization
- An organization’s optimal strategy largely depends on its current state
- Transition and execution challenges cannot be reasonably assessed without a realistic view of an organization’s current state
- Current state includes critical elements of the organization, such as: customers, human capital, products / technology, channels, core competencies, activity web, assets, partners, market image, financial resources and availability of capital, etc.
- Time to value may be a factor for many organizations (e.g., turnarounds)
- Don’t underestimate the value of activity “fit”
- Strategic positioning gets all the glory, but a consistent, reinforcing, and optimized activity web can add enormous value in even the most commoditized industries
- Superior activity fit
accelerates strategy implementation, minimizes strategic drift, and
enhances operation effectiveness
- Strategy without realism leads to disappointment
- Optimism is a powerful (and necessary) attitude in an organization; however, overoptimistic assumptions inherently lead to poor decisions and an underperforming organization
- While innovative strategies can lead to breakthrough businesses, they can also lead to broken businesses if basic business principles are violated
- Create the strategy for the long-term
- Incorporate strategic flexibility whenever trade-offs are reasonable
- Consider the option value of various strategic positions and activity webs; cheap calls options are particularly valuable
- Utilize a dynamic process to reassess and reorient the strategy as required
- Make the strategy real
- Translate the strategy into terms understood by the organization
- Document key business model elements, high-level functional policies, and the supporting activity web
- Realign the organization’s metrics to reflect the new strategy
- Highlight
key transition and implementation activities; assess potential impact
on policies, processes, organization, and systems
- The “best” strategy is useless (or worse) if it isn’t (or can’t be) implemented
- Complexity is the enemy of implementation; all factors being equal, a simple strategy is preferable to a complex strategy
- To sustain execution intensity, the final strategy must have broad support in the organization
- Don’t underestimate the challenges of a strategic transition; the organization must survive the transition period and emerge strong enough to take advantage of its strategy
- At the end of the day, value is created by execution – not strategy
- Don’t treat strategy as an academic exercise
- “Ivory tower” strategy exercises typically add little value; broad organizational input is required (and may even provide valuable bottom-up strategic insight / options)
- Strategy must drive business decisions; failure in this area quickly discredits the strategy and its advocates
- Strategic elements must be incorporated into operating plans and regularly reviewed in rhythmic business processes
- Strategy must be broadly communicated throughout (and understood by) the organization
This is only an excerpt. Read full post here.
Published in Breakaway Business Blog, Tuesday, May 12, 2009
via: twitter.com/SocialMoves
( Title quote by Yogi Berra, Hall of Fame baseball player and manager )