It is absolutely impossible
to build a great organization without having great goals. This is because a
vision encapsulates the aspiration of the organization; where it wants to be
and what it wants to become. Without a compelling vision, a company cannot
record unending success.
However, while visions
create the future of an organization in the imaginations of all concerned, it
is strategy that actually drives the organization to the envisioned future.
Strategy is the bridge between a company’s present and its future. Without an
appropriate strategy, a company’s envisioned future will remain a mirage. It is
for this reason that Gerry Johnson and Kevan Scholes, in their book, Exploring
Corporate Strategy, submit that it is strategy which determines the direction
and scope of an organization over the long term.
Strategy is vital to the
actualization of corporate objectives because it bridges the gap between means
and end. Strategy involves the deployment of resources at the disposal of an
organization for the actualization of corporate goals.
According to Michael
Porter, a Harvard Business School professor, strategy should determine how
organizational resources, skills and competencies are combined to create
competitive advantage.
That is why many have
argued that any corporate failure is traceable to failure of strategy. Those of
this school of thought insist that when a company goes down it is because it
has employed the wrong strategy; if the strategy is inappropriate, the result
will be unsatisfying.
Essence of strategy
Strategy is a game plan
deployed by an organization to achieve its long-term objectives. A strategy is
a corporate blueprint for winning, for achieving predetermined goals. The
raison d’ĂȘtre of a strategy is winning. When strategies are carefully thought
out and painstakingly implemented, success becomes a cinch. But when a strategy
is put together haphazardly and implemented half-heartedly, failure will be the
end result.
Components of a strategy
These are components of
strategy.
Corporate aspiration
The most important
component of a strategy is corporate aspiration. That is the starting point. It
is only when the aspiration is expressed and shared that a strategy can be put
in place for its actualization. Since strategy is about winning, what winning means
must be stated unequivocally so that everyone knows what the objective is.
Former General Electric
(GE) chairman, Jack Welch, wanted to build an agile and profitable business, so
he espoused a corporate objective that all the company’s subsidiaries must be
either number one or number two in the industries where they operated. The
objective was clear to everyone. There was no hiding place for any manager. It
was so clear that even managers could assess themselves. So, when Welch moved
to sell off companies that failed to be number one or number two in their
industries, the people knew they had been forewarned, though not many of them
liked the idea.
SWOT analysis
SWOT analysis is a
breakdown of an organization’s strengths, weaknesses, opportunities and
threats. To come up with a good strategy, an organization must have a firm
understanding of these.
Strengths – The strengths
reveal areas in which the organization has competitive advantage and
identifying these will help it to firm up its hold in those areas.
Weaknesses make clear to an
organization the areas where it is not as strong as its competitors. Engaging
in the analysis helps it to know what it can do to manage the weak points and
minimize the damage that can emanate from such areas.
Opportunities – An
organization needs to know what the emerging opportunities are in its industry.
These are usually found out through observing the trend in the industry and
through research into customers’ behaviours.
Threats – These are
developments that may negatively affect the fortunes of an organization. These
require serious attention because they may lead to a company losing its
competitive edge or even being brought to its knees.
Coke, Pepsi and Bigi
When Bigi Cola emerged on
the nation’s beverage market about four years ago, neither the Nigerian
Bottling Company nor Seven Up Bottling Company, bottlers of Coca Cola and Pepsi
respectively, paid the new product any attention because there had been other
carbonated beverages that attempted to break into the league of Coke and Pepsi
only to fizzle out after a while. So, the management of both companies did not
see the drink, bottled by Rites Food Limited, as a threat. But through creative
marketing and competitive pricing, Bigi Cola has forced itself into the
consciousness of fizzy drink consumers and now poses a serious threat to both
Coke and Pepsi’s dominance of the market.
Bigi has penetrated into areas which
the giants sparsely serviced and has made them its strongholds. It has also
surreptitiously sneaked into the major markets. So much is the threat posed by
the new drink that both Coke and Pepsi have been forced to revert to packaging
their products in glass bottle, after several years of moving into plastic,
just to be able to compete with Bigi on prices.
Every organization must
always pay attention to emerging threats and take definite steps to mitigate
the damage that could be foisted by the treats.
People
The people element is the
most critical of the components because a strategy does not drive itself,
strategies are driven by men. If the people element is right, the strategy
stands a very good chance of working.
Definitive steps to achieve
goals
This is where the rubber
meets the road, where the real work is. Once the end is determined, the
strengths identified, the opportunities recognized and the threats known, the
next thing is to outline the specific steps to be taken, deploying the
strengths towards the appropriation of the opportunities. This is usually
broken down into units’ activities with the time line for the actualization
clearly stated. This is important because, according to the Parkinson’s Law,
propounded by C. Northcote Parkinson, work expands to fill the time available
for its completion. The import of the law is that a task will never get to the
concluding stage unless a time is set for its completion. To make the most of
the time and get the best out of a task, a deadline must be set for it right
from the outset. Failure of which will leave the work to continue almost ad
infinitum.
Leading through adversity
Communication
Before the strategy is
rolled out, it is important for the leadership to get a buy-in from the people.
For this to happen, the leadership has to communicate with the people
explaining what is intended, why it is important and their role in it. When the
leadership and the people are on the same page, success becomes easy. As put by Friedrich Nietzsche, he who has a why
can bear almost anyhow. If the team members are made to comprehend what the
organization is doing, why it is doing it and why their own role in it is
important, it is almost certain that they will give their all to its success.
Execution
A strategy is only as good
or otherwise as its execution. Until it is executed, a strategy is of no
benefit. Therefore, it is important that execution must be embedded in the
strategic planning and should not be treated as something different from the
overall plan. With that, thoughts about implementation are factored into the
planning right from the outset.
Strategies fail for a
number of reasons. Here are some of them.
Wrong personnel
Strategies are nothing but
plans. However, a plan is not self-driven. So, a strategy is only as good as
the people behind it. Thus, while it is important to come up with a good
strategy, it is equally important to raise a competent team to drive it.
As observed by Jim Collins
in Good to Great, packing a company full of people with the wrong skill sets
will kill the company fast for the simple reason that a person cannot give what
he lacks. To make a company great, an individual must have the seed of greatness
in him or her. A mediocre team cannot produce great results with a great
strategy because like will always produce like. A mediocre team will always
have a mediocre result.
Then, it is not enough to
have a team with the right skills; the people must also be assigned the right
tasks. Round peg must be made to fill round hole.
Failure to execute
Credible statistics show
that between 60 and 90 per cent of organizations never execute their plans. It
is odd but true that organizations do deploy quality time and copious resources
to fashion out strategic plans which they hope will give them an edge in their
industry only to leave undone that which is critical to their effecting a
change in their narrative. While many organizations are gung-ho about coming up
with plans and policies, they are not as excited with the implementation. This
is one of the major reasons for failure experienced by organizations. It is to
guard against such that experts now advocate the inclusion of execution in the
strategy right from the beginning.
Failure to monitor
Compliance does not just
happen, it is made to happen. That is the premise of the statement by Louis V.
Gartner, former IBM CEO, that a leader should not expect what he does not
regularly inspect. So, the onus is on the team leader to ensure that he
monitors the progress of the strategy. The tendency is for people to slow down
and do what is convenient when there is no premium placed on the provision of
feedback. To ensure that no room for failure is allowed, the leadership of the
organization must put measures in place to assess progress.
Not tweaking strategies
One thing about strategy is
that it should be dynamic. A strategy is not supposed to last a lifetime. But
the thinking among some business leaders is that it is un-strategic to change a
winning strategy. So, no matter how obsolete the strategy becomes because it
keeps fulfilling the original expectations of the company leaders they do not
change it until it becomes too late.
Source
Tribune
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