Conscious development is always connected with the strategy. It is impossible to build it competently without strategic thinking. It allows forecasting developments in a changing reality and making decisions long before the point of no return.
For small companies where management is concentrated in the hands of one person, the strategic thinking of the leader is sufficient. In companies with a huge amount of management and scale, there are usually several leaders, and each one has an individual way of thinking. Hence disagreements arise. In this case, it is necessary to combine the points of view of the leaders and formalize the result in a strategy. A document that coordinates the vectors of development and removes the contradictions will appear.
A person dealing with crisis management
knows that companies that were successful in the past, but are “dying” today, have one diagnosis – they do not correspond to the current “conditions of the game”. And usually, there is no time to maneuver, opportunities to change are missed. This is what strategic management does to prevent this from happening. The strategy identifies emerging problems, forces changes, and ensures long-term survival.
7 Misconceptions about Strategy
Systematic strategy management differs from company to company. Some of these differences are based on differences in situations, and some are based on different views of strategy. Some views are ambiguous to me.
1. Strategy is the path to specific goals.
Strategic goals are themselves the product of “strategizing”. When forming a strategy, it is more important to set a vector, a direction. Objectives appear later, but they become a reference point for operational management.
2. A strategy is created as a single one.
It is better to simulate several scenarios and determine the most promising one. So there is a target scenario. The strategy is selected from alternatives.
3. The strategy can be done for you by someone else.
Often a strategy developed by an outside specialist is a document that lies on the shelf. Implemented strategies, on the other hand, are mostly the choice of the top team of the company itself. They may do it for you, but it will not help, on the contrary, it will deprive you of experience, understanding, and responsibility. Try not to outsource key decisions and functions.
4. Strategy is created in a strategy session.
The session is the final point in choosing a strategy. If the company is working on a strategy for the first time or has a significantly updated top team, there will be about seven preparatory sessions before the session. They will help align participants’ understanding of the strategy cycle, tailor it to the situation, and gather the necessary analytics. The success of the session is in the preparation for it.
5. A good strategy is the key to success.
It is important to distinguish between the notion of a chosen strategy and an implemented one. Even with a good choice, there is a significant risk of “missing” the implementation. For example, with the loss of top ideologists, inability to respond to the actions of competitors, intra-team conflicts.
6. A good strategy will result from good strategic thinking.
This relationship is two-fold. It is also true that good strategic thinking develops in the process of creating strategies. It does not appear by itself; you need a “simulator” to develop it.
7. Strategy is a rigid plan.
But the team has the ability to make adjustments along the way. The strategy leads into the future, which is only roughly projected. If there are significant developments in the industry, the strategy needs to be reevaluated based on the new realities.
Five Years For A Strategy Is Not A Deadline
In discussing the timing of planning, it is worth sorting out the difference of views on the situation between operational and strategic managers. It is not about positions, but about the corresponding types of thinking. An operations manager is a “manager with a microscope,” capable of diving into small details. He or she is comfortable working in a short time frame. The strategic manager is a “manager with a telescope,” exploring a distant perspective. He assesses the whole picture of industry development.
Strategic managers set the strategic planning horizon based on two conditions. The first is how far into the future the industry’s transformation can be seen. The second is the payback period of the investment project. The depth of planning can’t be less than that. When you hear about a project with a payback period of 7 years, most likely the company is relying on a 10-year strategy. Otherwise, an investor won’t dare back it. As a company grows in size and capital intensity, the planning horizon also increases.
The three keys to strategic success are:
1. When choosing a strategy, involve key executives and internal thought leaders as much as possible.
If the ideologues of the strategy will be inside the company – this is the best prerequisite for success. It is not enough to choose and formalize a strategy, it must be understood and accepted. A great “acceptance of meanings” happens when it is your own ideas. It is clear to you how they were born, what they are based on, how they relate to the methodology. In addition, quality team involvement in strategy development prevents the bulk of the resistance to change and increases the chances of successful implementation. The pattern works the same way with accountability. Your design is your responsibility. If you do want to work on the strategy with consultants – it should be their help, support, and not the making of fundamental decisions.
2. Systematize your work on the strategy.
Use tools and technology. Create a strategic committee, invite consultants to build the strategy management system, and set up the infrastructure. Break down the strategic cycle into stages, determining which strategic models are appropriate in your case. Set up data collection and analytics, simulate possible scenarios, create criteria for evaluating them and select the best one. “Tie” the strategic cycle with a workflow. This will enable you to anticipate changes in the industry, build and maintain competitive advantages, and consciously grow the company’s capabilities. Potential for investment projects will appear.
3. When choosing between growth and development, bet on development.
These vectors often coincide and stimulate each other, but it is worth considering them separately for goal-setting. Growth is about volumes. Development is about competitiveness. If you don’t focus on this direction, one day your volumes will go to a more competitive player by the right of the strongest.
You can compare strategic processes with human development: today I am better than yesterday, and tomorrow I will be better than today. In the same way, a company must be persistent in its improvement. And the management will think about how to improve. This is a matter of strategic importance.
Bio: Rebecca Carter is a content writer for EssayWritingPro and works for a company that provides help with writing assignments for students. She has Bachelor´s Degree in Journalism and is always happy to assist students with their papers. Her main hobby is tennis and horse riding. Besides, Rebecca enjoys hiking and visiting culinary courses.