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Is Business Strategy Worthwhile?

A recent study conducted by A.T. Kearney on the State of Strategy Today is worth considering for its findings but also what it does not say.

I am not sure that the study actually landed on a set of recommendations but I think they are implied through the findings outlined below:

  • Companies with longer planning cycles (5+ years) see more beneficial results than those with shorter cycles;
  • Strategy is more difficult than ever and requires a greater investment;
  • Senior executives have a much greater level of confidence in their strategies than middle management;
  • ‘Agility’ is seen, by some, as the answer to complexity in the marketplace, but evidence has not proven this out. Those who see strategy as a source of competitive advantage are more successful;
  • Failings in strategy formulation are:
    • Lack of understanding of future trends
    • Little understanding of internal capabilities
    • Too much top-down approach
    • Not enough logical thinking;
  • Failings in strategy deployment are:
    • Lack of understanding of the strategy
    • Lack of internal capabilities to execute the strategy
    • Lack of ownership;
  • 2/3rds of companies that pursue meaningful organizational inclusiveness in formulation have successful strategies;
  • Strategy does require top-down leadership.

In considering these findings lets just reaffirm what strategy is all about and its role in leadership and the success of a business:

  • In the simplest language your strategy is how you intend to compete. It is how to intend to be successful in delivering on your purpose and achieve the goals you have set;
  • Strategy is the tool that leadership uses to provide direction, alignment and focus across an organization. It is a key communication tool; strategy is a conversation and a language;
  • Strategy expresses the value you intend to deliver to your customers;
  •  Strategy allows you to develop a competitive posture, that is, the way you intend to compete to win each and every day;
  • Strategy is about positioning so that your value is always greater than competitors but strategy is continuous and often emergent, and it is never static;
  • Strategy is compounding, always building on what has gone before;
  • Strategy is always focused on building a more competitive organization, as the capability of an organization is always a limiting factor in strategy.

Taking this understanding of strategy and applying it to the findings above, what are the conclusions that you can draw and apply in your business?:

  • Although strategy is continuous, emergent and evolving, it is built upon a foundation that allows it to be compounded over the long term so as to build value;
  • This foundation lies in purpose and an intimate connection with customer need and value, both of which provide direction, growth and innovation;
  • Strategy is led from the top but must engage the entire organization otherwise how else can it provide direction, alignment and focus;
  • Knowledge of markets, customers and trends is most likely held close to the coalface and these staff members must be engaged in the strategy process.
  • Formulation and implementation (deployment) are not two separate tasks; strategy is nothing until actioned.
  • Effective strategy requires ownership, ownership requires participation.

Whilst the study did not reference Purpose and Customer Value these are the areas where competitiveness is built today and any strategy must be founded in these areas. Also strategy must always build the competitive strength of the organization so that it may get stronger every year, again an area not clearly addressed in this study.

For further discussion on developing undefeatable strategies:

 

In summary, strategy is about how you intend to compete. Strategy is about better every day and delivering more customer value than anyone else. Strategy is about the competitively fit organisation you build, an organisation that is tactically alive.