Strategic thinking is as old as the beginning of time. Strategic management, the business discipline, however, is less than sixty years old. And it is failing to maintain pace with the challenges of keeping businesses competitive in today’s marketplace.

 

Active Knowledge Question:

Where does responsibility for business strategy lie in your business, and what do you believe that task involves?

 

What Actually Is The Role of A Chief Strategy Officer (CSO)?

For those tasked with leading the strategy discipline in their corporations, their role is more critical than ever before. Yet the breadth of skills that they must master to be able to deliver it is not well understood. Nor is the role they must play in their corporations to enable them to deliver on the real mandate of ensuring the business is successful, on an enduring basis.

I find that most definitions of business strategy are not clear and therefore nor is the role of the CSO. What actually is the outcome being sought from business strategy? The definitions seemed, in many instances, backward-looking. Yes, they described a process but, again, for what purpose?

This lack of clarity around the outcomes of strategy has allowed strategy to become more transactional and process-focused. But I believe strategy does have a single unifying purpose.

My practice of strategy has always been premised on the belief that the essence of strategy in business is competitiveness, with the goal of strategic management being the creation, enhancement and maintenance of such competitiveness.

As strategy practitioners, our prime role is to build the competitiveness of the businesses for which we act. And only a part of that role is developing actual strategies to be executed, for example, to enter a market, launch a product, or buy an existing business.

 

What Made Your Business Successful?

If you accept that the role of the CSO is to build the competitiveness of a business, then what does that mean in terms of the scope of the task? Well, the answer to that question may be found in what underpins the competitiveness of a business.

Here is a quick challenge. As a strategy practitioner, list in order of importance, let’s say, the top 10 determinants of the success of a business. Just jot them down somewhere. If business strategy is ultimately about the success of a business, then our focus as practitioners should be on the determinants of that success.

Here is the list of the top 10 distilled from my doctoral research with Australian business leaders, which, I must say through experience, I believe to be on the mark.

1. Strong leadership providing direction and focus for the company.
2. Focusing on the customer.
3. Vision in setting the future course of the business.
4. Creating the correct culture of a company.
5. Being proactive, not reactive.
6. Recognising the importance of employees.
7. Identifying core competencies and building the business upon these capabilities.
8. Flexibility so as to pursue new opportunities as recognised.
9. Accurate intelligence on your competitors, customers and industry.
10. Creating minimum bureaucracy.

If these are the elements that underpin the enduring success of a business, and if business strategy is ultimately about competitiveness (and, therefore, a business’s ability to be successful), do we as strategy practitioners have a framework through which we can view and influence these elements?

 

How Did You Build Your Empire?

I noted in my opening that strategic thinking is as old as the beginning of time. So if we step back in time and consider this domain of classic strategic thinking, does it support or take away from what our contemporary business leaders believe are the keys to success? My reference sources are eight classical Chinese works on military and civil strategy.

These classic strategy works proffer advice in areas covering, not only warfare and battlefield tactics, but human behaviour, motivation, reward structures, selection and evaluation of leaders, command and control, team building, environmental scanning, and so the list may go on.

They represent at least 1200 years of practical knowledge that has been sought after and valued for over some 3200 years.  And, if some may consider them philosophical in nature, then they must be considered as applied philosophy as the knowledge they seek to impart has been drawn from hard-learnt practical experiences.

Again, capturing the ‘pure distilled experience’ contained in these works and relating that to the theme of business competitiveness and success, here is the list that the authors of those works proffer on what underpins competitive success:

1. Worthy leaders who exhibit the correct personal traits must be selected and promoted.
2. Leaders must build a solid bond between themselves and their employees based upon trust and a common purpose.
3. There must be equity of rewards across all levels of an organisation.
4. Only worthy leaders in the pursuit of righteous causes can motivate people.
5. Strategies must be:
   1. Created upon a proper assessment of all relevant factors.
   2. Developed by those closest to the market
   3. Built upon the strategic balance of power and comply with correct strategic thinking (concepts of Tao and Chi).
6. Change is continuous and, therefore, strategies must be evolving, dynamic and continuous.

Do you see the connections between the thoughts/experiences of current generation business leaders and the classical strategic thinkers? I hope they are as clear to you as they were for me.

 

A Strategic Planning Response

Competitiveness is the ability of a business to deliver on what it takes to win. Winning in business is all about delivering greater customer value than anyone else. It is about adaptability and agility but, more importantly, it’s about identifying where that greater customer value lies tomorrow.

I see the role of the business strategy practitioner as being to develop ‘strategies’ that will underpin the capability of a business to compete. Their role is to ensure that a business can effectively outcompete everyone else in their chosen markets day after day.

Yes, that is about identifying the right opportunities but, importantly, it is about building the competitiveness as an organisation. And this goes much deeper than just the ability to deliver, which is often an issue with strategy. A capability to compete will birth an ability to develop strategies and deliver them.

I believe the role of strategy practitioners is much wider than it has been traditionally allowed in many organisations. It’s not limited to financial forecasting, business development, mergers and acquisition, market research and the other tasks that are often the role of the strategy team.

In its quintessential form, it is about the capability of the business to compete. And, as you will note from the elements in the competitive engine, that creates an entirely new set of competencies and responsibilities for the strategy practitioner.

This future role of strategy leaders lies in building the capability of a business to compete.

 

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 An entirely new level of performance.

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All the best in the success of your business,

Richard Shrapnel