GROWTH. TRANSFER. LEGACY
Last month we introduced the “Stated and Working Model” that overcomes the argument that strategy can be restrictive to a business (See our blog Is Strategy Restrictive?). This month we will take the conversation a bit further by offering the conflicting notion that strategy is deliberate and dynamic. Let me explain.
Strategy is deliberate because in developing strategy, choices are made based on history and forecasts. Let’s assume that during the initial phase of strategy development, most business assessments are based on the best information a group of smart leaders can gather about their business and industry. They know what happened in the past, which is a reliable data source, and there is learning from those experiences. Predicting the future, however, depends on how knowledgeable and experienced the leadership team is. At best, they can offer informed “bets” on the future state. So, in developing strategy, strategic choices are made deliberately based on fact and forecast.
Strategy is dynamic because the future will always be unpredictable. Think of all the environmental obstacles that have been thrust in front of business leaders over the past decade…the financial crises of 2008, ongoing middle east instability, U.S. becoming a net exporter of oil, more aggressive Russian nationalism, China looking outside its borders for future growth, digital disruption of industries, state and federal government agencies imposing regulations, and disruptive technologies. Consequently, strategy needs to be dynamic to accommodate for changing market, economic, and environmental realities. The past was quite helpful informing the future, but unplanned events cause strategies to evolve. Organizations need to be agile as they learn and adapt to a changing world in real time. (See our blog, How to Strategically Navigate the New Economic Normal)
There has been a paradigm shift in the way leaders look at the discipline of strategy. “Strategy Management” recognizes the deliberate and dynamic needs for strategy. The strategy management framework is a closed loop annual process of testing, learning and adapting strategy for long-term success. Business assessments are conducted, strategic choices are made, implementation plans are deployed, and plans are measured, monitored and challenged consistently through-out the year. This final step provides critical input leaders need to evolve their strategy to achieve the company’s long-term objectives.
How are you managing your strategy? Is your strategy evolving based on new learning? How agile is your organization to adapt to market changes?
“Strategy is about making choices, tradeoffs; its about deliberately choosing to be different.”
Michael Porter, Professor at Harvard Business School
“Strategy is the starting point for a transformation that needs to occur and how that company must change to win.”
Lynne Doughitie, Chairman & CEO of KPMG
Dick Albu is the founder and president of Albu consulting LLC, a strategy management consulting firm focused on engaging and energizing leadership teams of middle market private and family businesses. With offices in Stamford, CT, the firm is dedicated to helping its clients formulate robust business strategies and follow through on execution of key strategic initiatives. Dick Albu can be reached at 203-321-2147 or RAlbu@albuconsulting.com. Rob Krist, Managing Director can be reached at RKrist@albuconsulting.com. Please visit Albu Consulting’s website for more information at www.albuconsulting.com.