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                GROWTH. TRANSFER. LEGACY.

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When is it Time to Challenge Your Strategy?

  • May 22, 2019 12:10 PM
    Message # 7356459

    Although CEO’s are constantly challenging the direction and vision of their companies, in the hectic day-to-day running of a business, it is sometimes difficult to recognize internal and external trends that can cause the company’s sales and earnings to slump.  The more you can sensitize yourself to some well-defined warning signs, the earlier you can begin to address key issues.   Every industry has its own unique characteristics, and therefore it would be somewhat presumptuous to suggest that one list could serve everyone.  Consider the following list as a starting point in developing your own criteria that will alert you that it’s time to rethink your strategy.

     

    1.      Change in industry structure – Stay in tune with the trends occurring in your industry.  Join industry associations, and network with industry experts.   Updating your strategy on a regular basis can help you stay ahead of your competition.  

    2.      Margin erosion – Reducing your cost structure is an important initiative to stay competitive. Cost cutting initiatives have limits, and best to consider alternative strategies where revenue growth can impact your cost structure well before internal costs saving opportunities begin to dry up. 

    3.      Flat or declining sales – Companies that have experienced rapid growth over long periods and suddenly “hit a wall” must quickly rethink their strategy.   The reality is that every company will need to reinvent itself periodically.   When sales and profits are no longer responding to past techniques, dramatic changes must be considered.  Success depends on having the courage to take bold action to pull the organization out of its slump.

    4.      Dated products or services – Determine whether your product or service is outdated.  Be the innovator in your industry.  Challenge and energize your management team to find new ways to improve your products or services. 

    5.      Employee skills have plateaued – Sometimes your own people may not be capable of taking your organization to the next level of growth.  Not that they lack energy or enthusiasm, rather, it is usually a lack of breadth of experience.  Having the right people in right place, with the skills and experience required to implement the strategy, will have a significant impact on your success as an organization. 

    6.      Unfocused – As companies grow, they are presented with a greater number of opportunities.  Chasing too many opportunities at once will dilute the company’s resources.  Strategy focuses the organization on initiatives that offer the greatest value, eliminating the need to chase the next shinny object.

    7.      Static Strategy – Strategy is not static or rigid – it is dynamic!  Strategy needs to be managed over time.  It is the CEO’s responsibility track progress and adapt to market realities as often as necessary to ensure the achievement of the long-term objectives. 

    These seven call outs are still relevant today as they were in 2003 when we published our first monthly newsletter.  I hope you have found value in all our past newsletters.  You can find over 100 articles on strategy on our website at AlbuonStrategy.  Let us know what your experiences have been and please feel free to share this article with others.

    Quote

    “Designing a winning strategy is the art of asking questions, experimenting and then constantly renewing the thinking process by questioning the answers.  No matter how good today’s strategy is, you must always keep reinventing it.”

    By Constantinos Markides (from his book, All the Right Moves)

    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. 

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