At Artemis Connection, we call ourself strategists. However, what constitutes “strategy” changes a lot depending on who you ask. So let’s talk about what strategy means to us.
Overall, we feel that McKinsey really captures the bottom line: “Strategy is an integrated set of actions designed to create a sustainable advantage over competitors.” Traditionally, many organizations have been satisfied with simply remaining competitive—maintaining their share. However, in the 21st century, future success will increasingly depend on outperforming your competitors.
In our books, strategy consists of the following core elements:
- Strategy involves a cohesive approach. It requires operational alignment in order to succeed.
- Strategy is dependent on effective execution. It is defined by actions, not intentions.
- Strategy has a long-term perspective. It seeks to create sustainable success over time.
Strategy guru Michael Porter offers a useful analogy to help us distinguish between operational effectiveness and strategic planning. The former, he says, involves defining how to run the same race faster; the latter, involves choosing to run a different race.
Of course, that doesn't mean you need to change markets or service lines in order to be strategic. However, it does require a serious rethinking of how you will conduct business going forward.
Why do organizations fail to realize the benefits of strategy?
Organizations frequently miss the mark when it comes to strategy, because they fail to realize the necessary ingredients. Based on our experience, we broke it down for you into the most common pitfalls:
1. Lack of Innovative Thinking
One of the biggest reasons people become disenchanted with strategy is the paucity of fresh ideas that lead to breakthroughs. Most plans cover the same ground year after year, recycling old ideas about how to develop and grow new business. Prior to the recession, that approach may have been sufficient, but the situation today calls for new strategy. Amidst disruptive changes in the marketplace and society at large, companies today must re-evaluate the status quo to recreate—or at the very least recalibrate—their strategy.
Keep an eye out for our upcoming post outlining ideas on how to promote creative thinking in your planning process. Subscribe here to get a notification when that article is live.
2. Too Broad
Recalling our earlier definition, strategy must define a cohesive course of action to move the company forward. In an attempt to be inclusive, however, many strategies fall short by combining too much input from various parts of the business.
The lack of focused, coherent strategy—and the coordinated effort that comes from it—erodes the prospect of success. Although you must involve key managers in the planning process, a patchwork of action plans does not constitute a strategy. A better approach would be to define your overall company strategy first, then have managers develop unit plans that align with your strategy.
3. Unrealistic Action Items
Each planning cycle identifies more objectives than your company could possibly address at once. Effective strategy clarifies which challenges and opportunities are most important, as well as which actions will yield the greatest payoff. It’s better to go deep, not wide.
When a company focuses its energy on the same overarching goals, there is a powerful synergistic effect. Focused effort will accomplish much more than labor distributed across multiple unrelated action items. Bottom line: Your strategy should be achievable, in addition to comprehensive.
4. Not Getting the Right People Involved in the Right Way
Strategy is a group effort. It requires a team of people who are able to contribute the best ideas and insights to your planning process, as well as lead the implementation afterwards. Our advice is to look beyond the top of the org chart. Although you need the support of your senior managers, it’s worth considering those excluded by rank who could contribute. You may identify people who are more capable at embracing change and leading new initiatives.
Another challenge is involving the right number of people. As we frequently facilitate strategic planning for our clients, our team can testify to the advantages of a smaller group. However, a smaller group may leave out several key stakeholders. Therefore, we recommend treating strategic planning as a process rather than an event. Consider other ways to get people involved that don’t require participation in the primary meeting.
5. Fails to Adequately Address the Details of Implementation
Peter Druker said “Ideas are cheap and abundant; what is of value is the effective placement of those ideas into situations that develop into action.” With our clients what separates the most successful organizations from all the rest was not the content of their strategy, but how well it was executed. This is consistent across for-profit and nonprofit companies. That’s why we push our clients to emerge from the planning process with both a strategy and an actionable implementation plan. This requires more than just action items with deadlines and task assignments, but also realistic time estimates and monthly progress updates to encourage follow-through.
Beware of losing momentum by “front-end loading” your action items into the first six months. If you can accomplish your strategy within six months, it's probably not an effective strategy. Finally, like any plan, don’t forget to periodically update it to keep pace with your progress and changing circumstances.
• • •
To create sustainable competitive advantage in the 21st century, organizations must pursue cohesive and action-oriented strategy for the long-term. Those who do will effectively take new ideas from conception to effective implementation. Remember, effective strategic execution usually involves change. Therefore, don’t overlook the necessary steps to make that change successful.