There are two things you must know – what strategy is and what it is not. “Strategy is about making choices of how to win with your customers and key stakeholders against the competition.” Every day, the competition is looking at your bread. They want to eat it and take all of it. This bread represents the customers who bring the money for the services you offer or products you sell. When leaders fail to make strategic choices, they have failed at strategic planning. This increases the chances of someone else having their dinner or taking over their target customers.
When you get a copy of the document most leaders call “a strategic plan document”, you find it is an abstract paper. It has nothing to do with choices that have been made to win. The question, therefore; what causes the lack of clarity of choices to win? There are three mistakes most leaders make.
- Analysis paralysis
I am sure you are curious to know what is analysis paralysis. The challenge with many leaders is trying to create perfection. Trying to take a lot of time to understand all the possible factors which could affect business success and growth. They think they can exhaust all of them and have a perfect strategy. In reality, there is nothing like a perfect strategy. The essence of strategic planning is to increase the odds of success or to increase the odds of creating stakeholder value. This means that you will make choices to increase your chances of winning in the dynamic markets but not guarantee your success.
Once you have this kind of mindset, the approach changes. Instead of trying to exhaust all factors through models like SWOT analysis, 6Ms, PESTLED analysis, etc leaders end up being on the side of unnecessary operational detail and listing factors to be exhaustive instead of examining how to win. This causes analysis paralysis. According to this school of thought, the bigger the document, the better it is. But actually, the reverse is true. the shorter and more lessor-focused document, the better the strategic plan.
- Generic analysis (research paper)
If you get a copy of the company’s document labeled strategic plan, you will find it is generic. Someone can download any document from the Internet and brand it as a strategic plan of company XX. Most of the time, these documents are characterized by introduction, about us, SWOT analysis, PESTLED, Economic analysis. You get bombarded with too much data which has nothing to do with strategy. There is a limited linkage of the vast data collected to the business to inform the strategic outputs. This kind of strategic planning in the form of a research paper makes organizations feel they have the document but nobody opens it to read. It doesn’t give outcomes for value creation. It is all talking about the competition, the growth of the economy, and the political environment. No clear definition of what it means to the choices, investment priorities, and staff capabilities the company has to make. You find leaders have spent a fortune taking people for a retreat only to document a strategic plan that remains on the shelves until the next retreat.
- Abstract vision
We have been taught that we have to dream and dream big. Any company has a vision, mission, and values. This is like a template for any business leader. The world is still suffering from the Covid-19 pandemic not even the after-effects of the pandemic. Covid-19 is still causing havoc globally. The business dynamics have changed. We are seeing winds of uncertain change.
However, you will realize there are some companies still taking people to plan for 10 years and still anchoring their thinking on the vision established way back when such a company was founded. According to many leaders, once the vision has been crafted, it shouldn’t change. It should be unachievable. These are some of the traditional approaches that have been taught to us and unfortunately have affected business growth and success.
If you have a new Board, and you are looking at how do you win as a business, do you stick to the same old vision? Or you craft a dynamic vision based on the information you have and your current exposure, and the context of the business.
The vision should change depending on what happening in the market.
When the founders crafted the vision say way back in the 1990s, they had limited exposures, read few books and the winds of change were not as dynamic as they are now.
It is 2021.
We have seen how events like the Coronavirus pandemic can disrupt business. Technology is transforming businesses creating billion-dollar companies overnight.
Traditionally, to make a billion-dollar company would take ages. These new developments mean that we must change the management models of the past.
In a nutshell, you need a strategy when two exists:
- An opportunity to tap into
- A strategic problem to fix.
Whether a new or existing company, you want to tap into opportunities. You need to define these opportunities. That’s how you should begin your planning of how to tap into the market opportunities.
Alternatively, your business could be operating at below capacity given the investment capital and resources present. You must conduct a thorough context analysis to identify areas to fix. Start by defining your strategic challenges, in the form of cause and effect.
That way, you can make the most of your strategic retreat, where leaders or strategic planning champions are invited to think deeper to go a mile deep into what ails the organization and how best to position it to win amid the ever-changing market environment. You seat down and zero down to the strategic challenge to solve it and win. If you are not limited by the vision set for a long time, you will have the freedom to think and be creative.