Why are some strategies easy to execute while others are not? What is the ideal approach for formulating a strategy that works?
Why is it that some organizations that started strong usually tend to fizzle out and remain stagnant after their third or fifth year? Why do companies end up firefighting the HR and administration issues at the expense of strategy execution?
The answers to these questions may not be something which you think. The fact is without a clear strategy; your organization will soon fail to cope with customer demands, stakeholder expectations and new business dynamics. You will end up hiring people who you actually don’t need!
You need a strategy expert with experience and confidence to ask your team some very tough questions. It is a fact that you cannot improve that you do not measure. Equally, you cannot have your team change unless they have been made to face reality. Economic times are changing so fast that what made you succeed yesterday may no longer help you today.
The reason for this is clear. When a company finds a previously undiscovered solution or product to a market need i.e. they make a break-through, you set up a business to tap or exploit it. But your competitors and the general public is not sleeping. They are watching and doing research on your next move. Pretty soon, your competitors start doing it as they attempt failing you in the process – stealing your staff, prototyping your products and testing for defaults and or black spots or malfunctions etc. pretty soon, some start doing what you are already doing and may drive you out of business UNLESS you have a clear strategy that is well owned and executed properly.
To survive, you must have adequately anticipated competitor or new entrants’ reactions, if you acted in the planned way. That kind of planning is thorough. And you need it to sustain growth.
Take the case of Uganda’s telecom sector. First Celtel (U) Ltd had the licence for mobile telecom all to herself. But UTL had built a fort in fixed network services. It had core connectivity of fixed network to all government offices and MDAs – Ministries, Directorates and Agencies. By investing in the mobile telecom, they intended to leverage their existing clientele across the board as well as a retention strategy.
Unfortunately, neither Celtel nor UTL could offer services that meet the needs of customers at the time. They could not anticipate new entry in the market. They continued business as usual.
For example, Celtel’s branding was one of the most inconsistent and unclear in the market. One would enter into a shop and leave it more worse off than they had entered. The people inside the shop had horrible customer care. Before you said anything, they would have concluded evaluating you as a time waster and how their services were for a special category of people and not you.
And Ugandans responded. Never to return again. As this was going on, MTN undertook a market survey and discovered so many disgruntled prospects. This coupled with poor network and distribution (it was only concentrated in Kampala and in very few select major towns), high pricing and service discrimination, on 21st October 1998, MTN launched as a third telecom company.
Within a short period of its launch, Celtel registered a high churn rate. In addition, some key staff of Celtel jumped ship to the new competitor.
Meanwhile, UTL ‘forgot’ to focus on their cash cow, fixed network connectivity, and jumped on the bad wagon of mobile for which they did not have unique capabilities and systems to compete. The end result was divided attention. The ‘old’ fixed line clients saw a decline in service offering (as UTL was busy diverting resources and investing in mobile networks) at the expense of data and fixed networks.
MTN concentrated on mobile affordable handsets for different segments, network expansion, customer care and people agenda.
In the process, MTN gained significant ground. No wonder the company has retained the market leadership position and today boasts of 10m subscribers and the most successful mobile money operations.
Why are some strategies easy to execute?
The answer is simple: They are well formulated. The measure of a good strategy is in the ease of its execution. The strategy won’t be good unless the team understands it well. When all key team members understand the strategy, it leads to organizational effort alignment.
We are in the era of creating shared value. But for whom do you create value? The key stakeholders of course. So who are those stakeholders and what does success mean to them? You have shared value once all your stakeholders have a common understanding of what success means to them.
The next question is: How do we create and deliver this shared value to the key stakeholders? And what are the internal impediments towards attaining this?
Remember, great questions generate right answers. The catch is you need to ask the right questions to the right people. So who do you involve in your strategic planning?
Much as the Board is responsible for strategy, it does not have to craft it alone. It has to work with the executive and ensure the strategy so developed is practical.
From the above, it is clear most strategies fail at execution because they are not properly developed. It is common to find that strategy formulation is a few people exercise.
At the end of the day the staff say, it is their strategy NOT our strategy.