In the Group50® series on Anti-Strategy,we discuss how companies can unintentionally encourage well-meaning employees to act against their company’s best interests, whether through an unclear overall business strategy, a lack of information, or even badly designed sales compensation programs . In this series of blog posts, we’re going to address the question: How can businesses move from “Anti-Strategy” to “Actionable Strategy”? By “Actionable Strategy”, we don’t mean a strategy that lives in a PowerPoint presentation. We mean a strategy that gives every employee a clear sense of the company’s goals, the major initiatives to achieve those goals and what each employee needs to do to help the company achieve its strategy.
Two caveats: First, every business is unique. There is no “cookie cutter” approach to strategy. So what follows is not a “How To” on business strategy but some lessons learned based on our experience working with hundreds of mid-market businesses. Think of these as food for thought to help your business avoid the dead end of “anti-strategy”. Second, if you are expecting high-level, corporate MBA consulting “platitudes” – you’re going to be disappointed (but don’t say we didn’t warn you!).
Idea #1: Don’t Shortchange Operational Improvements As You Develop and Execute Your Business Strategy
Expanding overseas. Selling your products to a new set of customers. Launching new products and services. Acquiring a complementary business. Building a new distribution channel.
This is the fun stuff of strategic planning. When managers develop a business strategy, they often start by considering these types of externally focused initiatives. And that’s understandable: they’re exciting, challenging, inherently interesting. Doing something new and different is challenging for executives. We believe executives should consider these options and whether they are a fit their business.
But don’t start and end there. Don’t let analysis of the “fun stuf” overshadow other opportunities for significant growth.
Our advice is to start the strategic execution process by doing data driven analysis of customers, internal operations and stakeholders. As part of that analysis, we encourage companies to look as seriously at potential internal operational gaps as they would at entering new markets or launching a new product. We recommend businesses seek to make dramatic improvements in core, internal operational processes – such as how well they deliver products to their customers, or how well they support new product introductions.
Why are operational improvements so important? Because, as our infographic indicates, dramatic improvements in operational performance lead to dramatic improvements in financial performance.
In this case, the info graphic highlights the importance of improving on-time and accurate order completion and delivery. However, industry research and Group50’s experience tells us that improvements in processes such as operational availability, first pass yield and new product introduction can result in major financial benefits to companies.
There are two other important practical reasons to take operational improvements very seriously early on in the strategic execution process:
Less execution risk. Execution risk is the chance that a business will not successfully execute a strategic initiative. The reason internal operational improvements often have less execution risk than, for example, an acquisition of another company or entry into a new market, is simple. Businesses have more direct control and more information about their internal operations. There are fewer unknowns. When you are implementing internal operational improvements, you don’t have to worry about what a competitor or a potential customer might do.
It’s the foundation for those exciting, externally focused growth initiatives. Spend any time with the sales force of a company that is struggling with product quality, customer service or on-time delivery and you will likely hear the following: “How do they expect me to sell more when I am spending all my time handling customer complaints?”
It’s a valid point. Executives at companies that have weak operational processes are continually fighting fires. They don’t have the time to look forward, to plan effectively and do new things. For these business leaders, the exciting, externally focused initiatives that they identified at their last business planning meeting never get the attention and focus required to succeed.
The Bottom Line. During the initial data analysis and planning phase of strategic planning, analyze internal operations as seriously as external, new market and new customer opportunities – even if those areas are less exciting and less sexy. By using an approach such as Group50’s Business Hierarchy of Needs, which takes a holistic view of business strategy, and takes internal process improvements seriously, businesses are more likely to execute an actionable strategy – and avoid the trap of anti-strategy.
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About the Author: Andrew Goldsmith is a Group50 consultant and is an expert in business and marketing strategy, data analytics and data visualization. He can be reached at (240) 460-8202 or firstname.lastname@example.org.
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