Developing a Strategy

When my partner and I were planning for our new company, we spent a lot of time discussing certain business processes where we saw a lot of companies struggling and then spent a few months thinking through the best solutions and how to provide them.

We believe many companies struggle with developing an achievable strategy, determining how to implement it, and then delivering that desired success. We labeled these three challenges: Strategy Development, Planning and Implementation (or execution). I will discuss the first of these, development, below.

Personally, I have worked for several different companies and have served over one hundred consulting clients over the years and the most successful ones always seemed to have the same things in common: strong leadership, clear goals and direction, strong internal and external communication, and an environment that encouraged responsibility and accountability.

Companies that were less successful or unsuccessful tended to have difficulty in turning a “vision” into a strategy. Even when those companies had strong or visionary leadership, even when they seemed to have a lot of internal talent – they would miss the mark. Most of these companies lacked an achievable strategy.

An organizational ‘vision’ is an aspirational statement. For example: “we intend to be the top choice in our industry,” or “we intend to have the lowest unit cost so we can be most competitive on price.” Vision statements are extremely important, but they don’t answer questions like: How will we achieve this? Who will do it? When will it be done? What are the risks we need to avoid? What’s the most we will be willing to spend on this each year? How will we communicate our plan internally? How will we demonstrate this or communicate this to our clients? How will we measure our progress?

Here is an example to illustrate the point: If our goal (vision) was to lower the unit cost to be more competitive on price, we would have lots of ways we could achieve that: We could lay off a lot of people in the U.S. and the U.K. and move everything off-shore (personally I really dislike those sorts of recommendations); we could improve our technology and/or completely redesign our process, eliminate wasteful steps, save a lot of time and/or materials and produce more units with the same resources; we could completely redesign our product (the unit) and focus on what the client really wants, and produce a more desirable and less expensive unit that way, or maybe we could make the unit more appealing, reduce the pressure on the unit price by moving the product in a more premium-product direction, and command a better price while still reducing unit cost somewhat. There are lots of ways to address the vision. We all want to find the best way or ways in each situation.

The questions in the last two paragraphs plus many others must be answered in order to ensure a successful outcome. The answers to those questions are what forms strategy. Strategy Development is the first business process my company decided to address on behalf of our clients. We developed a methodology based on a combination of a lot of research and real world experience.

Our methodology probes the organization’s original strategic vision and then factors in several key organizational constraints: competitive environment, budget, timing, quality goals, pricing power, customer satisfaction, etc. Next, we start challenging underlying business assumptions and/or processes and use all this newly acquired information to run an ideation process with our client. This creative process generates a lot of quick-win ideas while identifying longer term needs that will be addressed in the planning stage.