We need a strategy, now what?

10/05/2016

"We need a strategy.” It’s the statement that’s reverberates around the room at any given meeting on any given day in organisations all around the world.

 
It’s often after those words are decisively uttered by a member of the executive team that senior managers and functional heads are filled with optimism and dread. It can be daunting to craft and execute a strategy that will deliver a winning business model, when the mandate is a little more than a need to “have a plan” and “think strategically.”
 
Without clear frameworks and tools, teams and organisations often write a strategy based on fluffy aspirations or on the strategies of their competitors rather than forging a unique value proposition based on their distinctive organizational identity, their differentiated capabilities, and what is most important to customers.
 


What’s more, there is a long-standing belief that strategy and execution are separate tasks. A recent survey of senior managers revealed that only 8% considered the top leaders of their respective organizations as excellent in both strategy and execution. In many organizations, strategy and execution reside in distinct functional areas. Yet, even in the formulation process, strategy should not be decoupled from execution. A good strategy is an executable one. Tactical considerations should figure prominently in the formulation process. These include considering requisite capabilities, gaining clarity around resource allocations and understanding the role of culture and organization design in inhibiting or enabling the proposed strategy.
    
Developing and implementing a robust strategy is easier said than done. It requires managers to shift between concrete/tactical perspectives and more abstract, multifaceted views that account for complexity and ambiguity. In short, managers need a deeper, more systemic understanding not only of the competitive landscape in which they operate but also an understanding of the untapped sources of innovation and competitive advantage within their own organisations. Poor strategy formulation coupled with great execution capabilities means organisations do the wrong things flawlessly. A good strategy poorly implemented means organisations do the right things poorly. Strategy is at its best when it is carefully crafted with execution in mind.
 
With the global economy facing unprecedented levels of uncertainty, effective strategic thinking and execution have never been more valuable and more pertinent to business and individual success.
 
Brandon Lee is an Assistant Professor of Business Strategy at Melbourne Business School. Brandon will be leading the CEO Panel Discussion at the World Business Forum.

Learn more about developing strategic thinking in your organisation here