Tuesday, 22 April 2014
In one of my earlier blogs I wrote about how strategy is different than a problem.
Let me try giving some more insights about strategy and ‘misuse’ of the word strategy in the corporate.
If I say that the strategy is futuristic in nature which defines decision of making thoughtful choices. These choices explain assumptions about choices and reasons of choosing to do something and why not to do something.
But the reality is different.
Very seldom, you will find the word strategy being used alone. Generally, it is sufficed with ‘planning’ or ‘plans’. Therefore, the strategy becomes strategic planning or strategic plans. This change leads to very catastrophic change not to the word itself but even to the thought process in the organisation.
Plans or planning denotes actionable events which are scheduled in advance to carry out in an agreed manner later. It means aligning some doable actions.
More so in organisations, strategic planning starts with referring to the vision or mission – a lofty, aspirational goal- as some say. The vision or mission is then taken to identify some related initiatives. Each ‘identified’ initiative is put under the scanner of ‘Financial Feasibility which in turn leads to ’annual budgets’. The moment this is done, strategy is relegated into the background. Chaos erupts out. Initiatives fail and whole word demean the ‘strategy’.
Annual budgets are not used to define a strategy rather a tool check the financial stability. Secondly, initiatives or for that matter financial numbers provide knowledge about short & medium term success.
A strategy is not a financial budget. So is the case with the planning, as planning is not explicit about what the organisation chooses to do and why. Planning in reality talks about logic of affordability and therefore, it can be supervised. As we were supervisors during our course of career, we tend to go back to supervision and fail to understand the real meaning of strategy. Regarding ‘plans’, it again revolves around allotment of organisation resources.
So, when you come across strategic planning or strategic plans, beware, they are not talking about ‘Strategy’ per se. Check with people what they mean before you react.
Tuesday, 15 April 2014
Strategy – the most abused word in corporate corridors, is perhaps least understood. Different people use it for different reasons, giving different reasoning. However, the most common misuse by top executives of organisations is when they change a challenge into a problem and then try tackling such a problem by tried and tested tools. These tried and tested tools are put on piece or pieces of papers after long discussions – sometimes running from weeks to months, under the pretext of Strategy Making. Sometimes, another name of ‘Comprehensive Plans’ is used instead of strategy. Agenda remains only one, tackling s problem – far away from their real intention of making a strategy.
Idea behind such activities in organisations is to feel safe & secured in the dynamic market conditions. The feel predominantly is that as they have well placed strategy in place, hence their business is secured. The reason of such acts of learned well educated executives around the world is overcome the fear of failure and discomfort.
Do you such things in your organisations, readers?
But fact remains a fact. Fear and discomfort are real and integral part of strategy making. The litmus test of a ‘would be successful strategy’ is shades of discomfort and fear about its success. The reason behind it, nobody can see & predict future, therefore no one can make a full proof strategy.
A strategy in real sense is about placing bets and making hard choices. Hard choices? That people dread the most. For all reasons, I can say a strategy should have inbuilt ‘risk of failure’ in it. In other words, strategy can not eliminate ‘risk of failure’ but only increase the ‘probability of successes.’
As organisations go along, a defined strategy should provide the flexibility to change it. No strategy can avoid unexpected hurdles in its way. Further, ‘Perfection’ attitude in strategy formulation has no place.
So strategy formulators please do not get disheartened when your strategies come face hurdles on their way of implementation, just ensure you have given enough room for taking correct actions.
Wednesday, 9 April 2014
You may find organisations struggling to make profit, despite their been having best quality producst in a different category.
Reasons - failure on their part to respond to customer need and ever changing world, complacency to shrug off need to change themselves and the worst, looking for reasons to justify not to change. One of causal relationship in these companies is their ‘inward’ looking approach.
Cost and quality are hygienic factors in business today. No company can survive if it does flirt with quality or cost. At the same time none of these two provide, any base for differentiation and therefore no reason to charge premium. Companies which do not have ‘anything’ in their product or services to charge premium can only make ‘Survival Profit’ for short run. Lucky companies can slower down their speed to death as they luckily got a distinct product category. But question comes how long?
New world has given a more serious threat as they lowered down their cost of production by exploiting Economies of Scale but at the same time maintained high degree of quality standards.
Man does not stop at challenges. Rather, challenges help him in being more creative
Organisations have to build a ‘Culture of Receptivity to new Ideas’ i.e. Culture of Creativity thereby any and every idea being tossed to it formally and informally is put to test before being rejected having no substance. Mind it, ‘ideas are not incubated in labs but in a positive atmosphere of Receptivity to new Ideas'. All studies show, organisations fail when they start avoiding new thinking on one or other pretext.
Organisations therefore, have to look for ‘External Exposure’ to create differentiation in their products or services to look for premium. We all know, source of profit is value being derived from a product or service by the customer or consumer. It thus, means any activity which can define further the value enhancement in the entire value chain can help organisations in achieving differentiation in their products or services. Differentiation leads to Premium. Organisations have to look at both ends of its spectrum to enhance the value of its products or services. At one end, they should look for integrating very closely with their supply chain partners, improving their manufacturing processes and at the other end they should optimize customer value across the whole chain, not just their part of it and should also harness technical capabilities of their supply chain partners.
At the end, organisations should create an ecosystem of its own to build either product or service superiority. Mere focus on cost will not guarantee profitability in changing world and down play with quality will wipe the organisation overnight.
Tuesday, 1 April 2014
"Leaders need to 'see around corners' - to see something significant about the future that others don't see.'
An apt saying for the current VUCA world, where everything & anything is volatile, uncertain, complex in nature and ambiguous by its presence or absence.
Leaders make plan well in advance and try achieving them by organising resources around those plans. But the reality hits them hard on their faces when these plans are either under achieved or not at all achieved. This can very well be seen in slipping down financial numbers in majority of cases.
Learning by most of executives to my mind is cribbing about the conditions & cursing it, instead of taking appropriate actions. At the same time there are leaders and organisations which undertake diagnostics and change themselves to 180 degree. It therefore means what all needs to be taken into account in this VUCA environment and come out successfully are.
a. Actions & Comprehension
Clarity in the minds of leaders is the foremost point to succeed. No effective actions can be taken if the clarity is not there about what all needs to be accomplished. Once, the clarity is established, it becomes very easy to channelize resources and people around it.
More VUCA environment, the harder it is for leaders to comprehend the situation. Resulting in the difficulty to comprehend and articulate it. This leads to inaction by leaders or simply following the down trodden path of reaction.
Therefore, it is of utmost importance to articulate well what all to be accomplished and actions should not stop.
b. Higher in position, tougher to articulate an objective
It is seen that inaction starts at the top. Any immobilisation at the top has multiplication effect at the bottom. Leaders are being watched by their followers. They watch you for your every action & inaction and accordingly make up their minds to take actions or not.
Leaders need to force themselves to get clarity in their own minds and let their subordinates know how they see things. Articulation and corresponding actions will become easy for both leaders and their subordinates respectively.
c. Look for Actions and not for Right actions
I believe ‘one cannot see future with clarity and therefore it is almost impossible whatever one does will test the testimony of time and will come out right.’
Instead of fighting for the right actions, it is imperative to take actions. Correct the actions on way, if required.
d. Establishing a Common Purpose
Objective in hand will give leaders required insight on continuum. Objective also will give a common purpose for the people to align their actions.
Leaders could not see that their incapability to bring people around one common purpose will eventually be fatal for the organisation. Only thing they may see or in most cases may not, the date of fatality.
e. Lead by Values
When everything around is so ambiguous that a decision cannot be taken, leaders should lead themselves by following their values.
Value your values. I believe in ‘When going gets tougher, hold tight to your values’. Any slippage on your values will put you on a wrong path. Leaders need to make their organisations ‘to be values led’. Mind it everybody is watching you.