strategic-planning-2

Strategy is how we win in the market place, the battle or any other sort of competitive game.

Defining it like this very much agrees with the intuitive sense we have for strategy but does not provide any specific guidance or techniques to use in a real situation that we may be facing.

And very rightly so, I may add, because strategy is situational, meaning that what it is and how it is applied depend very much on the particular situation we are encountering.

To illustrate what we mean, let’s consider the parallel of a chess game. There are no formulas on how you win in a chess game. It depends on the deployment of your opponent’s pieces and yours, it will be different for instance when your opponent is left with no knights at all, and how you play will very much depend on the other player’s capabilities and strategies.

Strategy is thoughtful anticipation of how to influence in our favor the evolvement of the game so that we win it in the end. This implies that strategy making is not a once-off endeavor but a constant process that takes place all the time.

Some of the most common ways that this favorable influencing of the outcome occurs are sometimes by positioning that exploits our strengths and neutralizes opposing strengths, other times by constantly driving towards our vision or by consistently exploiting or creating situational circumstances that give us an advantage.

Strategic planning puts emphasis on the strategy-making process. It has many merits and proved especially in the past very valuable. Nowadays, however, one of its basic premises that of the relative certainty of knowing where to go and how to go from current state 1 to future state 2 has been very much weakened by the fast and unpredictable changes that happen in our modern environment. The facts gathered at the beginning of the process as well as the assumptions made are frequently overturned during the strategy’s horizon, adversely affecting the process effectiveness.

Of critical concern are also the very long time that it takes and the fact that differentiation and positioning are less prominent in its process, the latter often being the preserve of the top executives.

Therefore, extra care should be taken to address and redress such concerns. The table below shows some of these concerns together with some form of remedial actions:

No.

Concerns

Remedial Actions

1 Long planning horizons are unstainable Use shorter periods
2 Assumptions are being overturned Visit your assumptions regularly to check their validity and revise plans accordingly
3 Sticking blindly to a long-term strategic plan may turn you irrelevant Show flexibility and dare to incorporate any surfacing new data, even change direction
4 Competitors change the rules of the game Watch for early warnings not only from competitors but also from substitutes
5 A formal bureaucratic process reduces the nimbleness of your functions and players Encourage understanding and the use of scenarios to promote readiness and flexibility
6 Elaborative strategic planning is an expensive process in costs, time and people energy Advocate simplicity, get the basics right, avoid being too detailed on projects, use performance indicators
7 Treating strategy as a project with start and finish creates complacency afterwards A strategy has no such start and end times. Keep vigilant on the outside, be ready to adjust course

 

What is then strategy again?

Strategy is how we win.

And how do we do it? Winning is the output. Therefore, the question is what are its inputs? Let’s illustrate the answer by bringing to mind this time the business strategy and consider the inputs on how such strategy is crafted. Important inputs normally used, together with some of the actions that these involve are presented in the table below:

No.

Strategy Inputs

Actions

1 Targeting customers  Select which viable customer segments to address (one, few or many)
2 Differentiation Develop Competitive Advantage (CA) on differentiating features and capabilities valued by customers (Value Proposition)
3 Positioning Convey to the selected customer group our mix of benefits and how we stand out from competitors
4 Communicate and Deliver Use the marketing mix to convey the chosen position for Unique Value maintaining consistency
5 Identify and Assess Changes Watch for multiple causes of change like time and product life-cycle stage, new competitors, substitutes, and other external factors and act proactively
6 Preserve your positioning Say no to additions or new features that are not compatible with your selected position

 

These inputs constitute the component pillars of the strategy making. They are not once-off receivers of our attention over a long planning horizon but are under constant review generating adjustments to our efforts and direction to reach winning.

This brief post on strategy could not be concluded without at least some mention of the strategy’s other important co-players: Leadership and Culture. Both are critically important for strategy. To tell of their role, I have chosen the following sayings: “Culture is the birthplace of strategy” whereas a second saying complements the first by saying that “If culture is the birthplace of strategy then leadership is its father”!

 

 

About the author: Panikos Sardos is the Managing Director of P&E Sardos Business Solutions Int., a management consulting firm that offers advisory services, coaching and training and can be reached by email: psardos@sardossolutions.com or telephone: +357 99640912, +357 24400884, www.sardossolutions.com