How is it that some businesses continue to grow, even in volatile economic times? What are the magic ingredients that separate sustainable businesses from those that crash and burn when the going gets tough? A key part of the answer to these questions is having a clear strategy that leaders and their teams can get behind.
“People need to understand where the company is going and take autonomous decisions. The main value of a strategist is to understand the vision for three years and mobilize the organization around the vision and what people have to do to get there.” Jacques Pommeraud, former SVP and general manager of cloud services at Salesforce.
Strategy is a concept much talked about in many businesses, although not often clearly understood, nor well defined. Would you ever set out on a journey without knowing your destination? Perhaps some would, and it’s fine to do that if there’s just one or two of you. Take a tribe with you and you need more a clearer purpose to avoid chaos or disaster.
Even the greatest pioneers in history had a strategy, whether it was to discover new resources or map new lands. Captain Cook and Walter Raleigh didn’t necessarily know where they would end up, although they knew what they were looking for, and what would make their expeditions worthwhile.
When there is no clear strategy, common symptoms include:
- Knee-jerk decisions on anything from hiring, acquiring, expansion or partnerships;
- Lack of innovation, or too much time spent on new initiative overload
- Low delivery of tangible business benefits from change projects;
- Reduced competitive advantage when new challenger businesses rapidly capture market share;
- Mainstream revenue-generating products become outdated and lose profitability;
- Sudden shocks to the business environment, whether economic, political or consumer loyalty, quickly derail the traditional business model.
To stay on the crest of the leadership wave, rather than be swamped by it, leaders need to conduct regular ‘F’-tests of their business strategy.
- Future-Focus – do you have your eyes on the horizon of your market? Do you understand how your customers’ needs, buying behaviours and decision making criteria are likely to change? (Never assume they will stay the same, even in markets you have known for a long time.)
- Flux-proof – we have previously blogged about leading in a ‘VUCA World’ – your long-term strategy is working if you are still able to change your tack and weather the storms of market Volatility, Uncertainty, Complexity and Ambiguity.
- Fit – at the end of the day, a strategy does not ‘live’ in a 50-page document, (although it is good to capture your original thinking and decision criteria as a reference point). Strategy lives in the thoughts, words and decisions of your people, and it is validated through customer loyalty and promoter scores. Logic and analysis needs to be combined with a ‘does it feel right test’. Does what we are deciding on today fit with our long-term goals and ever-present business values?
The clarity of your strategy needs to be understood by people across your business, and it needs to resonate enough that, as teams increase in size, in those moments where a decision is needed, you don’t need a senior executive to tell you what course to choose.
How strong is the strategic capability in your leadership team? Arrange a complimentary interview with our leadership development team to discover how durhamlane’s Leading at a Higher Level programme can work for your business.