A new study of 163 CEOs, senior strategists and communications professionals, conducted by Forbes Insights and FD in conjunction with the Association for Strategic Planning and the Council of Public Relations Firms, looks at corporate strategy development and implementation. Of special interest was the interdependence of strategy and communications in creating and executing a successful strategy.
Their Nr.1 key finding?
…While senior management does not have a common definition of what strategy is at the conceptual level, it does have a very clear definition of what strategy is not, as well as a very clear, pragmatic definition of what types of corporate initiatives are and are not strategic…
In Strategy Is… Hmm…, we talked about Chris McCall’s three fundamental questions about strategy:
- What business are we in?
- What business should we be in?
- How do we get there?
So, if senior management does not have a common definition of strategy, that means they are not on the same page in regards to the three questions above. Am I the only one who finds this extremely disturbing?
Luckily, I am not. Mitch Ellner, CEO of CNC Strategy Cloud Solutions, talks about this in his post Strategic Planning – the “Strategy” of all 3 Resources. With three resources, he means people, processes/information and finances.
“Businesses need to begin to look at all 3 strategic resources – people, processes, finances – to measure and thus manage against, and with begin to look at this as a part of the business – ongoing, habit and consistent – not as a “project” that has a start and stop. Strategic Planning, strategy, alignment, execution, et al. has no start and stop. It does have change.”
John Dillard, co-Founder and President of Big Sky Associates, talks about decision making in uncertain future scenarios in Decision Trees Help Provide Strategic Answers for Uncertain Scenarios. I like his post, because it touches upon a subject that often comes up in my conversations with my clients. Life in general and the business world in particular, is full of uncertainty. Business managers, especially in times of rapid change, feel uncomfortable making decisions when faced with the unknown. Sure, they can deal with problems when the objectives, variables and the parameters are clear. What about when they are not? It is never easy to solve half an equation. One needs to make assumptions, and making assumptions is almost always risky.
In such situations, concepts like expected value, decision tree and scenario analysis become very useful. By laying out feasible alternatives, even in multiple layers, and quantifying their outcomes as well as the probabilities of these outcomes, the chaos of the world of possibilities can be transformed into the order of the decision tree. Decision trees are especially useful when evaluating investment alternatives and deciding on strategic moves.
“Decision trees are a way of applying solid risk-analysis methods to a variety of business problems. And whether the problems are organizational or related to national security or investments, the flexibility is quite remarkable. By quantifying the uncertainty, decision trees allow decision makers to model a variety of outcomes at multiple levels and react appropriately.”
Chris McCall of Touch Business Consulting, in his post What Is Strategy?, tries to answer that question by examining the words of business strategy gurus such as Bruce Henderson, Michael Porter and Peter Drucker. He then goes further and boils the practical approach to corporate strategy development and execution down to answering three fundamental questions:
- What business are we in? This is an examination of your firm’s strategic principles, its core competencies and its business model.
- What business should we be in? This question examines the structure of the industry or industries in which you compete, how your products and services stack up against the competition and what are your available growth strategies.
- How do we get there? In this question, you define how to translate the ‘possible’ into actionable plans, devise a clear path for growth, create an environment for execution and measure results.