Every business leader would like to create a sound Strategy and have it executed well. Accomplishing this, however, remains an elusive goal for most business organizations. Devising and implementing new and innovative strategies to exploit opportunities in a competitive world is daunting. Clearly, no one strategy ?ts all companies.
As with most complex problems, the solution to planning and executing strategy lies in creating a practical, step-by-step methodology that breaks the problem into manageable components to be addressed in a logical sequence. The steps in this paper describe such a systematic process.
What exactly is strategy?
Virtually everyone in our society is touched by the strategic choices ?rms make about their products and services. These decisions affect the workers, customers, competitors, investors, and communities of today’s businesses. The word strategy comes from the Greek word strategos, which means “a general,” and is derived from roots meaning “army” and “lead.” Hence, a general is the leader of an army. In both the military and business, competition typically drives organizations to ?nd ways to best their rivals through the effective use of their resources. Strategy is often contrasted with tactics, another term with military origins. While strategy represents the big picture about “doing the right things,” tactics are more about the details of “doing things right.” Strategy sets the direction in which the organization will proceed while tactics determine how it will proceed. The major strategic challenges for ?rms encompass how to please customers, win orders, and simultaneously achieve ?nancial objectives on an ongoing basis.
For example, a ?rm could have a strategy to build market share by selling the lowest¬priced product in its market. After implementation of the strategy, the competitors will react, and the ?rm’s strategy will need to adapt to meet the new challenges. There is no stopping point and no ?nal battle. The competitive cycle continues on perpetually. An organization’s strategy should evolve over time as a blend of the intended strategy and the ?rm’s responses to events, learning from experiences, and the emergence of new information and ideas. It is an iterative crafting process of making and implementing decisions, observing, analyzing, and learning from the results, and then making decisions anew. To create, plan, and implement strategies, one should ?rst learn to think in a way that combines the rational and the intuitive in analyzing both hard and soft data to arrive at a unique interpretation of opportunities. The steps contained in this paper will guide you through the process of formulating and implementing strategy. Regardless of their content and brilliance, though, strategies will not be successful unless they are implemented effectively and updated regularly.
Many managers have a disdain for strategy and strategic planning, assuming that they are too theoretical for practical use. Every successful company however, bene?ts from an effective strategy. The strategy might have been developed through formal analysis, trial and error, intuition, or just luck. Regardless of its origin, a strategy was indeed executed, whether managers were aware of it or not. If a business has an excellent strategy and effective implementation, it will likely be successful. If a company has a poor strategy, however, it is probably going to fail in the long run. But what if a ?rm has strength in strategy formulation or its ability to implement, but not both?
We know that some businesses have exceptional strategies and succeed in spite of mediocre operations. For others, it doesn’t matter how well they make or deliver their product because nobody wants it. Great implementation simply cannot compensate for a poor strategy. Having an effective strategy, though, is not necessarily more important than effective implementation. In the end, we must acknowledge that a company needs both to guarantee success. Strategy is a long¬term concept and, importantly, deals with change. The leader of a business, in seeking a prosperous future, must consider what might lie ahead and understand the driving forces of change and their likely impact on the business. Managers must determine which actions they should be taking now to prepare for what they expect in and desire for the future. Tactics, in contrast, focus on the present. Tactics emphasize taking actions to execute the strategy, such as meeting demand, satisfying customer needs and desires, improving efficiency, and controlling quality and costs so as to make a pro?t and meet other short-term goals.
Evidence that a business’s current strategies and operations have been effective includes current pro?tability and positive trends. Management must continually question whether these current strategies will continue to be successful in the future. Although some strategies last a long time, successful strategies do not last forever. Environments evolve, competition intensi?es, and requirements for leadership talent shift. Strategies must transform in response. To bene?t from using the strategic management process to develop and implement strategies:
i. Use it to provide a framework: You can use the process to face and prepare for the future. This also requires attention to the present and the short¬term horizon.
ii. Let it guide you logically while requiring creativity: The process requires the team to generate ideas as well as consider the administrative details and functional activities that must be coordinated for successful strategy implementation.
iii. Ensure widespread participation, which culminates in decisive plans: As a result, the process improves communication, motivation, and execution.
“Every activity should begin with a vision, purpose, goals, and objectives. These dreams are not likely to be realized without an effective strategy.”
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The article in an excerpt from Himadri Chatterjee’s research paper Strategic management: An Inquisitive outlook, which can be downloaded here.
