Marketing forklore has it that years ago a new manager took over Parker Pens. His first action was to assemble the management board and ask them a very simple question: who is our major competitor? One by one the board members began to educate the boss with what they thought the answer was. One answered Shaeffer, since Schaeffer was in the ball pen business as they were.
Business leaders generally agree on the need for strategy. No business can survive without one because no matter how turbulent and intensively competitive an industry might be, the firm with the right strategies will always have superior results. Performing on top of the market requires a firm grip on strategy.
Executives many times have to make tough decisions to keep the business on track. Its just the way the job is. But the toughest of decisions comes in the gray areas. These are cases where you and your team mine all the data you can, and do all the analysis you can yet the situation seems inconclusive. Under such circumstances its easy to become paralyzed and seek any available route. But it is your responsibility as a leader to judge the situation fairly and take the right decision.
A study done by Maracon indicated that less than 20% of well-formulated strategies are executed successfully and, on average, firms deliver only 50% of the financial performance their strategies promise. If a well formulated strategy is not executed how can an organization expect superior performance?
How is your sales doing? There are three answers I can expect: very well, still pushing, not well. I meet with several senior business executives in several industries every year and I usually get such answers in confidence. No executive talks about how lousy his/her sales is, they only talk about how great it is when its doing great(and even when its not). But as every executive stands in the shower each morning, one thought that keeps him/her company is, ‘what do we need to do to capture maximum value from our efforts?’ And capturing more value is a function of a well articulated and executed strategy.
Maintaining a competitive advantage takes more than great timing or a single solution. Sustainable advantage requires a well-designed and well-executed strategy. This sounds very simple, but most executives don’t do it. The concept of strategy is still generally a misconceived idea irrespective if the wide popularity it enjoys in business literature. When executives fail the clarity test in their concept of strategy there cannot be a superior performance.
It is fundamentally wrong to think of strategy in terms of the competition. Strategy is about the customer and how to deliver value to him. Two key words stand out here: the customer and value. That is where I will like to begin this discourse.
The average business executive today claims that his organization is customer oriented. But many times the very word, customer has in recent times become one of the most ambiguous in management literature.
Considering the more than 70,000 management books on the subject according to Kiechel, strategy is an issue of great interest to business. No enterprise can survive without a strategy. You’re probably acquainted with the stories of companies like HiTv and Konga of late. Sad as those cases may be they clearly illustrate the fact that Nigerian companies as with their counterparts elsewhere still struggle with the understanding of what strategy really is. So what makes a decision strategic? How do you determine whether some set of decisions constitutes a strategy? And why does strategy matter?
Value is captured at the market place not at strategy meetings. The problem with several organisations aside from lack of a culture that promotes innovation is implemtation and execution of strategy already crafted. Like you know strategy itself is fundamentally about choices. After the decision on exactly how to play comes the question of how to implement and then execute the strategy.