Nigerian Companies Rarely Have Strategy

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?

I speak to thousands of business executives in Africa annually on the subject of strategy and the unfortunate truth remains that Nigerian business leaders still have a hard time distinguishing strategy and operational effectiveness.

Some that seem to make strategic moves struggle with operational effectiveness which apparently impedes the effectiveness of the strategy. Many others confuse operational effectiveness with strategy and wonder why their efforts did not pay off. As usual they blame their failure on the Nigerian circumstances.

Before you run off and endorse that idea let me quickly remind you that the very purpose of strategy is to master the environment. Is is it the job of the strategist? Famed British banker and financier, Nathan Rothschild affirmed this when he said, ‘great fortunes are made when cannon balls fall in the harbour not when the violin play in the ballroom’. Strategy is a serious thing. It is the act of a general in the battle front. If you can imagine how the President of a nation will look at a General who excuses loosing a battle to harsh battle field, you will understand what it looks like when a business general blames his failure on external issues.

This is serious because businesses that ought to create jobs, pay taxes and develop the economy are failing everyday and who knows which will follow tomorrow. After all from outside everything seemed okay with Konga but here we are now. So I will like to provide a working definition of strategy but first let me clarify some dark issues around strategy. First, strategy can not make you the best. I know this will come as a shock since many executives are simply trying to be the best. The focus on being the best is a pretty dangerous one since by the way that’s something impossible. Superior performing companies do not compete to be the best. Their strategic focus is rather on being unique. Providing a unique set of values to target segment of the market.

Consider Netflix, Reed Hastings did not start out trying to be the best video on demand company. Instead the competitive strategy employed by the company was to deliver movies to the consumer in the easiest, most cost effective and convenient way possible. That’s seeking a unique position, not trying to be the best. You see, the drive to be the best locks companies in on competing on the same dimensions and nothing kills a company faster than that. Competing on the same dimensions means targeting the same group of customers and trying to create the same values to satisfy the same set of needs through the same channels at the same or slightly different price points. That’s strategic myopia and the path to corporate suicide. Don’t try to beat your competition on the same dimension especially if you’re trying to take on a well established business with a robust financial base. Blockbuster LLC, though began operations before Netflix began competing with Netflix on thesame dimension in 2004 because at this time they understood Netflix has become a threat to their business, they paid for that costly mistake by filling for bankruptcy in 2010