I am often asked what the key to a developing a successful strategy for a business is, and after giving the usual stock answers that all consultants give I actually started to think about it and wondered if, as with so many things there are some, for want of a better word, universal strategies that are crucial for any company, whether a new start up or a multi-national. It seemed like a fair challenge given the differences in structure, operation, wants, needs and so on across the vast spectra of business types and models, but an interesting project none the less. I started by thinking about businesses in general terms. Are there things which businesses want and need that are common to all businesses and which can be clearly defined. This second criteria was crucial as you could argue that all businesses want to be successful, and start building a strategy structure around that premise but it wouldn’t be universally applicable because success to one company is not success to another.
An example. Lets take company A, a new start up, reasonably backed and with a good business idea and a clear business plan, and company B a large multi-national plc with 100 years trading and a global presence. Success to company A is almost certainly surviving the first year intact, probably coupled with establishing a firm base from which to move forward. Company Bs success criteria are measured by returns to shareholders, profitability, environmental impact, cost reductions and so on. In other words a completely different set of objectives which are unlikely to be reached by a single strategy applicable to both companies. So lets refine our business needs. All businesses need to operate solvently. It is a legal requirement for a trading business to be able to pay its staff and cover its short term liabilities. What else? All businesses need to be able to plan effectively so they need some sort of reporting structure in terms of financials, productivity and so on. Anything else? All businesses need to know their current position in order to plan effectively. Knowledge is power after all.
So you can see how it is possible to begin to draw together some business commonalities that can have if not universal, then certainly broad brush coverage, being applicable to a large range of business types and sizes. The next step is to try to analyse these needs and further the wants of businesses and to try to find strategies that are fundamental to allowing those needs to be achieved. Here there is a crucial point to make to avoid further challenges moving forward. It is crucial to allow any strategic concept to fit into place comfortably. There can be a tremendous temptation to take a pet strategy and try to force it to fit as one might try to force the wrong piece of a jigsaw to fit. At the core of finding coherence in strategic planning is scrupulous honesty on the part of the analyst in terms of assessing whether a particular strategy fits or not. It can be extremely tempting to carry a strategy that we know has worked elsewhere and to “fudge” the prevailing situation to make that strategy appropriate. This is setting up for a fall.
Another example. There is a huge amount of industry buzz amongst consultants around six sigma process transformation. Let us be clear, six sigma was a Motorola project of the 1970’s specifically designed to reduce component manufacturing component failure to 0.0034% or 66 failures per 1000000 components produced. There are arguments over the success or otherwise of the programme for Motorola but it seems likely that it had an impact. However, there has been an increasing tendency for all transformation projects to require six sigma green and black belts and to be pre-destined to follow a six sigma path. This has been seen across industry sectors from manufacturing to services and across business scales from multi-nationals to SME’s. This is clearly a nonsense since the strategy was designed and developed to address a very specific business need within a very specific environment. How can it possibly be translatable without significant modification not simply in the roll-out of the strategy but in the underlying principles thereby rendering it something completely different. It is akin to you and I deciding to communicate in English but you having all of my work translated into Chinese – it is a questionable conceit at best.
So, how do we address the development of strategy from a start point of mutually shared business goals. Well, lets take the example of the need to establish a base of knowledge from which to plan forward. Here we see sub needs of establishing clear communication within the organization across stakeholder groups, a need for accurate and timely reporting of key information, an understanding of what that key information in and who it should be reported to, a standardization of reporting material such that it is understood correctly by all stakeholders and a clear understanding of what this information is to be used for coupled with a clear understanding of why it is important. Having established these criteria it becomes clear that the strategy required is a combination of stakeholder training in terms of communication and analytical ability, analysis of any bottlenecks in communication, addressing any areas of weakness and putting in place an atmosphere of mutual support throughout the process. Part of this is understanding that beyond the business needs being addressed there are individual stakeholder needs which may or may not fit comfortably alongside the business needs but also need to be brought into alignment.
You can see that there is at least the possibility of best fit strategy, and in finding a genuine best fit, the possibility of developing a cross sector coherence. Interesting stuff methinks…..
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