Twice a year I host a Chief Officers’ Forum, where senior executive directors from some of the UK’s leading companies have a roundtable discussion on wide-ranging topics. At one of our meetings we agreed some golden rules for strategy development.
Which of them could help your organisation develop a better strategy?
Keep it simple, stupid. A simple strategy is easier to understand, easier to explain and easier to deliver. Tesco’s success in the 1990s and 2000’s had four ‘simple’ areas of focus as the core of the retailer’s strategic agenda – UK grocery leadership, A serious international business, As big in non-food as food, and a £1 billion services business. A key to Tesco’s success was that the executive team relentlessly and persistently pursued its delivery and, as a result, everyone across the business understood what was required of their teams.
Be bold. Companies gain a strategic advantage when they are the first to profitably exploit a new opportunity in their market. You don’t always need to be first, but you need to be the first to succeed and this requires boldness and the willingness to take prudent risks.
A good strategist is a good storyteller. You need to tell a compelling story over and over again. This requires passion, clarity and stories. People remember and relate to stories that exemplify your strategy far more than they do to the facts and figures that underpin them.
Challenge assumptions and conventional wisdoms. Sky transformed TV viewing in the UK by challenging the assumption that people will only watch free-to-air services. While others, such as BT, have sought to follow and gain a share, Sky’s willingness to challenge assumptions and take action has still given it an advantage over other players.
Strategy = informed choice + timely action. Strategy is about choices and trade-offs, which require useful data rather than ungrounded opinions. Action is the essence of strategy and its timing is crucial. For example, many companies who perform best coming out of a recession are those that were able and willing to invest in marketing, R&D and acquisitions during the downturn (see here and here).
Focus. You can only be successful is you focus on a few key areas of the business. How many is too many? The forum’s view was that three priorities at any one time were probably enough for most executive teams. Dabbling in too many things will drive failure.
Ideas are the currency of strategy – spend freely. As a leader of your business, be a big spender and sharing your ideas. Measure your success by the number of other people in your organisation that present back to you your ideas as their own.
Have an owner for the growth agenda. While operators own the growth agenda over the next 12-24 months, with clear action plans, it is essential that someone in the business owns the agenda for the next 2-5 years. This person may be the CEO or the Chief Strategy Office, but without a named person there is a danger that your business will struggle to deliver sustainable growth
Avoid getting strategy confused with planning. In a McKinsey survey a few years ago, less than 25% of senior executives agreed that they made big strategic decisions during their strategic planning process. Strategy doesn’t really happen when you’re planning and you need to find other opportunities – both formal and informal – to develop your strategic thinking and approach.
© Stuart Cross 2019. All rights reserved.