The Biggest problem with corporate strategy is trying to predict the future and to “dictate the marketplace.”!!!

21 Oct

Almost all strategic planning sessions start off with the vision, mission, goals, values, and objectives scenario – yes? This begs the question, how good is our track record for predicting the future – I bet it’s pretty bad?

Maybe it’s time to become radical, and to totally change our strategic start up design perspective. If I tell you that there is a far better way to hit the bull, more often than not would you be interested?

Would you consider yet another reality; May I change that perspective, and let’s see if that is still all true.

(My theory is if we change our perspective and not just our perceptions, we will get a much better look at the real problem, and the way we look at things, then creates scenarios in the brain, that keeps changing with the new perspective).

Because if we only believe we can’t predict the future with much certainty then we won’t bother planning it in much detail, will we? Safe to say; No one can predict with up-most certainty anything that is in the future, let alone what will happen next week…

Nevertheless, forecasting is of the up-most importance in business.

Therefore, strategist, and forecaster alike need to probe beyond that curtain of uncertainty, and predict what the eventuality could/ would be like if we stay, start the course with our current strategy.

(The academics teach us to apply the laws of averages here, to find the average, and then to summarise risk, and come up with a worst case, average and best case scenario.)

Now days we see a change, away from that norm, towards looking at broad spectrum analyse of strategic challenges – by firstly looking at both internal (environment) as well as external (environment) and scanning it for defects, and misplaced links, between structure and strategy…, translating into emergent strategy; There are two approaches to strategy making – a deliberate or emergent strategy. The deliberate strategy is analytical and structured – Vision Statement, Mission Statements, Strengths and Weaknesses (SWOT), Objectives etc.


On the other hand, the emergent strategy, as the name suggests occurs by chance or happens within the organisation without any long term planning. It occurs from the day to day decisions made to run the company at the tactical and routine level of the company.

By looking at what’s happening with our product or service first from the cradle to grave perspective daily, we see its transformation in steps; first from an objective view, and how other markets are reacting to shifts in economic climate, then the subjective view, will then dictate how we react or not.

These Two focal points here are now starting to become more and more apparent. Strategy is no longer a 5 year view; it’s a 5 month one.  It’s not so much always about the future focus that influences us as much as our immediate internal and both external focus on environments shifting and changing daily. We have become interlocked and co- dependent to some extent in almost all aspects with the strategic landscape and our environment, both physical as well as business  Change that took 5 years previously, now transpires in 5 months, things are happening fast, and becoming even faster. This is why we have to change the way we view strategy – a total mind shift, and paradigm, as well as perspective change is required. To become a Grand strategy…

Forecasters and strategist both are now changing their business perspective to adapt to this speed of change; their risk scope is more on 1) Environmental scanning, of the immediate environment, with the gathering of strategic intelligence across a broad spectrum’s of business activities and information as well as structures, and 2) scenario planning and mitigation – pre-emptive preparedness at operational level has become norm – resulting in what if – then what scenario testing and mitigation?.

The only thing that is sure is change.  So change in step with change itself makes sense, no more planning beyond a 10 year scope, first, rather be proactive every step of the way, this is the advice the pros give.  With this said, we face even more new challenges too.

It is not only the business concepts that we use to steer outer threats with, but also the way in which we construct and mange business internally, which could make us totally vulnerable, even subtle things like the underlying culture itself. Referring to the integrity and validity of certain kinds of management information, styles, concepts, policy, a procedure etc… that becomes the company culture – their way of doing things that could all too easily be compromised through the distribution of memes. A meme is broadly defined as a self-propagating or actively contagious idea – we imitate what others do, “because it works for them” – so it should work for us…then we do it too.

The best strategic plan is comprised of measurable objectives, strategic and financial targets for both short-term and long-term action, it takes into account both internal as well as external, forces; risks, strengths, weakness, capacity, capability and structures, as well as availability of resources…

  • Internal analysis will typically include the identification of strengths and weaknesses of your internal workings, staff, board and resources. Part of your internal analysis will involve devising a SWOT/ PESTEL/GAP/ CAPS analysis, which is simply a profile listing your organization’s strengths, weaknesses, opportunities and threats.

Studies have shown that we don’t place enough emphasis on our strategic targeting; we only concentrate on risk, profits and resources… strategic targeting involves by definition the following attributes; “The selection of potential customers to whom a business wishes to sell products or services. The targeting strategy involves segmenting the market, choosing which segments of the market are appropriate, and determining the products that will be offered in each segment. A business offering multiple products can determine if the various segments should receive one generic product (such as in mass marketing), or if each segment should receive a customized product (multi-segment), based upon the market’s diversity, maturity, the level of competition and the volume of sales expected. Also called targeting”…business directory 

Here are the system and levers of “Strategic Targeting”

Strategic targeting uses our IQ, – spelt IQ’Q. We rely on our IQ – IQ’Q. (Identify, Quantify and Qualify). To define the target firstly, then we mix the findings up with a GAP analysis.

 

We make our decisions based on intelligence and not on information. Intelligence is information that has been tested to make sure it is accurate. Then we analyse the target / objective within the following open ended principles:

 

  1. Identify the concept
  2. Quantify its attributes
  3. Qualify your deductions

 

Then we put it to the GAP analysis:

G – Geography (its natural features, infrastructure, suppliers, service providers etc.)

A – Attributes of geography (distance, reliability, maintenance, strategic position etc.)

P – Perceptions surrounding the concept and forgone conclusions.

 

The intelligence gathered from this simple exercise, is open ended, you decide where to stop, which direction to take, it keeps conversation strategic and focused and it becomes the focal point for departure.

We have designed a concept to deal with complexity simply called CAPS.

Where Objectives are planned in phases, CAPS helps us to plan them at every stage.

  • External analysis involves identifying political, societal, ecological and technological trends that affect your organization’s products, services or both from outside, those things you can’t easily control or have no control over at all. These are important to identify so you’ll know how to build contingencies into your strategic plan.

10 Reasons Why Strategic Plans Fail – Forbes.

1. Having a plan simply for plans sake. Some organizations go through the motions of developing a plan simply because common sense says every good organization must have a plan. Don’t do this. Just like most everything in life, you get out of a plan what you put in. If you’re going to take the time to do it, do it right.

2. Not understanding the environment or focusing on results. Planning teams must pay attention to changes in the business environment, set meaningful priorities, and understand the need to pursue results.

3. Partial commitment. Business owners/CEOs/presidents must be fully committed and fully understand how a strategic plan can improve their enterprise. Without this knowledge, it’s tough to stay committed to the process.

4. Not having the right people involved. Those charged with executing the plan should be involved from the onset. Those involved in creating the plan will be committed to seeing it through execution.

5. Writing the plan and putting it on the shelf. This is as bad as not writing a plan at all. If a plan is to be an effective management tool, it must be used and reviewed continually. Unlike Twinkies or a fine vino, strategic plans don’t have a good shelf life.

6. Unwillingness or inability to change. Your company and your strategic plan must be nimble and able to adapt as market conditions change.

7. Having the wrong people in leadership positions. Management must be willing to make the tough decisions to ensure the right individuals are in the right leadership positions. The “right” individuals include those who will advocate for and champion the strategic plan and keep the company on track.

 8. Ignoring marketplace reality, facts, and assumptions. Don’t bury your head in the sand when it comes to marketplace realities, and don’t discount potential problems because they have not had an immediate impact on your business yet. Plan in advance and you’ll be ready when the tide comes in.

9. No accountability or follow through. Be tough once the plan is developed and resources are committed and ensure there are consequences for not delivering on the strategy.

10. Unrealistic goals or lack of focus and resources. Strategic plans must be focused and include a manageable number of goals, objectives, and programs. Fewer and focused is better than numerous and nebulous. Also be prepared to assign adequate resources to accomplish those goals and objectives outlined in the plan.

By avoiding these pitfalls, you can create an effective planning process, build a realistic business direction for the future, and greatly improve the chances for successful implementation of your strategy.

The focus has shifted from how to do things to influence tomorrows outcomes through systems design, structures and policy, to why we do things the way they are done today…with people, by building intellectual capacity, and speeding up communication, by taking the sociological approach; a way of getting people to structure and perform at their peak – as focal point to strategy making and its success; I cover this subject extensively in my book; here…

What we do with people today will determine more where we end up with a certainness tomorrow, than what tomorrow will do for us by planning it today…

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3 Responses to “The Biggest problem with corporate strategy is trying to predict the future and to “dictate the marketplace.”!!!”

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