Fram­ing the right strate­gic ques­tion

Finweek English Edition - - Advertorial -

NEVER BE­FORE have there been as many busi­ness op­por­tu­ni­ties as to­day. The only rea­son many can­not take full ad­van­tage is most likely not be­cause they can’t find the an­swer – but they don’t know how to frame the ques­tion.

Speak­ing at the Uni­ver­sity of Pre­to­ria’s Gor­don In­sti­tute of Busi­ness Sci­ence (GIBS), GIBS Di­rec­tor, Pro­fes­sor Nick Binedell, to­gether with lec­turer, author and con­sul­tant Tony Man­ning, claimed the key to cre­at­ing a busi­ness strat­egy was this ‘fram­ing of the ques­tion’.

It is 60 years since the first au­thor­i­ta­tive book on busi­ness strat­egy was pub­lished, said Man­ning, how­ever the is­sue still rated the great­est chal­lenge by cor­po­rate man­agers is how to im­ple­ment a com­pany strat­egy.

Usu­ally when a sub­ject ap­pears to have no so­lu­tion, it’s be­cause the sub­ject mat­ter has never been ad­e­quately de­fined, said Man­ning. Man­agers not talk­ing the same lan­guage are there­fore in­ca­pable of tak­ing a strat­egy to its con­clu­sion. When it fails, pri­mar­ily be­cause it never had any wide­spread agree­ment or buyin from staff in the first place, then the very idea of strat­egy falls into dis­re­pute.

As many as 90% of strate­gies do not meet their ob­jec­tives, but Man­ning be­lieved not enough re­search ex­ists as to what strate­gic tools com­pa­nies use and there­fore where they go wrong.

Pos­si­bly, any one of the many strat­egy mod­els could be work­able if man­age­ment per­sisted with it to a con­clu­sion, but Man­ning felt mod­els were sel­dom given the chance to suc­ceed through weak­nesses in their im­ple­men­ta­tion.

He there­fore felt the process needed to be un­der­cut, with the start­ing off point be­ing the sim­plic­ity of lay­ing down some def­i­ni­tions and com­mon ter­mi­nol­ogy, as well as in­clud­ing all the com­pany staff in the process.

“At the early stage of strate­gic plan­ning it’s the buy-in you want to get, as it’s the start of an on­go­ing con­ver­sa­tion. The prod­ucts of to­day would never have been dreamed of 20 years ago had com­pa­nies not in­volved all their peo­ple both in de­sign­ing the right strat­egy and in its im­ple­men­ta­tion.

“Or­di­nary peo­ple are the ones most likely to iden­tify the rea­sons why a strat­egy is un­likely to get off the ground, and the most com­mon prob­lem is that strate­gies are un­clear. Staff who have to im­ple­ment that strat­egy will tell their line man­ager whether it’s un­clear or un­work­able, whereas se­nior man­age­ment of­ten will not.”

On the other hand, whereas broad def­i­ni­tions are good, some­times the strate­gic tar­gets can be too closely de­fined, forc­ing peo­ple to func­tion in si­los “and lose sight of the hill”.

Binedell sug­gested the less for­mal the process the bet­ter: the biggest mis­take com­pa­nies could make was ap­point­ing ded­i­cated ‘strate­gists’. “Once this pri­est­hood is or­dained, other staff feel re­lieved of in­volve­ment and your most im­por­tant source of in­no­va­tion is crip­pled.”

Binedell said where ex­actly com­pa­nies look for their strate­gic model needed to change, as Europe, the US and Ja­pan no longer of­fered the only so­lu­tions. He said one of the key macro is­sues fac­ing all busi­nesses to­day was the rise of emerg­ing mar­kets as a force in the global econ­omy. This was be­ing ac­cel­er­ated by the cur­rent global fi­nan­cial cri­sis.

“ The pop­u­la­tion of de­vel­op­ing coun­tries is about 5,5bn or 70% of the world’s to­tal, yet it ac­counts for only 30% of global GDP. Fully 80% of growth in the next 20 years is pro­jected to come from emerg­ing mar­kets. So the ideas of the fu­ture will come out of In­dia, China and Africa, which will also un­doubt­edly pro­duce ex­tra­or­di­nary in­di­vid­u­als who em­brace new mod­els. In­no­va­tion will come from these coun­tries find­ing so­lu­tions that match their unique devel­op­ment needs,” said Binedell.

He said 20 years ago no­body would have cred­ited that South Africa would even­tu­ally have so many world-class com­pa­nies – pos­si­bly more than any other coun­try as a ra­tio of GDP. “ The role of imag­i­na­tion in a fron­tier coun­try is not to be un­der­es­ti­mated,” he said.

Strate­gies, once agreed through an in­clu­sive process, also need to have their as­sump­tions tested, said Man­ning. Oth­er­wise, au­to­cratic man­agers can in­tro­duce hearsay

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