The tragedy of Corporate strategy
Despite being one of the key processes in any company, led by the CEO and under the responsibility of the management team, more than 30% of companies are not able to implement the defined strategy successfully.
Managers are challenged annually to improve on the previous year's results, but will next year’s results be satisfactory? The reality is that very few companies can grow year on year, and in a sustainable way. In the best of cases, resources are dedicated to defining the plan through market analysis and with the use of expert consultants, the result of which is a 200-page document full of good ideas and recommendations, which have yet to be put into practice.
In 30% of cases, the causes of failure come from a poor definition of the strategy. Decisions on what the main problems are and how the market will change in the future are based on opinions, brainstorming, or superficial SWOT analyses (Strengths, Weaknesses, Opportunities, and Threats). Few organisations visit the field and analyse what the bottlenecks and opportunities really are. In addition, market segmentation is compromised by not having the input of the real voice of the customer.
On the other hand, in 70% of cases, the main cause of failure is focused on the implementation of the strategic initiatives. These generally involve major changes to current processes, but low process standardisation and high resistance to change make the process extremely challenging. Although we can change the written procedure, every person works differently in everyday life, so even if the theoretical processes change, nothing changes in practice and therefore the results are not modified either. In addition, people are by nature resistant to change and will turn against anything that involves changing current ways of working, especially if they do not know why the change is happening, they do not feel involved in it, and they are not provided with adequate support during the transition. It is worth noting that 95% of employees do not know or do not understand their company’s strategy. How can they collaborate on the implementation if they do not understand it? A company can be defined as a group of people who use defined processes to generate value and deliver it to the customer. Therefore, deploying the strategy is, ultimately, a process of changing processes and developing people. So perhaps the key question is: How good are organisations at improving processes and managing change?
Experience in the definition and deployment of the strategy indicates that some examples of success drivers involve:
- Improving the current state analysis and process evaluation, and understanding of customers and competitors through field analysis and talking with data
- Understanding that the strategy must be aimed at improving or creating processes in the organisation, so that the improvements are sustainable and generate benefits year on year, and not just isolated projects based on investment
- Focusing efforts on actual problems and root causes, with a surgical approach, and based on current state analysis
- Involving the entire organisation in the strategy deployment and execution – everyone is essential and must feel essential. Strategy cannot be only a matter for managers, it affects the whole organisation, and everyone has to push it
- Executing quick, efficient shop floor changes – avoid year-long projects and turn processes into intensive short-duration activities, working as a team
- Managing change and overcoming resistance to change, not only through motivating statements and communication but also through the creation of frequent dynamics that put new behaviours into practice and turn them into habits
So, to define and execute the strategy of an organisation, with a robust process to ensure sustainable growth, year on year, it is necessary to do things differently. First, strategic planning must be involved; this is the definition of ambitious goals that will force employees to look "outside the box" and challenge the current paradigms. There must be an analysis of the market segments and trends of each one, execution of the voice of the customer in the field, discovering the reality of their thoughts and expectations, analysis of the change drivers, and definition of the characteristics that will set the drivers of success in the market in the short and medium term.
Next, the deployment of the strategy at all levels of the company is monitored. This will make it possible to involve all people (at all levels and in all areas) in the strategy execution, turning strategic projects into KAIZEN™ events, prioritising and adapting activities to the existing resources. The definition of the indicators that will measure the success of each initiative must be defined.
The follow-up of the implementation of initiatives is crucial for success. Thus, follow-up dynamics must be defined at each level to ensure that the strategic indicators are monitored and that there is a quick reaction to possible deviations with effective countermeasures. The coordination of resources and activities must be frequent, and the information must be accessible by all.
Finally, the monthly strategic review process that ensures the alignment with the goals and the definition of countermeasures must be made formal.
In the volatile market we live in, no company has an assured future. Only those with a robust process for strategy definition, deployment and execution will be able to adapt earlier and better to future changes, growing above the average for their markets.
#strategy and leadership
Get all the latest news about Kaizen Institute. Subscribe now.
* required fields