Thinking strategically

According to McKinsey "many successful companies have not advanced beyond rudimentary levels of strategic development".

 

Although it is not possible to make everyone at a company into a brilliant strategic thinker, it is possible to achieve widespread recognition of what strategic thinking is. This understanding is based on some relatively simple rules.

Strategic thinking seeks hard, fact-based, logical information. Strategists are acutely uncomfortable with vague concepts like "synergy." They do not accept generalized theories of economic behavior but look for underlying market mechanisms and action plans that will accomplish the end they seek.

Strategic thinking questions everyone’s unquestioned assumptions. Most business executives, for example, regard government regulation as a bothersome interference in their affairs. But a few companies appear to have revised that assumption and may be trying to participate actively in the formation of regulatory policies to gain a competitive edge.

Strategic thinking is characterized by an all-pervasive unwillingness to expend resources. A strategist is always looking for opportunities to win at low or, better yet, no cost.

Strategic thinking is usually indirect and unexpected rather than head-on and predictable. Basil Henry Liddell Hart, probably the foremost thinker on military strategy in the 20th century, has written, "To move along the line of natural expectation consolidates the opponent’s balance and thus his resisting power." "In strategy," says Liddell Hart, "the longest way around is often the shortest way home."

It appears likely that strategic management will improve a company’s long-term business success. Top executives in strategically managed companies point with pride to many effective business strategies supported by coherent functional plans. In every case, they can identify individual successes that have repaid many times over the company’s increased investment in planning.

The attached article provides some useful points Thinking strategically

Don’t just focus upon survival…

In the same vein, Bain & Co. recently released their study of over 1430 executives from a broad range of industries, reporting similar responses. According to the study, 75% of executives agree that their companies "will use this recession to improve our competitive position."

What does this mean for your organisation?

With the majority of organisations becoming more strategic, if you’re just focusing on survival, then it might not be in your future. Strategy-focused companies are much better prepared to respond to our turbulent economy than those focused only on the long term.

Strategy-focused organisations:

• Don’t have to create a brand-new plan of action to respond to the recession, they already have one they can alter
• Know what threats they face with the current crisis, and what opportunities have been exposed that they can capitalise on
• Have solid bases on which to make tough decisions, instead of having to rely on emotions or whims

If your organisation’s response to the current downturn has been to ignore long-term strategies, now is the time to join the 82% of companies who are using the downturn to improve themselves- because statistically, your competitors are probably already among them.

The quicker you can act, the better you can serve your customers

The recession is quickly becoming a fight to retain customers, and competition will only increase as it continues. By making strategic decisions to meet changing customer needs, organisations can secure their survival much better than by simply trying to "work harder and hope for the best."

Even deciding where to cut costs is better done strategically. Right now, as organisations have to make the tough decisions of laying off workers, cutting benefits or even cutting the services that they offer customers, the companies who have taken the time to base their decisions on careful thoughtful analysis will see much better returns than those who wait until the last minute. Short-term focused organisations making frantic changes risk making unnecessary layoffs or ceasing important services, costing both themselves and their customers.

Survival in our current economic landscape will require quick decision-making and strong leadership- both of which are cultivated through strategic focus. Don’t allow your organisation to become focused on mere survival, but instead cultivate your strategy and come out of the downturn stronger, more agile and unified towards reaching your goals! (data originally tipped off from a post on Slacker Manager.)

Innovating our way out of recession

By now, virtually everyone has chimed in on how innovation is the only way out of the recession….

Trendwatching.com are a pretty insightful bunch and their updates are always worth a look. Check it out: Innovation Jubilation

Don’t ignore the facts about social media

Expect the Groundswell to continue, in which people connect to each other – rather than institutions. Consumer adoption of social networks is increasing a rapid pace,  brands are adopting even during a recession,  so expect the space to rapidly innovate to match this trend.

 

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