According to an ongoing study by consulting firm Booz & Company (with more than 2,350 responses so far), many business leaders seem to be losing their confidence in strategy, or at least in their own company's approach to it.
Key findings so far:
Key findings so far:
- Most of the respondents (53%) don't feel their company's strategy will lead to success.
- Two thirds (67%) say their company's capabilities do not fully support the company's strategy and the way it creates value in the market.
- Only one in five (21%) executives think their company has a "right to win" in all the markets it competes in.
What's going on here? Is something "wrong" with strategy?
While the world is changing so quickly, some say efforts to stick to a give strategy are futile, while others companies that have prospered for decades, essentially following the same strategy.
While the world is changing so quickly, some say efforts to stick to a give strategy are futile, while others companies that have prospered for decades, essentially following the same strategy.
- Almost two-thirds of the executives who have responded so far say their biggest frustration is "having too many conflicting priorities."
- An even greater majority — 82% — say that their growth initiatives lead to waste at least some of the time
BOTTOM LINE: According the the authors: "In their race for growth and their continued efforts to cut costs, many leaders forget the true enabler of profitability, value creation, and competitive advantage: a company's distinctive corporate identity.
This identity, as defined by what the company does rather than just what it sells, has been built up over time; it is grounded in the company's differentiating capabilities (what it does better than anyone else) and its "way to play" (how it provides value for its chosen customers). A company with a distinctive way to play, and the capabilities to match, has a natural advantage in attracting customers, employees, and investors.
This identity, as defined by what the company does rather than just what it sells, has been built up over time; it is grounded in the company's differentiating capabilities (what it does better than anyone else) and its "way to play" (how it provides value for its chosen customers). A company with a distinctive way to play, and the capabilities to match, has a natural advantage in attracting customers, employees, and investors.
Your own strategy must therefore clearly reflect your company's identity. You need to take into account your company as it is today: What do you do particularly well? How do you create value in the markets you currently serve? Your strategy must then look ahead to your overall chosen direction. How do you expect to create value in the future? What changes do you need to make, overall as one enterprise, to get there?
This is not purely a "market-back" or outward looking approach. Nor is it purely internally focused on your core capabilities. It is both. Only when you identify what you are great at (the few most important capabilities that work together in a system that is very difficult for others to copy) and how this greatness matches with market needs do you have a value-creating strategy.
The more disciplined you can be, looking at these critical questions with an eye for your whole company's strategy, the more relevant and robust your strategy will be. Yes, the world is turbulent. And yes, growth will always be important. But responding to market volatility and the need to grow with multiple, unrelated strategy initiatives will leave you where most executives report to be today: chasing too many strategies and lacking the strength required to win in the marketplace. The only reliable way to earn your right to win is to answer the question, "Who are we going to be?" — and define the company by what it does better to deliver value to customers than any other player.
Thanks to Six Disciplines, LLC.
http://www.sixdisciplines.com/_blog/The_Six_Disciplines_Blog/post/How_Relevant_Is_Your_Company%27s_Strategy/
http://www.sixdisciplines.com/_blog/The_Six_Disciplines_Blog/post/How_Relevant_Is_Your_Company%27s_Strategy/
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