We commenced this series last week by defining a few terms that are often confused with strategy in business. We also gave examples of what values, mission and vision are before going ahead to define what strategy in business is. Today, we will take up the features and principles of strategy.
The features of a great strategy are:
It must have a goal: The first point of any strategic conceptualisation and development exercise is to establish strategic goals. Every planning activity will then revolve around the strategic intent in terms of actions to be taken, timing, sequence, resource allocation and deployment, etc. It is imperative that a strategic goal is achievable, even if it should also be a stretch.
It is executable: As mentioned above, the ultimate purpose of a strategy is to achieve some goal. This means strategy must be executable by those responsible for seeing it to fruition. The implication of this is that the people charged with the responsibility must have the capacity and resources to do what they need to do to sustain the required levels of strategic drive at every point in time.
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It should be measurable: The goals to be achieved by a strategic intent mean that there should be appropriate metrics put in place to allow for the measure of how well you are doing. If your strategic goal is to attain certain market share over a number of defined years, then you should be able to assess how well you are doing, at least on a quarterly basis, by measuring your gains in market share periodically.
It is simple in logic: Great strategy is often simple in logic. This means the basis of why it has great chances of success can be seen in the simplicity and truth of its logic. Simplicity in logic, however, does not necessarily mean it is easy to execute. Take, for instance, the Uber transport services. Uber simply (now we can say that) merged the demand for transport services with the availability of a vehicle nearby on a technology platform. As simple as it sounds, it didn’t seem obvious to most people on earth, and it was difficult putting all the pieces together literally worldwide within a decade.
It is timebound: We have mentioned that strategy generally takes a long-term perspective to issues. However, strategy is also timebound. This means a particular strategy that may work at some point in time in an industry or location may not work at some other time in the same industry or location. The Uber model could not possibly work thirty years ago and, for all you care, may need to be reviewed in another thirty.
It should be reviewable: Again, strategy is concerned with long-term goals and how to achieve them. However, the true value of how measuring how well we are doing, is to enable us to make periodic changes as may be required. In contemplating and making changes, we have two options: We can alter the strategy if it really is not working and there are compelling reasons to alter it without changing the goal(s). The second option is for us to alter the goal, if, again, we have compelling reasons to do so. In either case, what is important is that we have to put in necessary thought in making the changes as much as was required of us in choosing the gaols and conceptualising and developing the strategy in the first instance.
The principles of strategy development are as follows:
Strategic positioning: After determining what your strategic goals are, positioning your business is the next key to executing your strategy. Position refers to how, when, and where you want your business to be over a period of time both vis-à-vis your current position and in comparison to your competition. It also means how you are to do what you want to do to gain competitive advantage.
Business positioning is both physical and metaphorical as it answers such questions as ‘Who should be our customers?’ ‘Where should we locate our business?’ ‘How should we serve our customers?’ ‘How should our goods and services be priced?’ ‘How rapidly should we expand?’ Determining your strategic business position bears on what you can do, how you can do it, and what success means to you.
Commitment: Ab initio, strategy development demands that corresponding plans are long-term in nature. This will require resolve and stamina in taking actions, sustaining them, and changing routes as may be expedient. Without commitment, resolve and stamina, you may give up just about when the additional effort required to achieve expected results will only be marginal. Similarly, without effort, you may fail in leveraging on your successes to do and achieve more.
Initiative: The moment you are able to sense or sight an opportunity, you need to seize the opportunity if you are to stand any chance of success. The way to gain and keep initiative is to first analyse the situation carefully and then seek hidden opportunities and/or new solutions to issues. The moment you are able to do the two, your next challenge is to act assuredly as immediately as your plans require.
Efficient use of resources: As long as you are achieving your goals, you are effective. But to be and remain competitive and profitable, you will also need to be efficient in the use of your resources. This will require that all your resources should be put to maximum use but within the limits of the law and any self-imposed terms. Efficient use of resources require that the most value is extracted from the use of each type of resource.
Fallback options: Strategic planning demands that you have multi-route options to achieving your goals. This means while your goal might remain ‘sacrosanct’, the route you take might alter from time to time depending on the realities on ground. And this brings the need for you to take environmental factors into consideration in developing your strategy. Needless will be for us to say that given technological, cultural and infrastructural differences, your strategy options in a developing African economy would likely be different from the strategic options available in the same industry in a developed Scandinavian economy.
We have introduced the features and principles of strategy today. Next week we will take up the elements of strategy and strategic frameworks.
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