Wednesday, March 23, 2016

Keep Your Eyes on the Ball

Prior to enrolling at Carnegie Mellon, I worked for a small software company in the West. I watched the company grow from 160 employees from my time of hire to over 700 by the time I left. There were many changes to the day-to-day operations, and the monthly results were like roller coaster. The CEO constantly lectured about the vision of the company, and his extremely high aspirations for it, but I couldn't help but to feel that the strategy was lacking development, or that the strategy hadn't been defined. The closer I worked with executives, the more I realized that my worst fears were likely true: all the high-ranking employees of the company exhausted their time fighting the company's day-to-day fires. When I think back on my experience with those executives, I am reminded of the popular mantra in baseball "keep your eyes on the ball", reminding a hitter where to focus her vision (on what she's hitting, not where she wants the ball to go). 

The papers “Your Strategy Needs a Strategy” and “What is Strategy” resonate with my fundamental beliefs about positioning a company for success, and what I felt was lacking at my former employer. As I mentioned, I don’t believe there was a firm strategy in place. In “Your Strategy Needs a Strategy”, it is recommended that at least 30% of the CEO’s time is spent in strategy discussions, which is not what was happening among any of the executives at my company. We learn that there are 4 main types of strategy; an executive team chooses a strategy based on the type, (predictability and malleability) of the industry. However, there is a 5th, unwanted strategy, which is simply survival. Survival is now the dominant strategy at my former employer I believe because there was never a strategy in place to begin with. This snippet from the article describes the situation perfectly: “... a survival strategy requires a company to focus defensively - reducing costs, preserving capital, trimming business portfolios."

Based on the Michael Porter paper “What is Strategy”, we understand that there are three key principles in strategic positioning: creation of a position, making trade-offs, and creating a fit within the company’s activities. I believe, at my former company, that whatever strategy was in place to begin with was replaced by day-to-day minutia which left no room for proper planning and strategy. A position had been created, and the company’s activities fit within the industry, but after several years too many trade-offs were made, leaving behind a skeleton of a company.

Strategic planning and continued “strategic maintenance” are crucial to the success of any company. I was fortunate (?) to witness first-hand what happens where there is a lack of strategic focus on the part of the executives at a company; these two articles reinforce this knowledge. Choose a strategy, and stick with it. Don’t get so swallowed up in the running of the business that you lose focus on what really matters for ultimate success. 

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