Tuesday, March 28, 2017

Importance of Strategy

Importance of Strategy

From the discussions in class it was clear that a business strategy is positioning of an organization to achieve its goal while the positioning being valuable and unique.[1] Strategy informs the organization where to go.  “Failing to plan is planning to fail.” Hence, it is important to have a strategy as it provides an idea as to how the organization is performing, and how they could improve. This begs for the question if strategy is important to an organization and to its success. Though strategies can’t guarantee profits, if sure can minimize the extent of loss to the organization as most often, strategies try to mitigate the future risks and threats. [2]
Strategy provides a sense of direction for the organization. Strategies help in performance evaluation and provide a yardstick for comparison with the competitors. The trends in the future as well as present opportunities and threats can be identified by strategies. This would provide the organization with a competitive edge. Strategic planning is usually guided by the mission and vision of the company. Usually, the strategic plan is for the organization as a whole. However, when the company gets big, there may be strategic plan for each department. Strategic planning is critical to business success.
To arrive at a good strategy, it is imperative to understand the company and its industry without compromising on the needs of the management. Many companies employ the brainstorming method to arrive at a strategy. Another method used is strategy development is SWOT analysis and many of the fortune 500 companies make use of SWOT analysis for strategy development.[3] However, there is no right way to develop a strategy for “strategy is an art, not science”. A strategic plan becomes effective if it is followed by an action plan as it ensures actions are taken to complement the strategy.[4]
The only way to survive in a constantly evolving environment is to innovate and have a strategy that will provide a competitive edge. As discussed in the “Your strategy Needs a strategy” article, there can various types of strategy- Adaptive, Shaping, Classical or visionary.  One would ponder as to which strategy would be applicable for an organization. I felt the rubrics provided by the author regarding the right strategic style very useful and can act as a road map for organizations. To ensure growth and sustainability in an industry, it is very important to understand the changes that are taking place in the in it.
There were two strategies that were used by my employer which paid them rich dividends. The healthcare setup that I worked for showed an unusual trend of slow yet consistent growth. There were countless meetings, brain storming session, development meetings held almost on a regular basis. Unlike other companies which had annual reviews, we had weekly reviews. The fact that senior management was present in all the reviews underscored its importance. The CEO would go over the mission and the vision of the organization at the beginning and the ending of the review. Initially, this ritual was exciting. However, after a couple of weeks the ritual seemed very boring and mundane. I had a chance to speak to my team lead about “this ritual.” He has been in the organization for the past two decades. He said the all the decisions made were evaluated in the light of the mission and vision of the organization and implemented only if it fulfilled the organization's mission and vision. He attributed the success and survival of the organization to this ritual. This made understand the importance of mission and vision to the strategy development. I could resonate this experience with the article “Building your Company’s Vision.”
Unlike the other hospitals, my employer had a department called “situation analysis department (SAD).” The work of this department was to think about all the possible situation the hospital may get in and how the hospital and its staff should react in that situation. These involved situations like changes in government policy, outbreak of epidemics, non-payment by patients. I thought, this would make more sense in military strike or international politics. Surprisingly, I realised the importance of this department shortly. There was a Chikungunya outbreak. Many hospitals turned away the patients as they had no idea what to do. Within a week, our hospital was able to train the work force and get the required drugs. Within a span of a month, our hospital became the centre of Chikungunya treatment. This not only saved many lives, but also got recognition to the hospital. I feel this process the SAD department was largely responsible in creating “Prepared Minds” as discussed in the paper, “The Real Value of Strategic Planning.”

In the beginning, strategy development would seem a daunting task to any organizations. However, its benefits are far reaching and numerous ranging from streamlining the operations, to engaging the staff as well as ensuring growth and increased profits.

[1] Porter, Michael E. "What Is Strategy?" Harvard Business Review. N.p., 03 Sept. 2015. Web. 28 Mar. 2017.
[2] "Mitigating Risk through Best Practices." Supply & Demand Chain Executive. N.p., n.d. Web. 28 Mar. 2017.
[3] "SWOT Analysis  - A Great Strategic Planning Tool." SWOT Analysis - A Great Strategic Planning Tool. N.p., n.d. Web. 28 Mar. 2017.
[4] "Creating an Action Plan for Your Business Strategy." BDC. N.p., n.d. Web. 28 Mar. 2017.

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