Monday, March 27, 2017

Opening my eyes to how strategies are chosen

The article that I found highly informational among those from week 2 of the Strategy development class is “Your Strategy needs a Strategy” (HBR Reeves, Love, Tillmanns 2012). Coming from two years of working in one of the Big Four Consulting firms, Deloitte, I heard the word “Strategy” too often. However, never did I think on what the process was to select a strategy, as I sat through the many town hall-like meetings where our senior managers walked us through the presentations on strategy for the quarter or fiscal year. This article opened my eyes on the importance of studying your industry through two factors- Predictability (how accurately we can forecast demand, other metrics) and Malleability (extent of influence on those factors). This is the key takeaway for me from this article.
After reading the articles, I am able to put in place that the firm I had worked in my past, implemented a fusion of the classical as well as adaptive styles in drawing up the strategy for the firm. However, the both together classify as the latter itself. I say ‘classical’ because the big announcement with all the drum rolls (i.e., high emphasis) only came once a year. However, when things did not go as planned in a quarter, the leadership would revisit the strategy and lay more emphasis on certain aspects such as working more client hours rather than firm development projects. This is why the process in my opinion, was also adaptive.
The other two strategic styles are for firms with the power to change: Shaping strategy– for firms in unpredictable environments and Visionary strategy- for those that plan for products of the future. However, there is also a fifth strategy style that I thought was significant especially because it works for the situation when none of the four strategy styles mentioned earlier do not work. This is the survival strategy style. This is in the event of a highly unpredictable or cataclysmic change in the market of which a firm is part of. In this style, the firm gains a defensive focus- reducing costs, preserving capital, trimming business portfolios.

Towards the end of the article, the authors talk about the various traps the executives of an organization may fall into, while choosing the best strategy style. Among the three that were mentioned, “Misplaced confidence” was the one that I was able to connect with, from my experience at Deloitte I talked about earlier. Deloitte chose to take the adaptive strategy only because it was confident about the predictability and malleability of the industry it was market in. This worked well because Deloitte was probably right about its analysis of the market. However, this could have gone wrong if the firm was confident but was not right and had chosen a different strategic style. In this case, for instance, I would like to point out that if Deloitte had chosen to lean towards the classical style rather than adaptive, then it would have faced problems when things had changed as they did during one of the quarters while I was there. A yearly strategy here, would not have worked.

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