It is very surprising and alarming at the very same time when you realize that the executives of a company can’t explain the strategy of their company in one or two sentences. In today’s world, every company has a well-designed system and framework for everything but most companies still haven’t developed a framework to manage the most critical part i.e. how to develop and execute their strategies.
I used to work for an IT giant back in India, and I still remember in one of the town halls the regional head asked how many in the audience knew what was the company’s strategy or at least its motto. I think he wasn’t surprised at all when very few hands were raised. This is the sad truth in almost all companies, very few executives can honestly and confidently say answers to those simple questions. The thing is, companies with a clear, concise strategy statement - one that employees can easily resonate with and which they use as a guiding light for their performance in the company - often turn out to be the industry stars. Without a clearly laid out strategic plan, employees and managers are not clear on which opportunities to pursue and which to pass over. And without clear direction, they don’t know whether growth is more important than profits.
Here in this article, the authors stress on the 3 requirements that every strategy needs;
- Objective: Objective is that part of the strategic plan which almost every company has but not clearly defined. Most of the employees confuse the objective of the strategy with the motto of the company. According to the authors, a strategic objective should be the “single precise objective that will drive the business over the next five years or so”. It should be concise, particular, practical, and measurable and include a time frame within which it is planned to be executed.
- Scope: This is further split into three aspects such as customer or offering, geographic location, and vertical integration. The three dimensions may vary in relevance for each company. For example, in the case of my previous company TCS their prime priority was towards ‘customer’. The scope is not always defined as clear-cut as the objective, as it allows for flexibility by employees, but it should explicitly specify where the firm or business will not go.
- Advantage: This is the key aspect of a strategy plan. This helps in explaining what makes your company distinctive from its competitors. It comprises of two parts: A statement of the customer value proposition or why your customer should buy your product or service; and a description of the company’s unique attributes that allow it to deliver on its customer value proposition.
Can You Say What Your Strategy Is? By David Collis and Michael Rukstad