From drawing board to the real world

Implementing a strategy is an intricate balancing act. On one hand, organizations need buy-in and commitment to an end goal. On the other hand, organizations also need the flexibility to pivot when faced with unforeseen circumstances. On one hand, developing strategies calls for extensive analysis of market performance, industry trends, and so on. On the other, creativity and thinking “outside of the box” is required to formulate novel ideas. Simon Horan, MD at a leading consulting firm, summarizes this clearly; “Getting strategy done well often calls for trade-offs between delivering short-term results and implementing foundational changes that require time.”

In a competitive environment, strategy should be at the center of an organization, providing direction in ambiguous situation, and ease decision making. However, according to Collis and Rukstad, in order for strategy to be effective, the strategy needs to be comprised of certain elements – an objective, scope and distinct advantage. This premise builds on the ideas of several others we’ve studied in this course. One of the key ideas, put forward by Michael Porter, reiterated here in Collis and Rukstad’s article is that a company’s competitive advantage is the essence of their strategy. Without a competitive advantage, the strategy is essentially non-existent. The article “Have you tested your strategy lately?” by Bradley, Hirt and Smit also drives this idea home.

Without a truly distinct competitive advantage, the longevity of a company’s success is in question. An advantage over others is the path to sustained profitability. Reflecting on the small/medium business landscape in Nigeria, my home country, I realize that a lot of these businesses are launched based on the perceived attractiveness of a market, without much thought to how to differentiate. These business launch with unknown brands, prices in line with the rest of the market, and no additional value to the customer. This may work in new or emerging markets, but to take leverage the second-mover or follower advantage, it is imperative that businesses are able to have tangible differentiation.

The definition of a solid strategy is just the beginning. The implementation of the strategy is expected to bring about the change required to enter a new market or industry, or gain or maintain competitive advantage. It is widely known that organizations and humans are generally resistant to change. This makes it all the more important for a strategy to be widely communicated and understood throughout the organization. But more than communicating the strategy (the “what”, “how” and “when”), organization buy-in is required, which relies on employees understanding the “why” of the strategy.

Sources:
Bradley C., Hirt M., Smit S.: Have you tested your strategy lately? McKinsey Quarterly Report (January 2011)
CollisD., Rukstad M.:Can You Say What Your Strategy Is? Harvard Business Review (April 2008)