“For want of skillful strategy an army is lost; victory is the fruit of long planning.”
Proverbs 11:14
There is perhaps no more succinct statement about the imperative for any organization to have an excellent strategy than this quote from Proverbs. Reading it again recently prompted me to reflect on my own experiences with setting strategy within the contexts of former corporate employers, current and past board experiences, and in advisory capacities with client companies. As part of this period of reflection, I have also read or re-read many leading authors on this topic ranging from Michael Porter’s Competitive Strategy to Lawrence Freedman’s 628-page tome titled Strategy: A History.
In my experience, strategic dialogue and planning at both the executive and board levels receive too little attention. Too often it is limited to a half day annual board retreat. Participants usually plod through a SWOT analysis that results in the adoption of some financial objectives on which management provides periodic updates and is ultimately measured. “Refreshing” the “strategic plan” often becomes simply an exercise of tweaking the organization’s mission statement and updating previously adopted financial objectives such as earnings per share, return on equity and return on assets. While these are important measurements of financial results, which may be reflective of a strategy chosen, they are not strategies unto themselves.
What is strategy and what is its purpose within an organization? In their book, Playing to Win: How Strategy Really Works, A. G. Lafley, former Chairman and CEO of Proctor and Gamble, and R. L. Martin, Dean of the Rotman School of Management, offer a practical definition: “… strategy is an integrated set of choices that uniquely positions the firm in its industry so as to create a sustainable competitive advantage and superior value relative to its competition.” They argue that strategy is really a matter of answering five key questions: 1) What is your winning aspiration? (i.e., purpose) 2) Where will you play? (geographies, products, market segments, etc.) 3) How will you win? (value propositions and competitive advantages, e.g.) 4) What capabilities must be in place? (core competencies, organization of the enterprise, key partnerships, etc.) and 5) What management systems are required? (systems, reporting structures, measurement tools, e.g.).
The product of answering this set of questions is a framework and process that can be understood and adopted throughout an organization and then used to set strategy for the enterprise, its brand(s), products, and the sectors in which it competes. By adopting such a framework for decision making, strategy becomes an organic part of a company and not just a static plan that gets removed from the shelf and dusted off for inspection once or twice each year.
Happy planning!
Greg Feldmann, President
Skyline Capital Strategies, LLC
