Marshalling the “strategy aspects” of business organisations – involve, institutionalise and restore
“Strategic aspects” of business organisations encompass matters that go well beyond the domain of strategy. We define strategic aspects to encompass all organisation artefacts that provide direction to the business and help navigate through uncertainty, at any level and frequency, and in any content or domain area. Hence “business strategy development” and “business planning” qualify as strategic aspects, just as “marketing strategy development” and “brand strategy development” do. On similar lines, matters related to “inorganic growth management” and “risk management process” are also strategic aspects of business organisations.
Strategic aspects of organisations suffer not from poor comprehension, but from inadequate treatment. The content and essence of these matters are well understood, stemming from extensive research and educative communication conducted by academia to business. However, there are significant gaps in the manner in which strategic matters are handled by organisations. Three of these gaps stand out: first, strategy development has remained exclusive affair; second, strategic interventions have largely been episodic; and third, strategic problem solving has found comfort in cold analytics, and has robbed powerful strategic concepts of their essence and grist, thereby relegating them to being number-oriented caricatures.
We first observe that strategy has always been the preserve of the exalted. The conceptions of strategy have traditionally been researched and built by academia; business strategies have been deliberated upon by governing boards and chief executives; and strategy execution guided by the executive leadership of companies. The magic wand to galvanise the hoi polloi has been “communication and storytelling”! Such an approach is at best flawed, and conceived without understanding and regard for the intrinsic motivation and useful knowledge of the employee executing against the strategy; and at worst, elitist and disrespectful.
The employee in the frontline, the supervisors in the second line, and the executive at middle levels, have all unique perspectives that will round out the understanding of the business context, the organisational context and the strategic problem at hand. Moreover, their ideas for solutions have gone through the heat of the coalface, and hence are well tested. Add to this the purely intrinsic motivation that the employee enjoys when she is an integral part of the strategy development process. Clearly, strategy development in the future will “involve” the peoples of organisations in order to generate better strategies and catalyse better strategy execution.
Our second observation is that, strategic aspects, in the best of organisations, have been episodic affairs. The debate on whether the business needs a new strategy is initiated by the board or the chief executive, and mostly insinuated by pricks of poor performance or stimulated by the swagger of overachievement. Even “business planning”, the most modest of strategic aspects, struggles to regularly find a place in the organisation’s annual calendar and to delineate itself from the process of “budgeting”.
Another case in point is the process of risk management. While risk assessment might well be conducted once in a few years, prompted by third party vendors and consultants, its mechanism and outputs remain firmly tethered to financial and quantitative analysis. Moreover, the exercise in most cases ends with the numerical output of risk analysis, and does not morph into the management of risk.
If strategy and direction were to be as important as business and organisation leaders claim it to be, then how does one explain such episodic coming to pass of strategic aspects? How do progressive organisations condone the fact that these are not “institutionalised”?
Our third observation is about the emasculation of powerful strategic concepts by number-hungry problem solving approaches. Consider the concept of “scenario planning” during strategy development or risk assessment exercise – a dynamic concept that is by definition predicated on “imagination”. Financial analysts have usurped the concept and turned it into a set of routinely conceived analytics and probabilistic estimations. Not to be found are the dynamic thinking of causal factors and the imaginative defining of divergent or adjacent scenarios. Consider yet the other example of “product portfolio lifecycle” – a concept that was central to marketing strategy development, but now increasingly lost to the marketing discipline. Marketing strategies are now replete with portfolios of tactical marketing actions and their cost-benefit analysis.
Yet another case in point is the organisational and people dimension of M&A. The glib talk around organisational culture in the M&A context translates into banal and unimpressive surveys that help classify the involved organisations under cultural archetypes. How is such analysis of any help? Where is the substantive research to understand doxastic or belief-states of employees about the value creation levers that have been expounded in the “deal thesis”?
Consider one last example in this regard: “differentiation” of brands. Marketing gurus have advocated ad nauseam the need for brands to be sharply differentiated. As brands grow in scale, brand marketers tend to get risk averse and round out the nature of differentiation. They predicate brand differentiation on more than one parameter, thereby robbing the brand story of its sharp edge. Such egalitarian thinking emasculates the concept of differentiation and stunts brand growth potential, for the sake of the surety of “low risk and mediocre performance”.
In summary, along with structural aspects, strategic aspects have the greatest leverage on business organisations, and ultimately on long-term business performance. The first step in marshalling strategic aspects of organisations is to extend their definition to much more beyond mere strategy. Business leaders with foresight will excel in strategic matters by involving employees, institutionalising strategic events and processes, and by restoring the essence and grist of a handful of powerful strategic concepts.