Attention CEOs! Why You Should NEVER Underestimate the Importance of Having a Strategy
I confess, as a CEO of a management consultancy, it irks me when some people dismiss the importance of strategy. I’ve heard people proudly proclaim that they don’t have, or need, a strategy. Even the great Richard Branson in his book Losing My Virginity explains how Virgin “just gets on with it” without having a strategy.
Yet the same people would never consider undertaking certain activities without having a basic plan in place (that’s all a strategy is after all, a plan). For example, they go to great lengths to plan every detail of their holiday; compare airline ticket prices, book accommodation, get visas, rent a car, plan which sites to see etc. Also, they would never accept that the manager of their favourite Premier League Team enters an important game without a plan in place. You get my point, right? Any important endeavour deserves to have a good plan.
So why does strategy have such a bad rep with some people?
Well, I think there are two reasons. First, not all strategies are created equal, and some companies just have bad strategies in place. But the second and more important reason is that too many companies have an implementation problem, not a strategy problem.
According to a Harvard Business Review article authored by Robert Kaplan and David Norton “… On average, 95% of a company’s employees are unaware of, or do not understand, its strategy. If the employees who are closest to customers and who operate processes that create value are unaware of the strategy, they surely cannot help the organization implement it effectively.”
What does this mean for you? It means not only should you have a –good- strategy in place, but you have to focus on proper communication and implementation. I will give you two quick and easy to implement ideas when it comes to strategy implantation. One idea is to make strategic plan updates part of your weekly executive meeting (we do this at Falak). The other idea is to have monthly strategy progress meetings. Here the executives are questioned/grilled on how the implementation of your strategic plan is going.
Is a strategy still necessary in times of constant change and disruption?
Yes, absolutely, because the act of creating a strategy involves scanning the technology horizon to anticipate the impeding breakthroughs and threats. It forces you to get out of the “business as usual” mind set and work “on” the business rather than “in” the business. Of course, even with the best strategy in place the unexpected can still happen, but I believe that those companies who have the professionalism and discipline to plan ahead, are the ones who are best prepared for the unexpected.