x Abu Dhabi, UAESaturday 22 July 2017

The best strategy is to make the right choice

The Life: For many organisations, writes Tommy Weir, the idea of strategy has been all but stripped of any real meaning.

Given the excessive use of the words "strategy" or "strategic" and every other version of this management concept, surely everyone in an organisation should be heading in the same direction?

Experience disproves that hypothesis because this all-important concept is one of the most overused and misused terms in the business vocabulary. "What should we do when we do not have a clear understanding of where we are heading?" asked one group of senior managers recently - just one group in a long line who regularly pose this question to me.

Witnessing this confusion first-hand made me question why so many are unsure what their company's direction actually is.

In my mind, it comes down to the confusion surrounding the strategy itself as, for many organisations, the idea of strategy has been all but stripped of real meaning.

Strategy is considered the high point of managerial activity and is so influential. Yet, there is definitely ignorance over its meaning and, even worse, in many circumstances only a dictionary understanding exists.

So, what does it mean?

Strategy is arguably the most critical managerial challenge facing any business. "Getting it wrong" leads to serious consequences. Additionally, the grand design is the first thing that needs to be put in place as it informs the other core managerial decisions.

To illustrate its role, draw an equilateral triangle. Label the bottom right vertex "Organisation Competence" - this is structure, job design, processes and culture. Now label the bottom left vertex "Collective Individual Competence" - this is your people, their experience, skills and mindset. Before any leader should attempt to address either of these, you need to define your "Strategic Direction" and "Competitive Advantage", which is what the apex of the triangle should be labelled.

Setting the strategy is the beginning point for leading. This source of contention in many, if not most, organisations should not go unaddressed or, worse, addressed only as a budgeting process - leaving the employees to think an organisational direction is in place when in reality there is only a budget.

Strategy is making choices about why, where and how to compete. The heart of a company's master plan is what it chooses to do and not do. It is the direction for the future. It is much more than a document created by hired consultants or even the off-site planning retreat.

The difficulty with strategy is that leaders are required to have clarity of thought and use rational analysis in the midst of incomplete information and complex circumstances. The future is never certain so the context in which a company's game plan is created is complex and tense with ambiguity.

But the context in which strategy is practised does not have to be complex and ambiguous. Many leaders have difficulty articulating their plan of action. Ask a leader to explain his or her company's strategy in simple terms and see how far they get. This brings us back to the triangle; if the direction is not clear then ambiguity sets in within the organisation. But when leaders are clear, they bring certainty for the employees to have the right structure, people and actions.

So when we speak of being strategic, what we really mean is to make a choice. Strategy is as simple as that, you are choosing. It is a high-stakes choice because you have to choose how you will compete (and hopefully win) in the future and you are doing it with an incomplete picture.

From my perspective, this is what freezes leaders in their steps. They like, want to have, certainty and when it is absent then confusion, even paralysis, sets in. To reduce this confusion you need to make a choice about how your organisation, department or even team will compete in the future. Make the choice.

 

Tommy Weir is an authority on fast-growth and emerging-market leadership, an adviser and the author of The CEO Shift. He is the founder of the Emerging Markets Leadership Centre