Recent research carried out by McKinsey Quarterly with 2,135 executives showed that most companies’ strategies are flawed and not ‘future-proofed’ to make sure that they are adaptable to changing market conditions. With 2012 ahead of us (and no doubt some globally challenging times ahead), we have detailed the main checklist that you should review to see where gaps lie in your company’s strategy and develop a future process for improving your strategy over the next 12 months:
1. Commit to following your strategy (but with some flexibility!)
2. Make sure you do something different
3. Understand whether your strategy taps into a true source of competitive advantage (and if it doesn’t, try and develop one)
4. Evaluate whether your strategy is granular enough about where to compete so you can make a difference to actions and the bottom line
5. Don’t rely on the past to plan future strategy (and also don’t rely too heavily on internal bias as this may give a blinkered view)
6. Ensure your strategy includes different scenario planning to take account of uncertainty
7. MOST IMPORTANT: Make sure you transfer your strategy from paper into an action plan
As documented by Porter and his 5 forces, all companies operate in markets surrounded by customers, suppliers, competitors, substitutes, and potential entrants and all are seeking to advance their own positions. The problem is that most companies continue to do what they have always done and not think about diversifying to beat the market. Remember, if you always do what you have always done then you will always get what you have always got…if you are lucky!
Make sure that you do something different in 2012 to create value and improve your strategy development process.
For a full reading of the article by McKinsey please visit www.mckinseyquarterly.com ‘Have you tested your strategy lately?’
For further reading on strategy development and competitive intelligence click on the links below: