Creating a genuinely useful corporate strategy for your business
Updated: Aug 6, 2021
Classical strategy formulation doesn’t generate the ambition, energy and commitment needed to succeed. It’s a once-a-year plan that calls for uninspiring, incremental change based on existing capabilities and past performance.
It’s backward looking and too risk adverse as it’s anchored by previous performance, often takes up too much time to develop and as a result the leadership team’s intuition is stymied by analysis.
A classical strategy is about management (optimizing what you have) not leadership (going forward in a new direction) and will at best get compliance but not commitment from the organisation.
How can you tell if you have strategy problem? You have an annual strategy development cycle which results in a more-of-the-same plan that is announced in an email or a newsletter to the business and is promptly put into a drawer and forgotten about … until next year when it is dusted off for the next strategy development cycle.
The solution? Create a vision-based strategy. This means defining a vision and working backwards:
Where are we today?
Where do we want to get to?
How will we get there?
The trick is to stretch beyond what you think you can achieve (this is key to writing good OKRs, the in vogue strategic planning tool and also the nexus of timeless BHAGs) and go for step-change rather than incremental improvement.
By having a vision-based strategy you have the end goal (vision) as the stake-in-the-ground so this allows you to adjust the strategy over time as things change, but maintain the goal. You also create an inspiring and motivating future for the organisation that everyone in the company can rally around, it’s one of best leadership tools in your arsenal. A vision based strategy enables an organisation to define the future, to work towards a specific objective and this common vision shared by everyone in the organisation generates enthusiasm, commitment and energy.
A good vision should be clear and inspiring. The best vision statements are short because then everyone can remember them, and they are inspiring through the language that they use:
Become a $125 billion company by the year 2020 (Wal-Mart 1990)
Achieve zero net growth in operational emissions out to 2025 (BP)
A PC on every desk (Microsoft, 1987)
Collect and recycle a bottle or can for each one we sell by 2030. (Coca Cola)
Destroy Yamaha (Honda, 1970s)
The bottom line is that if you want to lead your business into a brave new world then you need a strategy that is ambitious, agile and inspirational – a vision-based strategy.