‘We are going to leverage the brand to drive performance and take our business to the next level.’
How often have you heard these or similar words at a presentation or conference? Perhaps you sighed, admired the sheer emptiness of the statement, or wondered if the same language was used at home. Should we have another baby? Let’s right size the family. We need to reorganise our domestic priorities. This demands the focus of six sigma black belts.
There are many explanations for corporate nonsense. Here are three of the more common:
- The draft presentation was reviewed by the corporate lawyers, the finance department, every business unit that was mentioned however tangentially in the presentation, executive directors, corporate communications, and marketing. Draft 17 was finally approved, offending nobody but satisfying nobody, including the intended audience.
- The speaker believed he was offering a significant insight. Disturbing.
- The company has no idea where it is headed. It has no clear goal and no strategy.
The last is surprisingly common. Every large organisation encounters from time to time shifts in the preferences or views of its customers, members or electorate. These shifts can be occasioned by technology developments or significant changes in markets. All demand a response from the organisation.
At this point, many management teams fail to grasp the distinction between expedients, goals and strategy.
If costs are increasing faster than revenues then costs must be cut. That is an expedient. It relieves immediate pressures but does not represent a goal.
If company wishes to achieve a target return on equity, or a political party wishes to win an election, that is a goal. But it is not a strategy.
Strategy is a plan. It is a longer-term plan, a grand plan. It is vital yet often misunderstood. Organisations announce a goal and call it a strategy. Others do not know where they are going and have no clear idea what to do about it.
For some corporate leaders their failure to grasp the basics of expedient, goal and strategy can be remarkable. A few years ago an incoming CEO of a major international company announced his mission as ‘Joining Up the Company’. Its meaning was unclear. Was the office in Bangladesh supposed to get cosy and exchange recipes with the office in Birmingham? Did it involve IT systems? Nobody knew.
There were no metrics by which it could be measured. There were no intended outcomes or actions. It was neither expedient, nor goal, nor strategy.
A strategy, a proper plan, for a political party, a club or a commercial enterprise, even a public service or utility, must identify its target market, and the needs, preferences and the depth of the pockets of its constituents.
It must also be acutely sensitive to the activity of the enterprise’s competition. It must decide the nature of the offering that will appeal to the chosen market and how the organisation will outperform competitors. This may be achieved through innovation, pricing, quality of service or product or distribution.
How much must be invested to achieve desired outcomes must be calculated, together with estimates of expected revenues (often an arbitrary target such as prior year plus 10 per cent). Supply chains, where appropriate, must be secured. And all this must be communicated internally and externally.
Such a plan is necessarily long but its summary must be short, a single paragraph or a single sentence. If you cannot achieve this then you don’t have a feasible strategy. Your staff, your key managers, your suppliers, your customers will fail to understand what you are seeking to achieve and thus unable to explain it to others. And none of them will be open to an hour of presentation setting out your all-conquering schemes.
Ikea is an example of a company with clear positioning in its markets and a sound strategy. Its goal is to be the world’s leading multichannel home furnisher. Its offering is built on Scandinavian design, competitive pricing, sharp branding and stores designed to lead visitors through its many product areas. Its international distribution is growing. Its online bloggers offer useful decorating and furnishing advice. In 2016 there were 783 million visits to its shops. It’s a great company.
No matter at what level you work in an organisation you will be involved in some way with strategy. At the extremes you will be the key perpetrator or the victim, the former a principal who has guided strategy, or absence thereof, the latter somebody who, on a day-to-day basis, has to deal with the fallout.
Somewhere in the middle there is often to be found a team of people with the difficult task of creating strategic sense for a company without a strategy. This process, demanded by impending financial results or presentations to analysts, investors or other critical interested parties, entails sifting through the random actions, pronouncements and policies of the most senior leadership and teasing out a semblance of coherence.
It can be a fascinating exercise but ultimately frustrating, as the ‘review’ process following its completion will be both tedious and long.
The message for those seeking new roles in the market place is simple: choose carefully your employer or one day you will find yourself in front of an audience and talking a load of leverage.