By Professor Marc Jones, Strategies for Growth, The University of Sydney Business School MBA program
Strategy is forward looking – it explains how you will achieve your vision in a manner which is consistent with your core values and raison d’etre. The essence of strategy is in articulating ‘where to play?’ and ‘how to win?’; decisions that align with a firm’s ambition.
During strategy development, the ‘elephants in the room’ need to be acknowledged in order to avoid baking toxic assumptions into the strategy.
Companies systematically overrate their degree of differentiation from their competitors; clear differentiation is more often an illusion than a reality.
‘Growth’ is not a strategy, it is a result. You don’t build shareholder value by focusing on shareholder value. You do so by focusing on your key customers, business model and employees. This is the principle of ‘obliquity’.
Unexpected stuff happens. Build flexibility into your strategy. In terms of decision making architecture, the organisational reflex should be to decentralise wherever possible to promote speed, ownership, and initiative. Centralisation should only occur in light of convincing evidence of substantial benefits.
Strategy development & design must be integrated with execution to maximise understanding, ownership and accountability. For any strategy, if you can accurately identify the top 3 things that need to get done to make it happen – and execute on them – your chances of overall success will be high. This is the ‘rule of 3’. An effective strategy will always incorporate a bias for action!