Strategy
Overview

"In strategy it is important to see distant things as if they were close, and to take a distanced view of close things."

Miyamoto Musashii

Is the red side internal (at the back of the cube) or external (nearest to you at the front)? Your perception is your reality and your perception of the world will determine your response to it. Now try to see the cube the other way.

Just as it can sometimes be difficult to see the other perspective of the cube, so in business, managers become conditioned to viewing the world in a particular way.

At Hard Management we help managers to attain a perspective that shows the critical performance drivers in sharp focus - and then develop their skills so that they can take the appropriate actions to drive sustainable competitive advantage.

"The error that some managers make is that they see all of the change and all of the new technology out there, and they say, “God, I’ve just got to get out there and implement like hell.”

They forget that if you don’t have a direction, if you don’t have something distinctive at the end of the day, it’s going to be very hard to win. very difficult …

Some managers think, “The world is changing, things are going faster - so I’ve got to move faster. Having a strategy seems to slow me down.”

I argue no, no, no - having a strategy actually speeds you up."

Michael Porter

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Strategy is a word that is so often misused that we felt the need to define what we mean by it. Similarly there is a wide variation in what people understand by a Business Plan and how one is created.

Strategy

The path by which you create sustainable competitive advantage. It is long-term and is concerned with the type of decisions that require substantial investment of time, resources and capital; decisions that will have an impact far into the future.

Strategy is about focus - what will you do and what will you not do with regard to:

  • markets
  • products
  • customer and supplier relationships
  • skills ... etc

The development of strategy demands that we step back from the business and gain a broader perspective.

 

 

Business Planning

The process of converting strategy into action plans for the next year (generally). Typically a business plan will have sections relating to:

  • markets
  • the marketing mix
  • products
  • promotion
  • price
  • place
  • competitors
  • suppliers
  • production
  • people
  • timing
  • finance

 

The Pitfalls

There are dangers associated with business plans!

  • the weight of detail blurs the critical success factors
  • conventional financial analysis discourages investment
  • resentment as the people closest to the "coalface", interacting with customers and suppliers, are told what is important by people furthest from the coalface.
  • action plans are not integrated into daily plans

 

Overcoming the Pitfalls

The Hard Management approach overcomes these dangers by:

  • ensuring that the performance drivers in the business are clearly identified and measurement systems established - what gets measured gets done!
  • conventional financial analysis is balanced by new approaches that value intangibles such as brand, relationships, skills
  • involving people throughout the organisation in the planning process. As Deming said, "If you want to know how to put the wheel on a car better; ask the man who puts the wheel on the car."
  • using approaches such as the Balanced Scorecard; making strategy an integral part of everyone's everyday job. Developing the leadership skills of managers.

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