Many organizations put significant effort into their strategy development process, only to be disappointed with the results down the road. Getting an organization to implement strategic change is hard – sustaining that change is even harder. Several principles can increase the chances of success in activating and sustaining your strategy.
Business leaders often confront the challenge of how to sustain their strategy when they are several months into the implementation process. In fact, that question should be asked at the start of the strategy development. A strategy that is fact-based, anticipates changes in the market, and appropriately stretches the organization is much more likely to be sustained.
Being market or demand-driven is increasingly important for competing in today’s environment. In most categories, supply exceeds demand. Consumers have more choices than ever before and more information to help them make decisions. Companies that win are those who analyze the marketplace to determine which consumers are most profitable for them to serve, deeply understand the demand of those consumers, satisfy that demand in a differentiated manner, and align their entire organization against those priorities. Having a fact base to precisely define these priorities leads to a highly actionable and effective strategic plan.
To be anticipatory, it is important to understand and build strategies around the latent and emerging demand of target consumers, not just their current demand. Current demand is what consumers can articulate today. Companies typically know these expressed needs – and so do their competitors. A key to success is to discover the unarticulated or latent needs of consumers and develop hypotheses about future demand. There are several techniques that companies can employ to anticipate demand. These include analysis of macro-economic trends, consumer trends (e.g., lifestyle, work style, fads, demographics), analogous categories, and Internet buzz. These techniques ensure that your strategy is not only built on what consumers demand next year, but lays the foundation for what they are likely to demand in three and five years.
Setting the appropriate goals is another essential component of a sustainable strategy. Goals that are too closed-in will fail to inspire change within an organization; goals that are too lofty will cause employees to disengage. The strategic plan should stretch the company to heights that employees believe are achievable. Demonstrating the path to success and everyone’s role in that process is important to inspiring the organization. Having a mental model helps everyone understand the strategy and guides their individual actions.
Successful companies have a plan for winning and regularly revisit it. Great companies align their internal operations to be in total support of the plan and regularly communicate that message to their employees.
A mental model is the same picture in every employee’s mind of how their company is going to compete and win – and their own role within that plan. It simplifies a potentially complicated strategy, allowing everyone in the organization to internalize the strategy and be guided by it. It enables managers and employees to independently make critical decisions on a daily basis that are aligned with the strategy. Without a strong mental model, strategy can become open to interpretation.
For a company’s mental model to work, senior leaders need to make sure that all functional heads understand its key messages and that the messages are conveyed to department heads and down through the organization.
Successful organizations are often described as having a winning attitude or culture of success. The mental model supported by a strategic fact base creates comfort for employees because they understand the larger picture and their important role within it. From that comfort springs confidence, which is the hallmark of high-performing employees and winning companies. That confidence encourages employees to commit, work hard, persevere when challenges are encountered, and take appropriate risks when faced with uncertainty. It engenders a positive work environment and productive behaviors, including fact-based decision making, collaboration, and continuous improvement.
Last, it is important to recognize that strategy is a continuous process, not a periodic event. Too often, companies put significant effort into creating a strategic plan only to have it sit on the shelf and revert back to business as usual. To establish early momentum, it is also important to identify a manageable number of specific initiatives to activate the strategy with clear objectives, action steps, and roles and responsibilities. Detail what needs to happen in the first 90 days, and look for early wins. A Program Management Office can help sustain the momentum by tracking initiatives and ensuring that sufficient resources (talent, headcount, and funding) are applied to the new strategy.
For a strategy to be sustained, it must also be updated to stay current with the dynamic business and economic environment. Business leaders must revisit their strategic fact base to understand how demand and corresponding opportunities have evolved. While you don’t want to change course too dramatically and too often, you must stay flexible to adjust as the market requires.
Annika Olson is a Principal with The Cambridge Group. She focuses on developing demand-driven growth strategies, including portfolio strategies, brand strategies, and innovation. She has assisted U.S. and multi-national clients in the food & beverage, household products, media, financial services, and B2B industries.