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Almost every organization strategizes with the expectation that it would result in the achievement of management-defined objectives. In a number of instances, initiatives are unsuccessful or less effective than anticipated.
Strategy is inherently complex, and its explanation involves complication, but its execution must be straightforward. Strategies must be basic enough for executives at all levels of an organization to comprehend, communicate, and remember in order to have an impact on daily operations.
Choices are at the heart of strategy. Rarely does a single large bet lead to a company's success.Almost all effective methods are based on a multitude of options.
The majority of businesses attempt to reduce their strategies into succinct statements that are ambiguous and fail to instruct employees on how to set priorities or make decisions in order to reach predetermined goals.
Setting "Strategic Priorities" is a more efficient method for decoding strategy into a handful of "activities" that the organization should take to achieve it over the medium term.
Such actions should be quantifiable or capable of demonstrating concrete progress to the employees, so that their faith in the actions can increase.
Numerous diverse businesses that compete in multiple industries, product lines, and client groups rely on Strategic Priorities to advance their strategy.
Greater than two-thirds of S&P 500 corporations disclose their explicit midterm ambitions.
S&P 500 firms identify their Strategic Priorities with a variety of terms, ranging from the mundane to the novel, e.g. (Areas of Focus, Interconnected Ambitions).
Using empirical research, a study of 494 S&P 500 index businesses done over a period of 4 to 5 years identifies the causes of strategy failure. Lack of clarity in a company's stated goals is cited as one of the primary causes of failure, according to the study.
The study found that successful organizations among those analyzed had Strategic Priorities that were explicit, actionable, and quantifiable. The study provided a summary of the 7 guiding principles for determining Strategic Priorities:
- Curtail the total priorities to a few.
- Concentrate on intermediate term actions.
- Keep sights toward the future.
- Take the difficult decisions.
- Tackle significant weaknesses.
- Offer tangible direction.
- Bring the top leadership on one page.
Unless converted into effective actionable items, strategy becomes flowery verbiage with little practical application.
Let's examine a few of the fundamentals in greater depth.
Curtail the total priorities to a few.
It is detrimental to overwhelm staff with all of the options and connections that comprise a business's strategy. Limiting the number of priorities to a few sets the parameters for employee work and fosters concentration.
By communicating a handful of Strategic Priorities, it is possible to concentrate attention, energies, and resources on subjects of critical importance. There are various benefits associated with limiting Strategic Priorities to 3 to 5.
Concentrate on intermediate term actions.
The Strategic Priorities serve as a bridge between long-term objectives, as expressed in a vision or mission statement, and annual or quarterly objectives.
Time is required to effect significant change or advancement. A decent rule of thumb is to identify 3 to 5 priorities that can be attained within 3 to 5 years.
Keep sights toward the future.
Strategy should demonstrate how a company will generate and encapsulate value in the future, as opposed to how it generated and captured value in the past.
Employees favor processes and behaviors that they are accustomed to and that produce predictable outcomes.
Strategic Prioritization guarantees that forward-looking initiatives important for future vitality and which will fail without sustained effort are prioritized.
Interested in learning more about Strategic Priorities and its 7 principles? You can download an editable PowerPoint on Strategic Priorities here on the Flevy documents marketplace.
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"Strategy without Tactics is the slowest route to victory. Tactics without Strategy is the noise before defeat." - Sun Tzu
For effective Strategy Development and Strategic Planning, we must master both Strategy and Tactics. Our frameworks cover all phases of Strategy, from Strategy Design and Formulation to Strategy Deployment and Execution; as well as all levels of Strategy, from Corporate Strategy to Business Strategy to "Tactical" Strategy. Many of these methodologies are authored by global strategy consulting firms and have been successfully implemented at their Fortune 100 client organizations.
These frameworks include Porter's Five Forces, BCG Growth-Share Matrix, Greiner's Growth Model, Capabilities-driven Strategy (CDS), Business Model Innovation (BMI), Value Chain Analysis (VCA), Endgame Niche Strategies, Value Patterns, Integrated Strategy Model for Value Creation, Scenario Planning, to name a few.
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