Thursday, February 24, 2011

What is Your Strategy Doing for You?

Around half the executives believed that their strategies simply were directed at matching industry best practices & delivering operational imperatives – that is the finding from a McKinsey survey conducted online in November 2010.
Matching industry best practices is not quite the realm of strategy – since the most it can do for you is to bring you at par with what the industry is already doing or what is generally an expected capability in the industry. That does not create any competitive advantages nor does it guarantee long-term survival/growth and it definitely does position any company for a long-term leadership position.
imageThe second aspect of delivering operational imperatives is even more immediate from the focus point of view and can hardly be seen as strategy. With the increasing advent of computerized systems and automated processes, operational excellence also has become more of “must have” capability to compete rather than a capability to provide any distinct competitive advantage. 
Part of the reasons behind such short-term focus on business has to be the recent recession which had everyone focused on short-term survival, but another part could very well be the Wall Street culture of focusing on the next quarter! On the other hand, however, just over half of the executives (53%) did emphasize that their strategies were based on creating advantages over their competition – which is the core domain of strategic planning in business. That is good news for these companies since these will be the leading corporations of tomorrow.

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© Vivek Sehgal, 2011, All Rights Reserved.

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