Need help developing an effective Corporate Strategy? Contact Coach Mark Layton @ marklayton@sbcglobal.net
As a leader of your organization, do you ever find yourself wondering why your team seems to not be on the same page or has just kind of lost its way? Have you ever experienced any of these quite common corporate phenomena’s within your corporate team?
- New products, geographies or channels are developed and launched but they don’t ever seem to achieve their predicted potential or they don’t address market demands as your team sees it?
- Modifications to incentive compensation programs are announced but they don’t incent the actions necessary to achieve the company’s goals as you understand them?
- Annual financial goals and/or spending constraints are communicated that are in direct contrast to growth plans that your department set out for the year?
Over the past 30+ years I have worked with countless numbers of leadership teams from corporations, local to global, small to large, public and private I’ve seen over and over again how the lack of an effective Corporate Strategy results in a myriad of departmental team and individual actions along with compensation plans that are misaligned and inconsistent that effectively render the well-intentioned Corporate Strategy into a journey of Hopeful Discovery.
From these experiences I have found six (6) key characteristics that are present in a majority of companies who have highly effective Corporate Strategies. In your next leadership team meeting, plan some agenda time to ask your team about the effectiveness of your Corporate Strategy using these 6 key characteristic questions as discussion guidelines.
- Does your Strategy allow for clear and tangible action plans to be built from it that in-turn support the measurable outcome?
Effective strategies have a clearly stated objective with measurable outcomes. Too often I see strategy statements get mired in words about corporate mission, purpose and/or values, which in their own merit have value, but are not strategies. For example, “To delight our customer..” in itself is not effective strategy. Effective strategy statements are short and concise (try 27 words or less) and they should address who is the targeted market or customer, what you want to provide that target, why that product or service will be of value to them, what will competitively differentiate your firm in that offer and a measurement of success.
- Does your Strategy align with the core competencies and competitive strengths of your firm?
Often I see companies whose leadership teams either cannot list their core competencies or even worse can’t agree on them. For example, I see company’s list “manufacturing capability” as a core competency. So am I to assume that the company has competency to manufacture everything from corrugated boxes to performance automobiles? Of course not, but without greater clarity or definition, your audience for your strategy is left to fill in the blanks and the outcome is often not what was intended. Spend time with your leadership team to clearly define and gain consensus around your firm’s strengths and weaknesses and then as you craft your strategy be sure that you are defining a strategy that accentuates your strengths and avoids exploitation of your weaknesses.
- Does your Strategy embrace the likelihood that unknown or out of control factors will attempt to derail it?
Strengths, Weaknesses, Opportunities and Threats (SWOT) must be equally evaluated as an effective strategy is developed. Ignoring threats in your strategy can be disastrous or even fatal to your firm’s future viability. Take for example the emergence of daily fantasy sports sites over the past two years. These firms strategies almost arrogantly ignored the potential that their business might be labeled as online gaming sites and thus illegal in the USA. Effective strategy embraces potential threats and be they competitive, legal or governmental. Often one short phrase such as “working in harmony with legislators” will signal to your organization the need to develop action plans that embrace the need to diminish the threat or to develop contingencies around them.
- Does your Strategy has strong consensus support and buy-in from the organization?
Likely the most common missing element that I see in corporate strategies has nothing to do with the words on the paper and everything to do with the lack buy-in and consensus surrounding the strategy. Critical in building an effective corporate strategy is the process under which the strategy is developed. Take two strategies that are exactly the same and which both meet all of the other criteria of an effective strategy outlined herein, One was developed by the CEO and 5 or 6 VP’s on a weekend retreat and the other was a product of a visioning conference where a larger cross-section of mid to upper level leaders (say 20 to 40 people) came together for one to several work days and were structurally led through a process to develop the strategy. Ask yourself which process do you think creates the greatest ownership and accountability to the strategy? Clearly that is gained when a larger cross section of people gather in a structured fashion where broad participation and contribution is driven. This participation creates consensus and accountability to the outcome that is invaluable in an effective corporate strategy.
- Does your Strategy outcome outline clear measurements in terms of both time and numerical metrics?
The late great Peter Drucker was oft quoted that “You can’t manage what you can’t measure” and that applies to Corporate Strategy as well. Drucker, in his book Management: Tasks, Responsibilities, Practices writes; “Work implies not only that somebody is supposed to do the job, but also accountability, a deadline and, finally, the measurement of results —that is, feedback from results on the work and on the planning process itself…” . Strategies without timelines and measurability leave the audience again to fill in the missing elements themselves. In contrast, for example, Strategies that outline “a 5-7% annual gain in domestic market share” or “15-20% annual revenue growth with steady gross margins” provide the foundation for the development of individual department action plans and incentive compensation that are directly aligned to the strategy. Absent time and measurement, you simply cannot have an effective strategy.
- Does your Strategy have “legs” or does it get frequently reinvented or redefined?
Recently I sat in an executive meeting where the company’s founder and CEO discussed his desire to have quarterly strategy themes for the company and was imploring the management team to come up with some great new strategic ideas. All I could think was …whoa you must be kidding me? Effective corporate strategy provides a road map for a journey to a desired outcome that is meaningful and impactful within a determined time frame. Typically this time frame, in business, is 3 to 5 years or more. Now before you comment me to death on this, I am quick to admit that there are solid reasons for a short-term strategy, for example when crisis strikes or when serious restructuring is required, or from startups using a “fail fast” development strategy, but these are generally very specific and isolated instances. My message is that Effective Strategies are not this month’s public service campaign and your team can’t be effective when the strategy is forever changing. Annual modest adjustments to an effective strategy are typically appropriate.
Need help developing an effective Corporate Strategy? Contact Coach Mark Layton @ marklayton@sbcglobal.net
About the author: Mark C. Layton is a highly experienced and successful serial entrepreneur, board member, author, facilitator, speaker, instructor, corporate and athletic coach and mentor and has been awarded numerous industry awards and recognition over his highly successful business career. www.marklayton.com
Mark C. Layton 