In the current turbulent economic climate, there may be a tendency to pay less attention to the strategy management process, but perhaps it’s now more important than ever.
In the past, the time horizons for strategy management have been fairly long term. Strategic plans have often focussed on achieving a vision or goals that are perhaps three to five years away. For commercial organizations, those goals would revolve around achieving growth and success in their market. The value of the strategy management process has been in aligning the organization with that strategic vision and driving execution towards it.
Given the current economic environment, not surprisingly, many organizations are putting long term strategic planning onto the back burner. Strategy planning is now much more near term. Often, strategic planning horizons have reduced to 12, 6 or perhaps even 3 months. In many industries, the key goals have shifted from growth to increased efficiencies, reduced costs and better value for customers. As economic events unfold, goals and targets are being refined, perhaps on a monthly basis. It’s just as important for the organization to execute against these shorter term strategies, as it previously was to execute against the longer term strategies.
The bottom line is that organizations are being more agile in their strategy formulation, so to close the loop they must be more agile in their strategy execution.
This tends to reinforce the need for a solid strategy management process. If strategy is changing, it’s important to have a good mechanism to communicate and explain those changes to everyone in the organization. Similarly, if goals and targets are frequently being refined, it’s important that these are also communicated clearly.
It is often argued that a fundamental goal of strategy management is to change behaviours within an organization – that is, encouraging people to change the way they work on a day-to-day basis, in order to achieve strategic goals. Those changes in behaviour are equally important for surviving the tough times, as well as thriving in the good times.