There is strong consensus that a strategy is a necessary part of any organization’s future success. After all, without strategy, how will your company navigate the tidal wave of digital disruption? In theory, all organizations would devote thousands of man hours to the development and continual reassessment of corporate strategy. But with the ever-increasing push to keep companies lean and productive, devoting additional man hours to strategy is unrealistic. What is more, the people who would be most capable of making important strategic decisions are often those with the longest to-do list. While it is clear that leaders need to be able to make strategic decisions on their feet, too often, an organization’s strategy consists almost entirely of responses to external triggers. Business leaders need to take the time to analyze the extant situation in order to create deliberate strategic decisions. In an article for the HBR, Freek Vermeulen compiled a list of important questions strategic decision makers should consider. For those in charge of strategic decision making, carve out a couple hours to reflect on the following questions:
- Is the sum greater than the parts? Every organization encounters initiatives that seem attractive at the start. But the question that strategic leaders need to keep asking is whether the combination of initiatives make sense together. Will the sum of all the organizational initiatives combine to form something greater than its individual components? If not, the components need to be re-assessed.
- What would an outsider do? Most companies develop some measure of limiting beliefs. Organization Theory calls this “escalation of commitment,” wherein people are inclined to continue holding on to beliefs that were once pertinent and made the company successful, but no longer make sense in the current situation. For this reason, it is extremely useful to consider strategic decisions from the perspective of an outsider.
- Is the organization consistent with the declared strategy? It happens frequently that organizations declare their ideal aspirations on paper, but fail to implement the necessary organizational architecture to achieve the desired strategy. Alignment of strategy with business operations is more than just declaring a strategy—it means considering how that strategy can be executed from beginning to end.
- Why are things done this way? Simply asking why about any number of processes often elicits the response, “Because we’ve always done it that way” or “everyone does it this way.” Whether or not this is true, it is not a statement that inspires confidence. Is the way everyone does it really the best way to do something? Simply asking why about business processes can help eliminate wasteful habits and inspire innovation.
- What are the long-term consequences? One final question to consider is the long-term implications of your strategic decisions. Considering the short-term effects of a choice is considerably easier, since the results are salient. It is easy to skip the follow up on a good long-term strategic decision because it didn’t deliver results on the short term. While it isn’t practical to try to measure the long-term value of a given iniative due to the extreme number of conflating variables, it is sensible to sit down and reflect about the consequences of your strategic actions. After all, strategy is all about making uncertain decisions that have long-term consequences. Separate yourself from the pack by stopping to think about the impact your strategy will have down the road.
Do you feel that you never have time to fully think through your organization's strategy? Do you think sitting still carries a stigma?