Outsourcing and brand and infrastructure merging are making way for the next generation – down-to-earth innovation, smart and monitored. The process of strategic planning has to be tailored to this trend, so look beyond the boundaries and start thinking!
Raised company value is the major challenge that CEOs and top managers are facing. In the past the strategic focus was on the innovation and product development companies. In the year 2000, the market flop and the onslaught of recession reversed the trend, and the focus was shifted to enhancement and cost reduction. These have been mainly achieved through outsourcing, infrastructure and brand merging in Israel and worldwide. Today these processes have been almost fully utilized, parallel to the M & A process, and the next generation of “smart growth” is about to emerge, which will bring the focus back to innovative thinking. Contrary to the past, this innovation will be accompanied by the careful monitoring and optimal leveraging of the existing resources.
The change in the trend and the new focus require changes in the characteristics of the strategic process. In order to create value for an organization, the process of strategic planning has to be original and creative and involve the organization’s influential roles, as well as to be continuously examined and applicable.
Creative Workforce Is Needed
In order to lead successful innovation, the companies have to look beyond the boundaries and to examine the business landscape through multi-focal lenses, which will assist them in creating innovative products and business models different from those used today. This fact smartbudsorganicshop compels organizations to change their HR placement methods and to give preference to creative employees.
The strategic process is undergoing additional changes. Research has revealed lack of involvement of managerial roles in strategic processes. From our experience, in order to create value for the company, the process requires the involvement of all ranks across the organization, and not only the managers, since distances have to be avoided between those who are planning the strategy and those who are going to implement it.
This conclusion derives from research, which has proved that lack of cooperation and commitment to the process of strategic planning and their poor communication across the organization are the major factors that are responsible for strategic failures. The new process allows for greater involvement and it includes cultural transformation that leads the organizations towards creating cross-organizational commitment to it.
Another change in the strategic process is expressed through the frequency and term of planning related to it. The trend of today is ongoing strategic renewal. If in the past strategic programs were made for a period of five or even more years, today’s planning term is getting down to three years only. It is obvious that the issue is dependent on sector characteristics, for example, the planning term differences in the pharmaceutical and textile industries.
The trend also relates to a shorter transition from strategic mapping to implementation. In today’s hypercompetitive world, organizational agility and flexibility are key factors of success. An opportunity outlet that opens for a company may rapidly close, and the time given to managers runs out quickly. Therefore, a strategy has to be continuously agile before market conditions change and it becomes irrelevant. Moreover, it has to lead to Quick Wins shortly, along with aiming at long-term goals.
As part of ongoing strategic renewal, companies will have to continuously reassess their strategy versus market dynamics. The time that is available for a company to reveal if it has steered off its course and to get back to it is getting shorter. In view of that, the strategy has to be continuously assessed, and the integrated mechanisms of opportunity tracking and market changes are to be developed.
In order to enable the strategic planning to lead to effective and rapid implementation we have to make drastic changes in the process itself by adding the aspect of being executable – “Executable Strategy”. If in the past the process was viewed as having two separate parts: planning and implementation, currently it is seen as continuous and integrative. A successful strategy has to be formulated with regards to its implementation, and vice versa, implementation has to bring additional questions that derive from the actual execution of the strategy to the discussions table.
An example from the business world might be the trend that has evolved in recent years and refers to the consumer needs outside the household- coffee shops, fast food eateries, hotels, etc. While in the 70s 20 cents of each dollar were spent on consumer needs outside the household, today the figure stands at above 50 cents. This trend has completely altered the competition, and consequently, the business strategy of companies. Companies have to examine the implications of strategy execution well in advance for the best planning of the strategy, for example, the volume of investments or how to manage the supply chain, etc. Operational analysis provides feedback for strategic dilemmas, such as product portfolio and customer segmentation (if to focus on a certain customer segment, for example).
The connection between strategic planning and implementation, and vice versa, is crucial for raising company value. Research has revealed that the shares of those companies that have successfully executed their strategies, which has led to raised company value, have risen or” bottom line” performance has improved. According to the research done by some analysts, more than 35% of buyer recommendations are based on aspects other than financial, the ability of the company to execute the formulated strategy being central to them.
Strategic planning is turning into an essential norm. The market of strategic consulting has been growing steadily and is projected to grow even more in the future. The strategic process assists companies in mapping their internal and competitive landscapes and to provide answers to such questions as “in what direction is the market going?” What are our customer needs? What are our organization’s core capacities? Which of the capabilities or assets are not being utilized and can be leveraged for creating company value? The answers to the above questions will lead to defining growth drivers within an organization. Undoubtedly, were are on the threshold of “smart growth” witnessing how the strategic focus is once again shifting to innovation, but, contrary to the innovation of the late 90s, this one is smart, traceable, and “down-to-earth”. It spawns from the core capacity of the organization and is based on leveraging the existing resources.