Every business, irrespective of its size and scale need concrete direction and well-chalked out plan to grow and sustain in this dynamic ecosystem. Strategy is that ‘well thought-out’ roadmap which outlines the overall vision, mission and provides direction to the organization. Organizations with robust strategies are more successful and perform better than others, whereas organizations with no concrete strategic plans struggle. A strategy, which is a long-term plan helps organizations reach the envisioned desired state. It involves intensive planning around organization’s goals and objectives, markets, products and services, competitors, customers, and revenue.
Strategy formulation is the most critical and intensive process which is mostly led by the founders and CEOs of the organization. A lot goes into formulating business strategies – from doing thorough market research to developing unique value proposition to creating an effective marketing plan. It is founder’s responsibility to come up with the most suitable and effective strategy to take their organizations to greater heights. Organizations that have founders/leaders who are committed to their strategies grow faster and are more profitable than their counterparts.
Unfortunately, business strategies do fail which in turn impact the overall functioning of the organization. There can be variety of reasons for strategy failure, like sudden economic downturn like recession or inflation or simply leader’s incompetence to execute strategy well. Research suggests that there aren’t enough leaders who invest time into strategy. The results of this lack of investment cascade down to leaders in the middle, leaders on the front line, and the workforce: studies point to the fact that majority of employees do not know or understand their organization’s strategy. It is not a good sign to ensure sustained success of the organization. What can founders do to build effective strategies and ensure its successful execution?
Let’s delve into some of the key considerations which should be taken by the founders to develop effective strategy:
- Have a clear vision: Vision talks about the future aspirations- the desired end-state. A clear vision will guide founders to move towards that end state.
- Self-assessment and competitor analysis: It is important to conduct a self-assessment to evaluate the best avenues for business growth and success. Identifying organization’s strengths, weaknesses, opportunities and threats will lend 360 degrees view of where your organization stands and what needs to be done to move ahead. At the same time, gathering complete information about your competitors will enrich your perspective.
- Set clear, long-term objectives: Prepare a strategic plan that is long-term and realistic. Ask -what is your competitive advantage and what type of products/services would you like to build? Who will be your target audience? What markets would you like to serve, and what operations would you like to undertake to get to your desired future state? At the same time, there has to be specific goals for business, functions/departments and also for employees.
- Alignment with organizational goals and values: Founders must ensure that the organizational strategy align well with other business goals to avoid any derailment in future.
- Measure your results: It’s not enough to simply set goals and forget about it, rather, periodically review and update your strategy and constantly monitor your progress.
Collaborative and holistic approach
Strategy building shouldn’t happen in siloed manner. Building successful strategies require a collaborative and holistic approach where founders should closely work with managers as well as employees to identify areas that need improvement and to develop strategies to address these issues. When founders do not want to change their mindset, are reluctant to share their power and do not involve managers and employees while building strategies, organizations struggle.
What founders can do?
- Create open lines of communication: Founders need to encourage managers to share their thoughts and ideas about the company strategy. This can be done through regular check-ins, brainstorming sessions and team meetings. Managers often have a more detailed understanding of the day-to-day operations of the organization and can provide valuable insights and perspectives that founders may not have considered.
- Solicit Manager’s feedback: It is important to actively seek out feedback from managers on proposed strategies and initiatives. This will not only help founders to identify potential issues or challenges but will also foster a sense of collaboration and camaraderie.
- Soliciting employees’ feedback: Taking employees’ view is crucial for the success of any company. Managers who regularly listen to their employees can provide valuable insights into the strengths and weaknesses of the organization, and this information can be used to shape organization’s strategy.
- Ensuring alignment: Founders should ensure that their managers are aligned with the company’s overall mission and vision, values and that they understand how their specific roles contribute to the achievement of these goals. This can help to ensure that everyone is working towards a common purpose and that the strategy is implemented effectively
- Presenting the bigger picture: It is often seen that managers and employees are so focused towards their department that they miss out seeing the macro view of their organization. But when founders involve them in strategy building exercise, they become aware of their organization and its long-term plan. By involving everyone in the process, the company can create a sense of ownership and commitment to the strategy, which can increase the likelihood of its success.
It is observed that people believe in what they see and feel however, the reality might be totally different. While building strategy, founders may place more importance on things they see and feel is right whereas for managers and employees, the other set of things carry more importance.
This very fact reminds of a buddhist parable ‘The Blind Men and The Elephant’ which is a metaphorical tale that illustrates the concept of subjective truth and the limitations of individual perception. In the story, a group of blind men come across an elephant, and each one touches a different part of the animal. One man touches the elephant’s ear and concludes that it’s like a fan while other man touches its trunk and believes that it’s a snake. A third man feels its side and declares that it’s like a wall. Each man has a different perception of the elephant based on their limited experience and perspective. Each man believes that his individual perspective is the whole truth—when it’s actually only partial truth. The story puts forth the fact that no one person has a complete understanding of a situation. Therefore, we must acknowledge and consider multiple perspectives to gain a deeper understanding of the truth.
However, it is important to understand that ultimately, founders are responsible for setting the direction and vision of the company. While inputs from managers are valuable, founders must be able to filter this information and make decisions that align with the overall goals and values of the business.
To summarize it, it is critical to have strong strategy in place. Founders need to maintain a clear vision and make decisions that align with the overall goals and values of the organization. Open communication, soliciting feedback, and taking a holistic approach will ensure effective strategy formulation. A well-rounded strategy should be developed by a range of inputs, well aligned with organization’s broader vision and goals