Craft a strategy for a new era (Part 2)
What is the strategy in your strategic plan? In this part 2, we continue to explore the weaknesses of using the traditional approach;
d)Easy to be predicted by the competitors
The traditional approach does not offer a unique strategy. The result is a strategy and a plan that can easily be predicted or guessed by the competitor. The same challenge happens when the Balance score card performance measurement tool is used in developing a strategy. The competitor can easily predict the strategy because;
i.The Vision, Mission, Values and goals are usually available publicly via the website or annual reports. These drive the strategy in traditional speak. So you plan within these perspectives.
ii.It is easy for the outsider to guess the goals and objectives, internal analysis i.e whether the organization has the money, machinery, markets, man power, materials and makeup in which case it is said to have strengths. And if not, these are its weakness. Likewise, an outsider can easily assess whether your organization environment is in favorite Political, economic, or social factors – are they in favor of the business or not?
If your company supported a political party that failed to win the elections, obviously the political environment is not in its favor. That is therefore a threat.
A great competitor invests in intelligence to understand the players and how they fair. Using the traditional approach therefore leaves you exposed. The competitor could guess strategy by 70% of time. The information is readily available on the website.
e) Keeps the Company in the ‘Red ocean’
In the Blue Ocean, Red Ocean strategy, Kim etal explains that when companies offer the same products, to the same target market and compete on the same factors – they fight each other directly which leads to spilling of blood thereby turning blue ocean waters red.
To succeed, they add, you need to play in uncongested market space. By offering new products and competing on new factors so that you play in your own space. That is a blue ocean.
The traditional approach to strategy does not help you formulate a winning strategy. Just open a copy of your strategic plan document and see if there is a strategy in the first place. You are likely to only find top areas of focus and these are usually not well linked to the strategy! They have everything to do with execution. But how do you grow the business without a clear strategy? If you find you have no resources to execute your strategy, it is a red flag that your planning was poor.
f) Lags behind technology
The traditional approach assumes that it is possible to predict the future. The approach aims at perfection and ignores the fact that you cannot predict the future especially customer behaviour, technological changes and new competition.
The fact is strategy is about increasing your odds of success but not guaranteeing it. You need to be scientific and very innovative so as to explore the potential impact of external factors on your strategy.
The way you don’t have to be reactive to technological changes, a dilemma traditional planning exposes us to.