Tuesday, 5 August 2008

How to make a compelling corporate strategy in six easy steps

What is the “strategy process” that I observe in most corporations?

Step 1: On the 15th of October (or whatever month), we send a memo to our business unit managing directors that we will need their unit’s strategy input by the 1st of December, including an explicit elaboration of how it fits in with the corporation’s overall strategy.

Step 2: BU’s management thinks, “What was the corporate strategy again?” and looks up last year’s document.

Step 3: It takes note of what its business unit’s input needs to be – in terms of the guidelines provided by corporate – and, after a week or so, assigns some junior staff members, consultants or interns to provide the numbers about the market, forecasts, benchmarking (in terms of what competitors are doing) and so on. They give them last year’s document and also send round an e-mail to all team leaders urging them to diligently provide the necessary data (“because it is that time of year again” and corporate wants it by the 1st of December).

Step 4: After two weeks, BU management thinks, “Wonder how that is going?” and finds out that the team leaders have not been very quick to provide the necessary information. After another e-mail (marked “urgent”), information starts flowing in and by mid-November there is a big pile of data. In the subsequent two weeks (while flipping through last year’s documents a bit), they write a number of pages about what the unit has been doing over the past year (which corresponds remarkably well with what they said last year they would be doing), what they will be doing next year and how it is all contributing to (yes, even driven by!) the overall corporate strategy. On the 1st of December, we note from our e-mail inbox that we received their document last night on the 30th of November (just in time!), at 11:37pm, which makes us realise, with a slight feeling of guilt, that we had just gone to bed at that time (after finishing that rather good bottle of Australian Shiraz).

Step 5: The next day, we flip through the various units’ strategy documents and put them aside. Some time during the first week of January, we flip through them again and take last year’s corporate strategy document out of the drawer. We then think about all the activities the corporation is engaged in and – usually with the aid of our strategy department or, in the blissful absence of such a group, a consultant or two (they usually hunt in packs) – we come up with some overarching logic (and a quite compelling one, we proudly congratulate ourselves) of why we are doing the various things we’re doing anyway.

Step 6: On the 1st of February, we send the document to all company directors and business unit managing directors. They look at its shiny cover (with a picture of us standing in front of our new corporate building – we first objected against having our own picture on the cover, but PR convinced us it would give it a more personal touch), read the first page (checking the acknowledgements for their name), briefly flip through some of the other chapters, and put it in a drawer.

Where it remains until the 15th of October, when we remind them “it is this time of year again”.

1 comment:

Xian said...

Having just been through the same exercise in retail merchandising, I can't stress how true this is; it really feels like deja vu (we do it every quarter). The same document having varies "tweaks" to it, meeting most of the forecasted picture.