Conducting business in today’s global and economic environment requires a plan to support the mission, goal and objective of the organization through strategic development. These strategies are conceived with the collaboration of senior management and their staff in an effort to gain competitive advantages.
Achieving market share is not enough to prove an advantage over the competition. But it will increase bargaining power as well as the reputation of the organization.
Because strategy development is an unstructured, constantly changing and a highly interactive process, it is not unusual to have a setback if the following areas are not considered.
- Information Technology
- Product Development
These functional areas support the corporate goals but not necessarily the goals that would support each other. Cohesive development of departmental functions along with keeping pace with the growth of technology reinforces the adoption of change making it easier to develop the strategy. The highlight here is to expect change. Flexibility is a characteristic which will be admired and appreciated by all.
Approaching the development of a well-thought-out strategy does not have to be difficult. The key is choosing the appropriate approach that fits with the activities and resources that result result in alignment of the mission, goal and objective.
Here are four strategy approaches:
1. Overview Approach
This overview approach identifies several core strategic focuses. The specific points listed below should be used as a formal checklist.
- Vertical Integration
- Production Planning / Materials Control
Once this exercise is complete, the review of this data should be revisited quarterly. As stated earlier, change is inevitable. Points like capacity and workforce can be altered due to seasonality, increase of sales volume from promotions, and unexpected demand.
2. Trade-off Approach
The trade-off approach allows an organization to look at important variables while identifying the impact that may result from moving forward with a decision. This is the time to explore opportunities that may not be apparent or even seem possible. It is not always evident what the trade-off might be or even if there is one. Research through asking “what-if” to management and staff in the specific areas in question are recommended to accomplish this task. Keep in mind that trade-off does not always imply that there is a win/lose situation. Compromise is also an option.
3. Reductionist Approach
The reductionist approach identifies the root cause of problems. The key emphasis is managing underlying variables. The reductionist approach works on multiple trade-off variables for improvement. (For example: What if I reduce the workforce on second shift?) It is also about removing some of the variables to identify their value to make decisions.
4. Sequential Approach
The sequential approach looks at all of the multiple priorities that are competing with one another, one-at-a-time, rather than simultaneously. Each priority must be clearly established before looking at the next. Ranking each one on importance can take time and a lot of effort. This exercise is recommended via committee to prevent confusion and bias. Once each priority is clearly established, activities can begin to be reinforced to build upon a primary priority.
With these approaches, an organization can focus on operational transformation efforts, evaluate the impacts of activities, determine and clarify time dimensions, and begin integrating impactful decisions.