Developing a Strategic System
Mostly due to its start-up origin and to management profile, companies develop intense focus on executing, tactical orientation.
In terms of future developments, those companies get very good at producing incremental innovation, around the main product and from clients’ demands.
Eventually, the company will reach a tipping point. The start-up has grown, is part of a global organization and has an impressive structure, market share and client base. It can no longer function with the mindset of a start-up (small, frenetic, tactical) nor it may accommodate in the market leader position.
Although serving the clients is the final purpose of any business, too high flexibility to accommodate clients’ needs and to follow with the fast-forward market without a clear established and well-communicated strategy behind it is leading to:
- Constant pressure over the team –“fire drill” environment
- Accumulation of customizations.
Clearly, there is a strategic view of the market and the business on the top management level. However, this seems to be overwhelming these executives with decisions that cannot be taken by mid/lower management levels due to a lack of senior understanding of the direction of the company. Additionally, this leads to a feeling, amongst the rest of the team, that management decisions seem quite arbitrary.
There are great ideas, but not that much planning to follow with them and to give them space to grow amid the daily routine. Also, management thinks it would be helpful having more numbers/KPIs to guide decisions. Nevertheless, people seem willing to dedicate to the development of the company, now and in the future.
Top management recognizes the need of implementing more strategic oriented mindset and processes as keys to taking the next step into the maturing of the company and its operational model. Also, having more strategic discipline would be crucial to innovation and competing in the future.
The Strategic System
Developing a strategic system goes beyond the development of a strategic plan document.
The starting point is the definition of the mission and vision statements. This is not simply a rhetoric matter; instead, they are a clear and dynamic declaration of what the company does and where it is aiming. They are supposed to provide a common place of understanding for all levels within the organization.
The mission and the vision statements also provide a frame for the two following parts of the strategic system:
- Market intelligence: establishing an organized process of collecting, analyzing and distributing relevant data and intelligence on the markets that are comprised into the mission and the vision statements. It considers market as being composed by competitors, clients, suppliers, partners and all the forces shaping the business environment (social, demographics, economy, legal, trends etc.).
- Internal resources, process and projects: providing a clear overview of what the company has and what needs to be developed.
The next part of the system is developing the strategic discipline, by including the strategic thinking in the routine of the business. This includes:
- Producing a strategic plan document for the company (annually updated). The strategic plan is a guide for decision, allowing a better distribution of responsibilities across different levels. It is a powerful communication tool, putting all the team on the same page. It also helps aligning with other parts (Experian Marketing Services, GPTS, Experian corporate).
- Drilling-down this document into strategic plans for relevant business areas and functions
- Drilling-down the plans into strategic maps, defining in a more granular form: (i) what value the company is delivering to the stakeholders; (ii) what is the go-to-market strategy; (iii) how does the company want to be perceived in the market; (iv) which processes and projects need to be developed and (v) which resources and assets are supporting all this.
- Finally, the map is drilled-down into weekly/monthly KPIs.
That is the point in which planning meets execution. By the dissemination of the plan to the KPI level, and establishing an agenda of annual/monthly/weekly meetings, involving different levels of the company, the plan is constantly revised and adjusted, in accordance to the reality of the business and the market. Better planning leads to better execution.
Inserting the Strategic Mindset into a Company’s Culture
To implement a strategic system, with its proper discipline, usually requires an important cultural change management process. It is not a matter of templates and software; rather, it is an evolution of the way things are made within the organization.
For in-depth cultural change to happen, one has to understand how organizational culture functions.
Or, in other words: Culture is what people do when the leader leaves the room!
So, it is the rooted beliefs and values that lead to attitudes and behaviors. Every company (and every employee) has its own operating values, which may be positive or potentially limiting. In a company in which the “too tactic” way of doing things seems to be reaching a no-productive level, “being more strategic oriented” would be an aspirational value, one that needs to be developed.
To embed desired values in an organizational culture is a twofold effort:
- Declaring values: explicitly stating this value (strategic mindset, for instance) is something the company believes in; supported by leadership role model and clear communication.
- Creating and aligning artifacts to those values by establishing practices that reinforce them and discontinuing practices that go against them. Artifacts are rituals, heroes, symbols that make the value tangible to the team.
If only value declaration is developed, it will not echo around the company, because all of the other signs are going to still reinforce the previous values.
On the other hand, simply delivering artifacts will cause a passing behavioral change, since it is not deeply rooted.
One last important point about culture: it is not a top-down definition. The best way to operate new values in an organization is to allow intense participation of the team into the choosing process. So, when the artifacts are developed, people will be more inclined to react to them positively.
image credit: 123insured.com
Maria Paula Oliveira is the Manager of Corporate Innovation at Serasa Experian and Experian Latin America, a major credit and marketing information corporation. Her core expertise includes innovation management, market analysis, trends identification, business development, negotiation, strategic planning, competitive intelligence and marketing. Maria Paula is both an American and Brazilian citizen.