We have seen over the last few months that many well-known businesses have been conducting strategic reviews. Tesco (including a new CEO who interrupted his holidays), Marks and Spencer and Mothercare come to mind. There are many more. We constantly emphasise to our clients that they should constantly conduct out strategic fitness tests. Very often, when this is done against a backdrop of falling revenues and profits and market share loss, it is probably already too late.
Strategy matters! Far too often Boards neglect those discussions because the Board agenda is already full of other important items. We therefore constantly question our clients on how much time the Board is spending on real strategic issues. Are the real difficult questions being asked?
This is not intended to be an exhaustive check list, but rather to give you some food for thought.
Try the following themes for discussion:
- What have we learnt about the market and competitors during the last few months?
- What is the craziest thing that our competitor(s)could do?
- What if we lost our biggest client?
- Our customers buy from us because…… (complete the sentence)
- What will we look like five years from now?
- Who could potential new competitors be?
- How do we create shareholder value?
- How do we create value for our customers?
- We fully understand our source of competitive advantage (and our competitors’)
- We are very happy about the process that we go through to create strategy and chose strategic options
And a few misconceptions:
- Cost cutting is not a strategy.
- Structure (or restructure) is driven by the strategy. A restructure itself is not a strategy
- Corporate strategy drives functional strategies, not the other way around
- A statement like “I want us to be number one!” is not a strategy but a potential result of a chosen
- The Board, no matter how intelligent and hardworking, does not have all the answers.
- Preparation of a business/plan is secondary to strategic choices
- Monopolies and dominant market share can evaporate
- And hope is also not a strategy!
Feel like doing something different?
This is based on solid experience and contains well over 100 questions exploring all aspects of strategic planning. It is in essence the full medical check-up as opposed to the quick visit to the doctor. What can also be useful is to get the Board to complete and compare the findings against the findings of management and/or other stakeholders. What have you got to lose?
More from Vistage: