Key Steps to Building a Good Strategy
~ Harsh Mariwala (Chairman Marico Ltd., Founder ASCENT Foundation)
Strategy is exciting and execution is boring. However, both are required for success. Both are interdependent and not possible without each other.
• Strategy is based on your vision/mission – what is it that you want to achieve? E.g. I want to be a market leader in my segment.
• Strategy should be done once in a year – ideally in December/January so that it can be aligned to your budgets in March/April.
• Strategy must be reassessed and reviewed every three years. Simply because the environment changes too fast and is volatile and unpredictable. (Earlier, it used to be 5-10 years)
• Realign strategy if something comes up after 3- 4 months of freezing your strategy.
Don’t be rigid – Be fluid. You are not a public agency.
• If you have options to adopt multiple strategies, ask yourself – will I be a market leader? Do I have the ‘right-to-win’? Take up the option only if your answer is yes.
• Your strategy document must also have what you must NOT do. E.g. you may decide not to venture in a particular segment.
• While reviewing strategy, you must ensure that at least the basic targets have been met.
• Start strategising with a no-constraint policy then figure out the best possible situations. You should not have any manpower or financial constraint. If the strategy is good, you will get people and funding. However, if the risks are high, you should tone down a bit.
Strategy is executed at the grass root level as well, not just the senior management
• Every organisation must ask itself – What can go wrong? This can be done at not only organisational level, but at the personal level too.
• Every organisation should do a SWOT test. The strategy must be based on leveraging your strengths and nullifying your weaknesses. How can you encounter your threats through a good risk management system? Also, how you can convert your strengths into a new opportunity?
• Competitive framework is a critical part of strategy. You must know your competition well. Visualise the different scenarios over a 3-5-year period; any disruptors/ competition. You must think – going forward, what can be the likely scenario. Gather all the information on your competitors. Interact with the stakeholders; study their products/ offerings; participate in industry events – not only at a local, but global level as well.
• Environmental analysis is the first step for creating a strategy –
Identify certain thought leaders in your sector. Capture trends of the market; consumer behavior; new government policies; political upheavals; manpower shortage in your sector; global crashes; potential disruptors etc. must all be tracked. For this, you can even hire external consultants to get more objective and diverse views.
• There can be a potential risk attached to sharing the strategy with your colleagues. However, the way to do it is to ensure that it is disseminated in the right groups accordingly. E.g. you may share your detailed strategy with the senior management and an overall direction with all your employees.
• For strategy, financial modeling should depend on your business. Overall it should be directional. And it can be reassessed and realigned every year. Only if there is a big capital expenditure involved, you may need to deep dive. Else, the nitty-gritties should be ignored.
• Manpower will always be an issue – in real life and retention is always a challenge. If the attrition levels are higher, then you must hire to compensate, in advance. However, key talent must be retained.
Balance is the key
Leaders already spend a lot of time and energy making a solid left-brained case for their strategy, as they should. However, without a corresponding effort to engage emotionally and a culture that supports that effort, the spirit of change will quickly fade from the scene. To execute a strategy successfully, you need a good plan and an even better culture.