This year’s Annual Conference for Strategic Management took place on Thursday, May 16, 2013, in Stuttgart. Again, SOLYP Informatik GmbH was proud to be one of the event partners. Among the speakers, we were able to welcome two of our customers: Immonet GmbH and JOB AG.
Under the motto "Between Analysis and Intuition – How Successful Companies Align their Strategy Work," the speakers shared their theoretical knowledge and practical experience in keeping a balance between intuitive strategy work and formalized strategic planning processes.
Without such a balance successful strategy work is almost doomed to fail, said also Dr. Michael Giebel, Head of Strategy, Organization, & Quality Management at JOB AG. Before the implementation of the strategic planning software SOLYP3, JOB AG exclusively relied on intuition in its strategy work which, as he admits, did not yield the desired results. With the support of SOLYP3, a proper strategic planning process, including a comprehensive strategic analysis, was finally put in place. JOB AG now follows a top-down-/bottom-up approach to strategic planning: While the strategy process, guiding principles, mission, and goals are set top-down by the management, the individual strategies of the branches are aggregated and consolidated bottom-up into division strategies which then are consolidated into a coherent overall corporate strategy.
The Immonet GmbH also relies on the top-down-/bottom-up approach, however giving somewhat more freedom to the mid and lower management as the C-Level only defines a general target corridor. Another challenge, explained Christian Maar, CEO of Immonet, is the tightrope that companies have to walk in fast-paced digital markets: While a long-term strategy has to be pursued, parallel efforts need to be made to adapt to changes in the marketplace as quickly as possible. This requires a great deal of organizational flexibility and agility as well as willingness to take risks.
Next came Andreas Rau, Head of Strategy at PHOENIX CONTACT GmbH & Co. KG. He shared with the audience how POENIX developed from a medium-sized company to a global player with more than 12,000 employees and a turnover of 1.5 billion Euros. Starting point was the 7k Model of Horváth & Partners which provides a framework for analyzing and assessing all aspects of the business model and uncovering strategic contradictions. As a result of this analysis, new strategic goals and measures were developed. Strategies were then tested for consistency and plausibility using scenario techniques. Rau also stressed the importance of measuring soft data by quoting the old saying: “What doesn´t get measured, doesn´t get done!”
Tim Wolf, Head of Strategic Management & Business Strategy at Horváth & Partners, reviewed the status quo of strategy work and took a look into its future. Among other things, he predicted that wargaming will gain popularity in the near future as it helps to overcome some of the short-comings of traditional strategy processes. Adapted from the military, business wargaming is a role-playing simulation of a dynamic business situation. The idea is to develop more robust strategies by looking at a particular situation through the eyes of the different competitors and stakeholders. In addition, wargaming is a great tool for communicating strategies to employees and motivating them to implement them.
Finally, Professor Dr. Dirk Ulrich Gilbert, University of Hamburg, stressed once more that analytics and intuition are equally important when making strategic decisions. Intuition can be very helpful in complex, uncertain, or urgent situations as well as for developing truly innovative products and services. However, there are also dangers associated with using intuition in decision-making, such as mistaking intuition with wishful thinking or neglecting evidence that clearly speaks against intuition. What’s needed in strategic planning is a flexible organizational framework that ensures that all relevant information for making a decision gets to be considered adequately while giving managers enough room to listen to their inner voices. That, however, is easier said than done, admitted Prof. Gilbert.
Nevertheless, the Annual Conference for Strategic Management has shown that many of the companies that deal intensively with their strategic planning processes eventually succeed in striking this balance!