Success Factors of Strategic Planning – Expert Check, Part 5

Tuesday, 21. July 2015

Avoiding the Comfort Trap: How a Structured Strategy Process Increases the Maturity Level of Your Organization

Digitization has taken control over our lives. It already starts with our children: they order pizza over the internet, do their homework online, and chat with their friends via social media rather than the telephone.

However, today I neither want to sing praises on digitization nor do I intend to highlight the advantages of an IT-based strategy process, rather I would like to go back one step and draw attention to the strategy development process. The reason: many of the senior managers of corporations and medium-sized companies I talk to say when looking at their strategy processes that the process maturity is in need of optimization. Sometimes strategic decision-making processes are not transparent enough; sometimes well-tried paths are adopted without proper consideration of all strategically relevant data.

In my 5th blogpost on strategic planning success factors, I would like to examine how an efficient "challenging" of the existing strategy process can help to structure it, make it more efficient, and thereby sharpen it. This not only increases the robustness, speed, and forecasting capabilities of your strategy, but also raises the maturity level of your entire organization.

Avoiding the Traps of the Past

Negatively speaking: managing a successful strategy development process is all about avoiding mistakes and pitfalls. These have a common origin – the past that was supposedly not that bad... However, strategy work means to shape the future. Recipes from the past are rarely suitable for that, especially in today's highly dynamic markets.

To manage a successful strategy development process, we need to close the traditional toolbox and leave the comfort zone of retrospective analysis. Therefore, I explicitly agree with the statement of Dr. Andreas Jerschensky, Head of Corporate Development/M&A of ALTANA AG:

"A key success factor for strategy development is the clear analysis of the real challenges a company is facing and that need to be addressed by the strategy. Another factor is to identify effective measures and new paths without falling into the ‘comfort trap’ of easier and/or acceptable solutions that do not or only insufficiently solve the actual challenge. Both factors can only be achieved with a structured and consistent strategy development process."

Structure and consistency are the key features of a strategy process that yields clear analyses and opens up new paths to go, according to Jerschensky. They are indicators of process maturity. Vague structure and a lack of consistency make a process prone to errors, and, therefore, unfit for developing strategic options for the future.

Thomas Herrlinger, Head of Strategic Business Development & IR of Schuler Group, also calls for structure and consistency in order to increase the "strategy output." In addition, he points out:

"Through an IT-based strategy process, we pursue two main objectives: To increase the quality of the output thanks to efficient planning tools and to speed up strategy development, evaluation, and implementation. We consider the timely and targeted selection of strategic measures as a decisive success factor."

Speed and focus on strategic goals are two other factors Herrlinger mentions; also the "timely and targeted selection," as it puts the entrepreneurial will of the management in concrete terms. Here, the strategy process turns into a leadership process. A strategy developed with lack of structure, consistency, speed, and focus will result in an equally shapeless leadership process. It will fail when it comes to making the company fit for the future. In short, the maturity level of the strategy process is representative of the maturity level of the entire company!

My point is: The maturity level of the strategy process can be quickly improved using known methods and concepts. In our work, the analysis of the existing strategy process is essential. The SOLYP-method introduces an idea of strategy work, a specific approach to uncover (possibly too soft) structures and (maybe missing) consequences and sharpen them.

Benchmarking the Own Strategy Process

So, does it all come down to a fast digitalization of strategy processes? – No, it doesn’t. The digitization rather stands at the end of an analysis and sharpening phase for which, however, it provides the benchmark.

During our work, we have analyzed more than 100 strategy processes of companies of various industries and size–from DAX corporations to internationally active medium-sized companies to "hidden champions." Of course, we haven’t implemented our Strategic Intelligence software SOLYP3 in all of them. However, our analyzes have led to more than 600 SOLYP-"questionnaires" which facilitate the storing and processing of both hard business figures and soft data, such as trends, market observations, and assessments of competitors. These questionnaires provide the basis for a company-wide strategy process which defines the relevant data as well as the structure, consistency, and efficiency, as demanded by Jerschensky and Herrlinger in their statements.

Therefore, these questionnaires offer a meaningful benchmark for any other strategy development process to be analyzed. They allow us to challenge and test these processes: Are there already sufficient structures in place to link hard and soft data? If so, are they standardized? How efficient can a business strategy be implemented? How quickly and clearly can it be communicated across all business units?

We need to answer these and many other questions going beyond that in order to develop a customized process design. Again, I care about a method and a concept of strategy work, rather than a specific software solution. I, therefore, see our work as part of an overall strategic partnership.

After all: Only an individually developed strategy process enables companies to design strategically relevant management processes in a holistic fashion; that is, in a consistent, structured, and efficient manner from data collection to strategy implementation. With our "challenging" we want to define strategy work as a leadership process for any company and make it ready for the markets of the 21st century.

As strategy processes gain this new level of maturity, so can the relevant management processes. Their new quality impacts the maturity level of the entire organization enabling it to meet future challenges in the marketplace with an efficient strategy.  

Read also:

Success Factors of Strategic Planning - Expert Check, Part 1

Success Factors of Strategic Planning - Expert Check, Part 2

Success Factors of Strategic Planning - Expert Check, Part 3

Success Factors of Strategic Planning - Expert Check, Part 4

Success Factors of Strategic Planning - Expert Check, Part 6

Success Factors of Strategic Planning - Expert Check, Part 7