Strategy in the modern times - Part 1

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Our workplaces have been evolving and many companies especially younger start-ups are becoming flatter and flatter in the internal work environment.

Whether big or small, for profit or for non-profit, all companies are guided by a strategy or set of strategies.

Strategy is the long-term planning and work of the organization; represents the core values the are currently being pursued by the organization, regardless of whether the employees are consciously aware of their organization's values. (IMAnet.org)

Strategy is not just a vision, but a set of plans and processes. Strategy is not something just for the leadership team separate from the entire work force within the company, and often existing already without realizing so. The current strategy of an organization can be observed by the choices it makes in the process of investing its resources and spending its money. (IMA) If the company invests most of its money into marketing, its competitive strategy is marketing and advertising, for example. If most of the members of the company and resources are in the design team, its strategy can be said to be design.

Vision vs. Mission

Many young companies confuse their vision as an actual strategy. The vision statement is the description of what the organization intends to be or become and the mission statement is how an organization will act or do and in itself is not the actual strategy (IMA). Strategy guides the day-to-day operations work in the organization and provides a framework mechanism to evaluate the long-term effects of that work on the future of the organization. It represents the core values. These specific plans are (hopefully) derived from a unified mission and vision. (IMA) Once set, should be clearly communicated to all members of the company for a collective ownership, especially for the flatter companies to be able to successfully implement and accomplish goals and objectives both short-run and long-run.

The organization's actual strategy is not the vision statement and mission statement but a much more detailed set of objectives that establishes how the organization will successfully implement its mission in a competitive environment. (IMA)

A business strategy is a set of guiding principles that, when communicated and adopted in an organization, generates a desired pattern of decision making. A good strategy provides a clear roadmap, consisting of a set of guiding principles or rules, that defines the actions people in the business should take (and not take) and the things they should prioritize (and not prioritize) to achieve desired goals." (HBR)

External and Internal Environment

Strategic planning needs to be designed to work within the environment an organization is in -- both external and internal -- to be effective and successful. External environment such as economic trends, government and legal, demographic, competitors (current and potential), customers, suppliers and stakeholders. Internal environment and structure of its employees (human skills), assets, financial resources, intellectual property, etc.

One of the external factors that heavily impacted manufacturing companies in California in the recent years was increased tariffs and volatility of these rates on imported goods. One of the internal environmental factors was changing labor force and higher turnovers. Millennials: the Job-hopping Generation, Gallup. The external example brought on significant changes to profitability and costing (expenses paid to suppliers which now carried heavier tax burden, please refer to previous post), and the internal example brought difficulties in finishing certain projects timely that required long stable hours from the many team members within the company. These external and internal environmental factors can also be correlated, as external environmental factor such as Covid-19 crisis brought temporary closures of many manufacturing plants, new legal policies, and highly impacted internal environment of its employees, assets, and financial resources.

Strategic plans must be sensitive and realistic to such environmental factors to be successful. Organizations must be aware of these changes and determine their market strengths and weaknesses, opportunities and threats as well as internal environmental factors. Company-wide newsletter or meetings to help each employee as well as the management team to be aware of these environmental changes were very useful in our experience, and created a smoother line of communication that came from clear and mutual understanding of these changes and perspectives. And both managers and employees must take collective ownership, and carry out the plans together as a company/organization. We must be open to receive new ideas and suggestions from various departments and consultants, however, not spend too much time on a trial-and-error basis but decide early on which plans to take and create short-term as well as long-term action steps and review process to ensure the completion and fruition of these strategic goals and plans.

And both managers and employees must take collective ownership, and carry out the plans together as a company/organization.

We were once in charge of a weekly President's Report which was shared in part to many other members of the company than just the C-executives. It had listed monthly goal, % reached, fill rate, inventory levels, etc. On other sets of newsletters were current market status and stories and numbers of close competitors with references listed (public url or source). To some other members of the organization, profitability or lack thereof for certain SKUs and categories were shared. Being aware each week of these environmental changes both internal and external helped push all members of the company to focus on priorities of the month, without a lag in receiving information, and together reached the goal. It was a tremendous force of positivity and togetherness. These reports were also presented in simple yet clear and professional manner, based on accurate data, and helped everyone to grasp the information without redundant words or unnecessary emotional views that pass from mouth to mouth.

Organizations must manage both the strengths and weaknesses inherent, and adjust to take advantage of the opportunities as well as guard against threats in their industry. (IMA)

*We will discuss different types of strategy and ways to implement in our next post.

*This blog is researched and written by Opere Suo Group other than quotes with hyperlinks attached. All rights reserved.