Companies Without Strategies Are Heading For Tragedies
Many businesses are still focusing on yesterday’s problems at the expense of forgoing future opportunities. The best chess players always have a strategy in place. But in businesses, future planning seems to play second fiddle to analyzing of past performance. Architects would not build a house without the architectural plans because selecting the wrong layout or laying the wrong foundation or using the wrong building materials could result in disaster. The house can collapse on you after you move in. A strategic plan is the architectural blueprint for your business.
Executives always have the excuse for not doing strategic planning. They reckon that things are changing so rapidly. It does not make sense to do ten or even five year planning as events will change and it is not possible to preempt changes any more. It is true that nowadays environment changes are very rapid and that makes long-term planning even more difficult. Non-strategic planning companies give the excuse that planning results in paralysis through too much analysis. It is also true that some companies cover their backs with expensive market research and spreadsheet analyses.
However, one should not throw out the baby with the bath water. As a matter of fact, it is even more critical to have strategic planning during turbulent and rapidly changing environment. It is like the Titanic, which had the most modern technology in her times but did not plan for eventuality and disaster when it hit the iceberg. We are living in difficult times today and tomorrow things may be worse. With the possible threats such as terrorist attacks, infectious diseases like SARS, bird flu, mad-cow diseases etc, it will be naive for any CEOs to think that they are immune or protected.
One must not be fooled into thinking that a company is successful because it has a good strategic planning system in place. Your success may be coincidentally due to a buoyant market or weak competition. Also, one must not be mistaken that the use of processes such as the annual budget is tantamount to application of strategic planning. If the data is purely internal that is sales figures and product costs, it is not strategic planning. You need to factor in the external factors such as customer data, competition, economic trends, etc.
Also, studies of successful companies such as IBM, Procter and Gamble, 3M found that new innovations and great ideas do not originate from the centralized strategic planning department at the headquarters. Most of the good ideas and innovations were generated from outside the industry or the people who regularly interact with the customers. Strategic planning must not remain in its ivory tower but should incorporate the realities of the ground.
The former chairman of General Electric (US), Jack Welch drew on the strategies of the Prussian general and military writer Clausewitz, Karl von (1780 -1831). One of Clausewitz’s theories included an explanation of why a military leader could not devise a complete battle plan and then stick blindly to it: “Man could not reduce strategy to a formula. Detailed planning necessarily failed, due to the inevitable frictions encountered. Strategy was not a lengthy action plan. It was the evolution of a central idea through continually changing circumstances.”
His own strategic thinking matched that of the general. He constantly reinvented GE over the years as circumstances and the competitive environment shifted. There was an evolution to Welch’s strategic thinking and each major initiative built on the one that preceded it. He would wage one ‘battle’ and then wait to see how the results panned out. In tracing the evolution of GE during his tenure, Welch has drawn a stair-step-like chart that depicts the stages of GE’s culture change. Work-Out laid the foundation for Best Practices, which created a platform for Process Improvement such as Six Sigma, etc. Preparation of a strategic plan may not guarantee success but failure to do so is certainly a recipe for disaster.
Dr Mike Teng (DBA, MBA, BEng) is the author of best-selling book, “Corporate Turnaround: Nursing a Sick Company back to Health.” He is known as the “Turnaround CEO in Asia” by the media.
corporateturnaroundexpert.com corporateturnaroundcentre.com
Previous Articles Highlighter:
When The Company Is Sick, Call The Corporate Turnaround Expert (1)
Unfortunately, no company seeking to turn around would run an advertisement that says: "Company not making money and need turnaround specialist. Send in your application." There are many ways of finding quality professionals to enable you to fix your business.
EBay: Business Opportunity? You Bet! (2)
Don't forget that carriage doesn't just cost the price of a stamp! Webhosts - do you have your own website? Are you getting the best deal? To conclude this (far from comprehensive) article, I would summarise an eBay business as being a great opportunity for those who have limited funds.
Can You Really Make Money With Affiliate Programs? (3)
Choose the wrong one or market it the wrong way and you could wind up with nothing to show for your efforts but a lot of wasted time and/or money.
Proper Hair And Scalp Conditioning (4)
What type of hairbrush do you want to use? Different hairbrushes do different things. There are hairbrushes that cause extra shine and some that well help with curling your hair during blow-drying; there is even a brush to help with keeping your hair from being tangled.
Some Of The Most Important Rules In Website Design (5)
Again, you want the visitor to stay on your site as long as possible and most people will leave a site immediately that has audio they can't get rid of.
Good Dance Shoes Are A Necessity For Good Dancing (6)
This depends on what style of dance the shoe was designed for. Regular men's dance shoes have suede soles that make the dancer glide across the dance floor. This kind of men's dance shoes are good for doing turns and spins.
Hypertension And High Blood Pressure Medicine Solutions (7)
You may want or need high blood pressure medicines. Erol Orderland writes about aging and disease from his home in the Netherlands. Visit www.high-blood-pressure-medicines.com for more information and high-blood-pressure-medicine.blogspot.com for related news
A Garden For All Seasons (8)
Winter, the season in which many gardeners forget about the landscape, can offer color and visual interest through evergreen shrubs, bark, plant form and seed heads. For example, a clump of ornamental grass could be left standing through the winter.
Who Else Wants To Work-At-Home? (9)
You get to avoid the stresses and expenses surrounding driving your car. You no longer have to endure traffic congestion and the endless traffic when the weather gets bad.
Getting A Credit Card - What To Avoid! (10)
Use it for purchases that you would normally pay cash for and when the monthly statement comes in, pay the balance off. That way you show yourself as a responsible customer and have incurred no interest fees.
Newer Articles Highlighter:
Are There Any Benefits Of Online Courses? (1)
Furthermore, there is improved communication with classmates and the instructors through instant messaging, email, chat rooms, threaded discussions, phone or fax. The lines of communication are wide open in the online classroom.
5 Ways To Get The Most Bang For Your Buck When Hiring A Plumber (2)
Counter this by being careful about what is poured down the drain and occasionally running some boiling hot soapy water down the kitchen sink. Hair in bathroom sinks is another common problem.
Things To Consider Before Choosing A Managed Care Plan (3)
Before choosing a healthcare insurance plan you have to consider a few important things to decide which one will be the best for you. There are many plans to choose from.
What Is POS And Managed Health Care Plan (4)
This type of insurance plan can be called a hybrid plan or a combination of both HMO and PPO. It provides the freedom of PPO along with the low cost benefits associated with an HMO plan.
What Is PHPBB All About Then? (5)
The key features of the phpBB Internet forum system are: Simple installation Multiple-language interface Support for a host of database servers High security, with powerful and extensive authorization system and strong encryption for password safety Unlimited forums that can be organized into unlimited categories Unlimited forum members Private or public forums Powerful search facility Private messaging facility Template customization Messages formatting in various font styles and sizes, also allowing image posting, code display, automatic URL linking Easy-to-use admin panel A large community of phpBB users providing free support phpBB Forum Hosting A multitude of phpBB forum hosting service providers exist in the web services market, offering right from 100% free or inexpensive forum hosting packages to premium paid forum hosting packages, depending upon the quality of the server, the features included in the package and the quality of the customer service and support provided by the forum hosting company.
The Art Of Sprinkler Heads For Beautiful Lawns (6)
The advantages of using such a system are as follows: 1. Water is applied directly to roots in a continuous arrangement. 2. Fertilizer can be added to the water and distributed directly to the feeder roots without washing away or evaporating.
Engaging In A Home Based Business Opportunity Network Marketing (7)
However, in most network marketing companies the generation of personal sales is a pre-condition for you to receive to receive commissions from the sales of the other members of your team so it is still important for you to generate some personal sales.
Need A Debt Consolidation Loan? - Try Second Mortgages (8)
That step would be to refinance your first mortgage. It only makes sense, though, if you can refinance at a lower rate of interest than what you currently have on your existing mortgage and present debts, such as your credit cards, that this would be a good way to go.
Homeowners Insurance Guide (9)
If a third party lender finances a home, it becomes important to obtain homeowners insurance, in order to cover the building and the material possessions inside. Homeowners insurance is a package policy: This means that homeowners insurance takes care of both, the damage caused to the home, and the legal responsibilities involved.
What Kind Of Credit Cards Are There And Which One Should I Get? (10)
Recent years have seen a real increase in the type of credit cards available. So much so, that now you really have to look and see what is available, and it can actually be a little hard to choose between them.
Permalink to Companies Without Strategies Are Heading For Tragedies