Wednesday, August 10, 2011

Strategy and Decision-Making

As an experienced management consultant and Managing Director of BizBuilding, a firm that provides management advice to small and mid-size businesses, I spend a lot of time doing strategic planning and helping companies plan for the future.
With the current economic upheaval I’ve found that my concept of strategy and the way I advise my clients has changed significantly.
First, strategy now seems to be as much about good decision making as good planning. Rather than thinking of myself as the expert architect of a process that will eventually yield strategy, I now work with business leaders to make good decisions…. in real time.
In arriving at these decisions, we draw on some of the tools used in the typical strategic-planning process, but apply them to making the crucial decisions that need to be made multiple times a day by managers and other business professionals. 
Second, formulating strategy is an explicitly financial exercise. Understanding the economics of any potential decision is critical. It doesn’t make sense to develop a strategy first and then consider the financial implications, even though that is still a standard planning approach. I now view financial literacy and rigor as job requirements for both business executives and strategic consultants. 
Third,  I have come to believe that strategy must always be tied to brand. Good decisions reinforce a company’s brand, while bad decisions ultimately tarnish it.
When I start working with managers, I typically ask how they think the marketplace wants them to be NOW.  Understanding your customer and knowing their needs is crucial to having a successful outcome.  In the past many consultants worried that this question was only concerned with the end result….making a profit….and did not consider the process (or operational structure needed) to get to this end.  With the economic strain that many businesses are under now, keeping true to your customer (and financial implications) is vital.
As the recession and its aftershocks linger, the margin for error financially and strategically is extremely thin for most businesses.   Strategic consultants who emphasize helping managers make the best possible decisions on behalf of their company—as quickly as possible—provide the greatest help and return on investment.

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