Juggling strategy with operations is the new must-see act

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Sumit Vij, Business Process Consultant, Finance & Shared Services Transformation within Consulting and Services Integration Practice at Tata Consultancy Services Australia and New Zealand answers key questions senior leaders are asking about changing customer behaviours and other pandemic-related shifts on the strategic decisions of C-suites.

Posted: November 2020
One of the biggest questions for all companies is whether their strategies are still relevant.

Sumit Vij, Business Process Consultant, Finance & Shared Services Transformation within Consulting and Services Integration Practice at Tata Consultancy Services Australia and New Zealand, says changes in customer behaviours and other pandemic-related shifts are testing the strategic thinking of CEOs and their boards.

“Further to this, there is pressure to juggle future strategy with managing current action plans,” he says. This balancing act between strategy and operations is bringing big questions to the fore, with Sumit Vij offering a snapshot of 10 observations he’s sharing with key executives.

1. Two in three strategies fail because of execution.

A well-publicised report by Harvard Business Review in 2016 found that 67% of strategies – even the better ones – failed at the execution level. The same report also established 61% of executives were not prepared for the strategic challenges when appointed into senior roles, with at least half of them failing within the first 18 months of taking the top job.

The question is why most organisations fail to execute their business strategies. 

2. Leaders must move from the boardroom to the trenches

To assess their strategies, executives need to get out of the boardroom and on to the shop floor. They need to take off their suit jackets and roll up their sleeves.

The shifts in customer behaviours and other external forces brought on by a pandemic are seismic, but part of the fundamentals for developing new or improved strategies and action plans is understanding your business.

Leaders must understand at an operational level what is happening in the business – at a staff level, at a customer level and at a vendor level. If not, decisions being made in a boardroom can be out of touch with the operational realities. But having this knowledge into the input of strategy is only one part. The other is, once agreed, the strategy needs to be concisely communicated back to all parts of the business.

A strategy might be the right one, but it may fail in the execution because there is no alignment between the boardroom and the shop floor. To implement any strategy requires everyone to understand it, and to play their roles.

This requires the C-Suite to show leadership from the trenches.

A boardroom full of consultants doesn’t address the elephant in the room, which is “why do most business strategies fail”. The 100-plus Power Point slides of a strategy might make perfect sense to those who compiled them, but out in the trenches is where they need to be understood. This is where the rubber hits the road, as they say, and most likely the place where a strategy will derail. 

3. Strategic priorities include people

While there are many factors in considering strategic priorities – and they will vary from business to business – it is important to remember people. The main people focus in strategies are customers and staff.

Customers are currently the driving force behind many company decisions and strategies because of their changed behaviours in the pandemic-altered world. But employee engagement and a company’s learning and development can be a big part of strategic priorities right now.

4. Beware of the knee-jerk reaction

Companies with a longer-term strategy in place may have been in the midst of a transformation project when the pandemic hit. The challenges were immense, but some handled it better than others.

To throw out all or some part of the strategy, cancelling projects and letting go of staff, is a very short-sighted response that maybe some felt they had no alternative, but we have seen instances in Australia where after the first wave the businesses who took this path were left with no quick means of recovery.

A knee-jerk reaction based on the fear of the unknown has in some cases actually multiplied the pain, with redundant staff taking away corporate knowledge and important IP.

Those companies who took such action for the sake of an immediate bottom line reduction in costs now have to start again, often from further behind. Bigger companies with solid strategies have built-in plans for the unexpected, and an event like COVID-19 is a perfect example, where it becomes a short-term blip on a longer path.

The mining industry is a good example, for many miners it hasn’t changed their strategy, it’s just meant they have had to assess current actions along the way.

Good strategies have contingencies and there should always be a Plan B and Plan C for when short-term obstacles appear. 

5. The unprepared leader is a real thing

There’s no doubt that a turbulent event can narrow focus in the shorter term to the day-to-day planning. But even before anyone had heard of COVID-19 it was reported that 70% of project leaders spent less than one day a month reviewing strategy, while almost 85% of leadership teams spent less than one hour per month discussing strategy.

To be able to navigate through any sudden shocks while still having a bigger picture view is creating challenges. Strategy has never been more important, so it shouldn’t be put on the bench.

6. When juggling you can’t drop the ball

It’s often said that strategy is about choosing what not to do as much as it is deciding what must be done. Companies have bandwidth, resourcing and financial pressures at the best of times.

Now they have to apply a simultaneous double-act of operations and strategy – and it can be something of a high-wire performance.

For all the reasons we’ve mentioned, strategy must be informed by operational realities and clearly communicated into coherent actions that teams can follow through on. If it’s not solid and clear it won’t work.

There is also no room for inter-office politics at a C-Suite or middle management level. Everyone must be on-board and signed up for executing strategic imperatives and performing the usual day-to-day business duties.

One reason many CEOs fail is that they get bogged down in the “comfort zones” of internal areas such as finance reporting and staff management.

While being across the internal day-to-day is important, for a strategy to fly, it requires the CEO to have a helicopter view and be a visionary for the mid-to-long term.

7. Don’t be lazy or vague in strategy language

Now is not a time for motherhood statements. There’s a good example of “vague versus concrete strategic priorities” of two airline companies.

The first airline listed five imperatives as follows: Focus on customers’ needs and wants; Be an industry leader; Engage our team members; Provide a return for our investors; Look to the future.

The second airline, Southwest, set a clearer vision: Integration of Southwest’s and AirTran’s network and operations; Fleet modernisation; Continued incorporation of the larger Boeing 737-800 aircraft into the Southwest fleet; International capabilities and new reservation system; Continued growth of Southwest’s Rapid Rewards frequent flyer program. Southwest’s strategic priorities are so much clearer than the first and leaves its operational teams in no doubt what the priorities are.

8. The COVID cover-up and strategy traps

It would be a mistake to blame all things on the pandemic, or to sweep anything that wasn’t working under the COVID-19 rug. If the global event was an excuse not to do something, or cancel projects that were previously considered vital, then this may damage the mid-term and longer-term strategy.

Similarly, company executives that were more “change resistant” in preference of doing things the same way prior to the pandemic, may have used this is as a ‘silver lining moment’ to stop the planned transformation.

Doubt and second-guessing can easily grow in the environment we are in, so having the courage to stick to plans – and at the same time re-assessing the changed behaviours that require an evolved strategy – is important.

Having your head in the sand and doing nothing is not a strategy. Another non-strategy is the “cut and paste” approach. Just because something worked within one business, even if in the same industry, there are no guarantees it is the right approach for your company.

There are so many nuances, such as the people, to consider if a strategy that worked elsewhere has merit in your own business, so beware the “once-size-fits-all” trap.

9. The inside joke about change management

Many strategies today will be of 3- to 5-year timeframes because in most industries, it’s hard to look any further forward than this with any degree of confidence.

Companies face one of their biggest challenges when a CEO and/or key executives and boards change. There’s a joke among some company operational teams – the implementers of strategy – that the biggest challenge in any change management projects is actually a change in management.

Having continuity in strategic teams is paramount. A new CEO or management team can be like a new government, which may choose to do something very different to what their predecessor was doing.

There’s nothing wrong with reviewing strategies, and certainly any CEO needs to own the strategy, but it’s worth keeping in mind how this affects the operational teams. It further highlights the need for operations to be involved in the strategy and then be aligned with the C-Suite for concise action plans to deliver it.

10. Three tips for the future to go on with

Strategists must trust their long-term strategies since they have been carved out after great thought, but at the same time they should also be ready to take a leap of faith to tackle unprecedented issues such as the pandemic.

The devil lies in the detail: Strategists must be ready to take a plunge and reach out to the operational teams to understand the nitty-gritty challenges being faced. The simplest answers to the most complex strategic problems often lie with the workforce at ground level.

The fantastic out-of-the-box ideas from the team may sound enticing but might not fit in to the organisation’s long-term strategy. Strategists need to call out outlier ideas and avoid communication failures as much as possible to further avoid any mismanagement from a strategy execution point of view.