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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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.