STRATEGY AND REALITY

Successful companies have relevant, viable strategies that evolve as the world changes. So many companies work hard but to no clear end. These companies die at a pace that is determined only by the amount of cash in their bank account and/or the inherent strength of their brand. To develop a workable strategy the leader must honestly and objectively stand back and assess the organization's abilities and the market realities.

Not setting a strategy built upon a viable niche is an irrevocable mistake. We have seen the consequences of this at so many different companies whose names we no longer remember. Equally misguided is the organization that sets a strategy based more on theory than reality. It does no good to develop a strategy that sounds good if there is no chance that the players and processes can execute. Strategy must be reality based. There are few things more frustrating for associates than to have a strategy put in place by the leaders when the tools and talent are not in place to support it. This creates a culture of frustration and demoralizes all involved.

Successful strategy development requires an intimate understanding of what is happening in the field: the localized competition, the competencies of the team, the sophistication of the technology, the infrastructure in place and so on. It is not something that can be done in a vacuum. Voices from the people who must execute the strategy should be heard and listened to. Developing strategy is not an easy process, but it is arguably the most important in any organization. It must be inclusive. No one has all the answers.

As hard as it is to set a strategy, it is just as hard to rigorously evaluate its ongoing relevance. Reality changes. A company must adhere to certain core principles but also must be willing to reassess and change components of the strategy as the world changes and new opportunities arise. Deciding when to change and when to hold firm on strategy is one of the most difficult responsibilities of the leader. Often there is no clear-cut answer. Unfortunately, an incorrect decision may undermine the very fabric of the company and/or be extremely expensive.

These are often the loneliest decisions a leader makes. The leader must listen, question and be open to alternative views when deciding upon and evaluating strategy. But ultimately, the leader is responsible for setting a course that when executed will bring the organization success. A failed strategy often robs the company of any prospect of long-term success, proves very expensive and carries with it a very high opportunity cost.

In today's unforgiving world, developing a strategy based on today's reality is the first requirement for any company to become high profit.