No strategy exists in a vacuum. As strategies move from design to implementation inside the company, outside forces are continually changing: New competitors emerge, the economic and regulatory pictures shift, and customers have new demands.
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But looking outward and adjusting to constantly changing conditions while pushing a new strategy through the organization can be a huge challenge. In a new global survey by the Economist Intelligence Unit (EIU), supported by the Brightline Initiative, more than half of the 500 companies surveyed said that competitor and customer changes greatly impeded delivery of their most recent major strategy.
The ground underneath a strategy is constantly shifting, which demands that implementation include flexibility, says Prabhakar Ghatage, general manager of the Strategy Development Practice in the Tata Business Excellence Group. “The business environment is very fluid. Reference points change. New issues emerge that need to be addressed, and old ones, on which the strategy was built, are not a priority anymore,” he says.
For most businesses, the report found that the problem is not lack of monitoring. A majority of them track a range of customer and competitor information, with the aim of using it in strategy delivery. But the challenge comes in understanding just how to use the new information effectively in implementation: Just one in five companies said that it has effective feedback loops that use all this information in strategy delivery.
Part of the problem is that looking outward and adjusting to the constantly changing inputs while also pursuing difficult implementation goals is a tough balancing act for most companies. “Any global company has to wrestle with being too inwardly balanced,” says Kurt DelBene, Microsoft’s chief digital officer and EVP for corporate strategy core services, engineering, and operations.
What sets apart the survey’s leaders — those companies that said they were able to implement strategy effectively and see real bottom-line impact — is an ability to get useful information to those who can act on it.
More than half of leaders (54 percent) said that their organization can provide “effective feedback to allow those implementing strategy to take into account information from the evolving competitor landscape,” compared with just 35 percent of other respondents. Similarly, 50 percent of leaders said they collect and effectively distribute information on changing customer needs, compared with 34 percent of other respondents.
These leaders say their feedback loops give them advantages in resource allocation, strategic outcomes, and overall performance. Effective feedback brings speed to delivering strategy: 63 percent of those companies said their feedback loops allow them to rapidly develop and implement new strategic initiatives when they are needed to ensure the delivery of strategic goals. They deliver more goals: Over the past three years, leaders missed an average of 15 percent of strategic goals; other businesses missed an average of 21 percent.
In a world whose only constant is disruption, the report notes it is essential to actively engage with those outside the company. “Disruption is something you should embrace,” says Hilton Romanski, CSO of Cisco. “By definition, it comes from the outside. If you are not engaged with the outside, you will miss transitions.”
Such engagement begins with the company’s most important external stakeholders — its customers. The company’s “obsessing about the customer” keeps strategy delivery from drifting away from reality, explains Microsoft’s DelBene.
Leveraging insights on customers and competitors is a key idea in Brightline’s 10 Guiding Principles for strategy design and delivery. Once a strategy is drawn up, companies need to continue to look outside, monitor customer needs, collect competitor insight, and monitor the market landscape for major risks, unknowns, and dependencies.
Advantage in the market flows to those who excel at gaining new insights from ever-changing business environments and quickly responding with the right decisions and adjustments to both strategy design and delivery.
For more information on the Brightline Initiative’s 10 Guiding Principles, go to Brightline.org.