May 2021 Volume 3

OPERATIONS & MANAGEMENT

The Tougher the Times, the More Important Effective Strategies Become What CEOs, Members of Boards and Senior Management Need to Know By Luis G. Flores, Ph.D.

Most industries are having a difficult time. Some are gone and a few are doing well. The times are not only tough, they are also changing. COVID-19 has been a critical factor but is not the only one. We must also consider technology and global competition. To survive and succeed in the future, organizations will need to have creative and effective strategies. You need to be prepared. The good news is

Strategy is a Complex System Many organizations focus only on the grand strategy. However, after the setting of the grand strategy, organizations should also have a set of strategies at all levels that guide the efforts of the different parts of the organization. Each part has a level and a function and needs to have its own strategy. The challenge is that all the strategies should support the grand strategy and should be consistent with the strategies of each other. The lack of consistency in the system of strategies generates confusion, tension, and dysfunctionality. Each part will be convinced that their strategy is best and everyone else is wrong. The conflict is not necessarily visible, but the result is that the organization will find strong difficulties in achieving its strategic plan. Your Head of Strategic Planning Can Be a Friend or a Foe The subject of whether your head of strategic planning is a friend or foe is one of the most important issues in the success or failure of any type of organization. Most companies have a planning department, and the head of that department can be one of your greatest assets—or an even greater liability.The head of planning has the trust and ear of the CEO. They have a reputation for being strategists and for being very smart. They possess much informal power within the organization. However, many times, they are either more interested in protecting their territory or not humble enough to explore other methodologies. They think they know enough or that they may lose their job, or perhaps their reputation, if they consider alternative possibilities. If you have a Head of Planning that is open-minded, humble, self- confident, transparent, accessible and is respected at all levels of the organization, you have a friend. If the Head of Planning is closed- minded, arrogant, secretive, thinks that he/she knows everything, and is feared at all levels of the organization. You have a foe. Strategy Consultants Consultants can be very useful but, companies should be very careful in selecting a consultant (and their Head of Strategic planning). They come from many backgrounds and experiences. It has been said that all a person needs to be a “consultant in strategic planning” is to say that he or she is a “consultant in strategic planning.” Training for strategy analysis is abundant, but it is very limited for strategic

that we can be prepared. Are you prepared?

A good way to start understanding if you are prepared is to assess if you have powerful strategies. You have powerful strategies if you can say yes to the following questions: 1. Do you have a unified management team that works well together? 2. Is your management team used to thinking strategically? 3. Do they understand how the industry may change in the next ten years? 4. Does your company have a solid competitive advantage? 5. Is your management team enthusiastic and ready to take on the challenges of the future? 6. Do you have an effective strategic planning process? What is Strategy? There is little consistency in the use of the term strategy. There is no standardization in the understanding of what the word strategy means or how it looks like. The understanding of strategy seems to be fragmented, loose, and sometimes even contradictory. The interpretation of strategy seems to change with the training, background, and experience of individuals. Strategy can be defined as the grand direction of an organization. In other words, the final set of objectives that an organization needs to pursue that will ensure its long-term success. It also implies the formulation of all the relevant activities that will ensure that the organization achieves its objectives. In popular language, they mean the ends and the means of the organization. Strategy includes the setting of the vision, mission, objectives and action plans.

FIA MAGAZINE | MAY 2021 47