In an age of immediacy and agility, the concept of a more dynamic and flexible approach to strategic planning is a topic all senior executives will be able to relate to. The days of 10 year plans are long gone, and whilst 3-5 year plans are still the basis of a solid overall strategy, there is an inherent requirement for business leaders to be able to adapt to changes in the competitive landscape.
BCG’s paper highlighted three key reasons why companies fall behind their rivals:
- Missing a major strategic shift or industry disruption.
- Seeing a big change coming but failing to develop the right strategy in response.
- Defining a winning strategy but not implementing it effectively.
These are not new strategic issues of course, but the fast-paced environment that businesses operate in today means that their impact can be more sudden and dramatic than ever before. Brands such as Nokia, BlackBerry and Friends Reunited can certainly testify to this.
To increase their odds of success, leading companies today are supplementing the traditional annual strategy-setting process with a more dynamic approach that BCG has named ‘always on’ strategy.
“Always-on strategy gives companies a systematic way to scan for signs of disruption and explore unexpected changes to the strategic environment. Companies identify the most pressing strategic issues and regularly engage senior leaders in formulating a response. And they carefully monitor the progress of strategic initiatives to increase the speed and impact of execution.”
Nicolas Kachaner & Peter Kunnas, BCG
‘Always-on’ compliments the annual strategy process, rather than replacing it, but it provides executives with a more instinctive and dynamic mechanism via which to make adjustments throughout the year.
Clearly, within the highly structured environment of a corporate entity, this is a challenging approach to introduce.
In a Small or Medium-sized Enterprise (SME), however, the situation would be quite different. Most SMEs do not operate an annual planning cycle, and their approach to strategy setting and management would already represent something more akin to ‘always-on’. Certainly the more entrepreneurial SMEs, for example those in the FinTech or Digital sectors, tend to have an inbuilt ability to flex their plans in order to take advantage of new opportunities.
If the SME community is culturally already quite aligned to an ‘always-on’ approach, then what can small and mid sized business learn from the corporate community? Possibly attributes like more rigour and structure when analysing markets and competitors, but they can also learn from BCG, who says the successful implementation of ‘always-on’ strategy requires three key components:
Strategic scanning
Quickly identify potential strategic issues – continually scan internal and external sources that can impact on competitive advantage.
Decision making
Assess issues and decide how to address them – create a list of strategic issues, assessing their impact, prioritise them and give clear ownership to a senior executive for resolving them.
Strategic implementation management
Focus on implementation – monitor and manage the delivery of identified initiatives, where appropriate escalating areas of challenge to the previously mentioned list of strategic issues.
We see many of these approaches being adapted by various clients in the SME space, although many are more reactive and tactical. It could be argued that, unlike an annual planning process, they should not be onerous to embed in a smaller business. What we find in our own work with SMEs is that this kind of structured approach to strategic management is often missing.
That’s one of the reasons businesses of all shapes and sizes look for support from strategy consulting firms such as BCG or Whitecap of course.
The full BCG blog can be seen here.
Whitecap Consulting works with divisions of large corporates and a range of small and mid-sized businesses, helping with strategy, planning and implementation to support growth-focuses projects and initiatives. Contact us to discuss how we might help your business.