Strategy is the blueprint for deployment of a corporation’s assets (plant/premises, staff, equipment/tools, capital, access to capital, other infrastructure).
Strategy determines at a summary level what, why, where/who, and, to an extent, when. Good strategy maintains and builds competitive advantage.
Corporations look to ROIs for specifics relating to the deployment/use of assets. ROIs commit resources for a fixed timeframe, up to and typically beyond a breakeven point. ROIs deal specifically with what, where, who and when, with “why should we approve this?” being the main focus of the ROI. Tracking progress toward ROI objectives and sub-objectives or goals is the domain of operations management, not strategy.
Which brings us to the question. . .
What is the best approach to developing and making good use of strategy?
The first possible consideration is do we develop strategy bottom up or top down? The answer is both.
Next, how do we develop strategy ?
My preferred environment for strategy development is a KnowledgeBase that is able to consolidate summary information from multiple entities (sales, costs, facilities, capacity, current products/future products, staff, partners/channels, competitors, legislation).
If dynamic links can be established with the various entity record management systems in use, summary data can be automatically posted to the KBase. Once in, thousands of documents can be displayed on a single screen using 3-D “Rolodex”, “Russian Doll”, even spherical displays, and free-form searches can be engaged.
What is fascinating about free-form searches in a graphic environment is the software tells you what it did not find as well as what it found.
Here is a view of a satellite KBase that allows users to search an entire space comprising some 6,000 satellites plus launch pads and rocket launch vehicles.
[Click to expand]
Big improvement over stacks of spreadsheets and report listings!
Lastly, how do we use strategic information for high level decision-making?
One of the main steps in strategy deployment is innovation and this knows no boundaries.
Two other main components are information and decision-making. We cannot have the latter without the former but there is no guarantee that information that is available will be used when making decisions.
In the past, we had too much information, or too little, or the information was often in the wrong place. Today we have a lot more information, but the accuracy of this information is often suspect, and the information typically still is in the wrong place.
Information must typically be subjected to analytics, although innovation can, to an extent, short-circuit analytics.
There is more to decision-making than information and access to information. We need to add experience, judgment and timing.
Finally, we know that business owners always have an ‘executive override’ so it’s best to include this in our list of components to strategy development.
Looks like we have a list of some eight phases to high level decision-making regarding best use of scarce resources.
- Decision Making
- Executive Override
The starting position is to be able to view information in multiple different ways. The information must be up to date and easily accessible to both humans and software.
Usually, some form of modeling is needed in order to make non-subjective decisions (alternative scenario scripting/acting out, SWOT).
We have access to a vast array of tools for decision-making. Results have to be presented in the form of an ROI as a means of filtering initiatives and allocating scarce resources. Experience helps both re deciding which projects to go for and which ones to avoid.
Signoff on any proposed initiative requires the use of judgment/timing and, at the end, like it or not, you have a subjective override that can derail the entire process.