Are There Valid Excuses for Not Taking the Strategic Road?
There is no doubt about the pressure all public company executives face to provide short term results. With few exceptions, the global recession has impacted virtually all organizations in some way. Top executives feel the heat and do not have long to show results before the heat from the fire under them begins to burn. The problem is that strategic shifts in the business can take longer to bear fruit than the average chief executive’s leadership role lasts at their organization. With the need to show improvement in quarterly results immediately, is it making it increasingly difficult for corporate strategy to be at the forefront of leadership’s thought process?
Human nature leads us to be impatient creatures. Corporate boards and investors can be especially uncompromising in their demands for improved share performance right away. The executives who must answer to them are not to be blamed for feeling the heat. It is real and it is intense. If the market wants strong quarterly results and share price increases to happen yesterday, where does that leave the organization’s strategic priorities pertaining to value creation and chief executive’s passion for championing the strategic long-range corporate goals?
If the economy slides downhill and your market demographics shift as a result, do you get a free pass to throw out the strategic playbook and wing it? Perhaps one or more key alliances have fallen apart and now a competitor has decimated your market share to the point where exiting the business seems like a better option than fighting it out. In such a situation where it feels that the organization’s strategy no longer viable, is more strategic thinking called for, or a switch to battlefield tactics?
Partly, the answers to these questions depend on how well the strategy playbook has worked to date, the premises upon which it was constructed and the contingencies that it planned for or failed to consider. Strategies do need to be reviewed and critically evaluated for effectiveness, but more often than not, the organization’s strategy is not wrong – it just needs time to work. The underlying assumptions need to be re-tested, the expectations re-evaluated and the timeframes for expected outcomes re-estimated. If the strategy was reasonable to begin with and holds up to scrutiny as time has passed, why would you abandon it now?
Unfortunately, we cannot just add hot water to a packet of “grow profits” powder, stir and then get instant gratification. That sets up an internal conflict between our normal human nature (which is to panic and throw the strategy playbook out the window) and our calmer more rational and analytical side (which tells us that we have to stay the course to allow our strategy to work).
The primary reason organizations veer off course from their strategy is impatience. Our intuition tells us that our organization must continue to evolve or it will die. Deep down, we understand that the spark of innovation serves as a catalyst in value creation and the profitable growth we seek, but in desperate times we may forget that the mechanism controlling and channeling the innovation is strategy. It is strategy that helps keep our competition at bay and keeps our eyes focused on targets, despite the distractions and diversions around us.
There really are not many valid excuses for not taking the strategic road. Failing to do so may cause you to get lost in uncharted territory without a map.