Why Do Businesses Need to Think About Strategy?

A business that has been in existence for some time or was simply set up to compete in a market by copying others can continue to function without much need for Strategy if the management team and investors are content with this approach.

They tend to be very operational and spend their time working on systems and customer relationships. Not all businesses see the need to be thinking of Strategy all the time.

Strategy is most often reviewed when a business is undergoing a change in the circumstances around it, such as a merger or acquisition or investing in new plant or machinery. Excellent well run businesses do two things:

1. They review Strategy on a regular basis to ensure it fits with all external and internal factors.
2. They ensure that the current Strategy or strategic direction is embodied into the culture of their businesses.

Without a clear strategic direction it is impossible to effectively manage, change or develop a business. Any decisions made by the management team will be arbitrary without a clear Strategy, no matter how much rigor is applied to analysis. Employee motivation is often closely linked to the ability of the management team to create a competent Strategy and communicate it throughout the organisation frequently.

Winning strategies are often those designed and developed by the people that really know their business, its markets and competitors. A clear strategic direction can be understood at all levels in an organisation, from the boardroom to the shop-floor, if simple to use tools are used.

In any organisation where the Strategy and future direction of the business is clearly communicated and understood the employees and unions are both more engaged in the business and more supportive of the tactical decisions or steps taken by the management team to deliver the Strategy.

A lot of industrial relations disputes result from a lack of openness by the management team and suspicion by the workers of the motives of the managers. Staff buy-in and constant communication of the Strategy and tactical plans to deliver the Strategy are critical to its success. The key task is to simplify the Strategy so that it can be clearly communicated and understood, not to make it so complex that only a select few understand it.

To find out more about business competitiveness from PDQ Strategy call Stuart or visit www.pdqstrategy.co.uk


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Paul Jones

Business Matters Editor

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About Paul Jones

Business Matters Editor