Strategic Thinking & Action

Updated: Mar 19 2004, 05:30am hrs
Strategy is probably the second most often used word in corporate-speak. The most often spoken word is bottom line. I am quite intrigued by the usage of the term strategy by members of the top management of companies. There is corporate strategy, business strategy, market strategy, people strategy, and so on. In most conversations on strategy, the meaning of the word and its intent is very difficult to comprehend. To this confusion are added terms like vision and mission. The utility of the resultant product is anybodys guess. As a result, many academics have ridic-uled the conceptual basis of strategy and questioned the functionality of strategic planning in corporations.

It has been argued that the strategy formulation process is redundant in environments that are evolving. At the same time, many researchers are spending a significant part of their academic lives exploring and understanding the strategic content and intent of corporate actions. While most research and debate on corporate strategy takes place in the US and Europe, Indian corporations freely import the outcomes. In fact, Indian management experts and corporate heads also change their orientation toward the strategic planning process in tandem with the contemporary trends. Often, I have been asked about the desirability of undertaking a comprehensive strategic pla-nning exercise or, the more hyped, visioning exercise for companies. The popularity of such long-term planning exercises seems to co-exist with the scepticism towards it. Where is the problem then

Strategic thinking, long-term planning or visioning are attempts by any organisation to chart out a plan of intent and action for ensuring a sustained growth and existence in its context. Therefore, it is a growth and survival-related need. The basic assumption underlying such an effort is that any entity or organism needs to continuously prepare itself in order to survive the changing context. The issue gets more complex when the resources in the environment are limited.

Strategic planning is a systematic approach to address these issues. It is important for corporate managements to realise that the process of going through a long-term planning or strategic thinking exercise in a formal and systematic manner provides an opportunity to introspect. The exercise is more to do with revisiting dearly held beliefs and assumptions than producing voluminous documents. The quality and actionability of the plan is largely dependent on the quality of such a reflective process.

In my view the process of planning rather than the sophistication of the tools used determines the robustness of the plan and its quality. Yet, most top managements miss this point. The pervasive experience is that the strategy document is read, and maybe revered, by only the corporate planning group. In most cases, the subsequent strategic acti-ons of organisation have little to do with the strategy document and its contents. One is persuaded to believe that the main reason for this is the low investment of the collective energy and commitment of the critical membership of the organisation in the strategic planning process. While the importance of long-term thinking for sustained organisational health cannot be questioned, there is a definite need to improve the process. Particularly, when there are fundamental changes taking place in the characteristics of all the factor and product markets, there is a need to create corporate environments that facilitate fundamental rethinking by the top management.

Strategic planning efforts should focus on this rather than crunching numbers or building scenarios based on insipid data gathered from the Internet. Key drivers of strategy should real-ise that strategy formulation is a creative, and maybe fuzzy process, rather than a clinically analytical one.

Once this is realised, it is likely that the outputs of strategic planning exercises will find more custom and gain credibility amongst the internal and external stakeholders. Indian corporations that desire leadership positions need to create environments that encourage and nurture creative thinking in strategic planning exercises.

The writer is a Mumbai-based management consultant