There's much more to 'strategy' than the business plan - A (61)

If 'strategic' means 'significantly affecting mid-to-long term performance', then strategic management covers many tasks. (A) A service quality issue.

I have been challenged for my claim that the issues in the figure below are all unavoidably parts of managing strategy.

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Strategy, those challengers say, is only about Formulation and creating consecutive one year Plans (the top-left item above). This goes to the very heart of the “What is Strategy?” question.

A couple of stories may make my case.
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Case A: Over-extending a SaaS business

This business-to-business SaaS company offers Cloud-based systems to help real-estate companies manage key aspects of their business. It has a recent service-quality issue.

Clients make support calls, either needing help with functionality they don’t understand, or highlighting bugs in the system. The call rate is too high for the support team, so backlogs build up that have to be ‘blitzed’ with weekend working.

Just an ‘operational issue‘ – right?

The strategic causes of this challenge.

To become the leading provider of its kind, the company responded fast to feature-requests. This would both grow revenue from those clients, and increase the appeal to potential new clients.

But [1] those features were rolled out faster than they could train its clients to use them [2] the features were not sufficiently intuitive to not-need training, and [3] those features added more bugs to those already causing trouble.

The strategic consequences of this challenge.

Client frustration with the service and its bugs was bad enough. That and the staff stress and cost.

But client users also met at conferences and on social media. So service problems could become widely known, and undermine the previously successful capture of new clients.

Yes, that’s an implementation failure, but that doesn’t help the company from where it is today.

The non-solution?

… hire and train more staff to handle the high rate of support tickets. It takes 3 months to get newbies up to speed, training is by current staff who are already over-loaded. Oh, and the business is growing by 50% a year!

The real solution.

If we can’t fix service capacity, we have to fix the demand. So pause new-feature development and move developers to [1] making features more intuitive [2] helping clients on existing features [3] finding and fixing bugs. Those steps halved the rate of support requests over 3 months (with more to come), from where growth could restart.

Is this “strategy”?

It certainly makes a huge impact on medium-to-long-term results. But it wasn’t in the latest Plan, because no-one saw it coming
… and they certainly need a “strategy” to fix the issue – what to do, when, how much, week-to-week, across several functions
… and it’s the same leadership team (strategic managers) that wrote the business plan who now have to deal with the issue
… and, we can use exactly the same tool to fix the issue that we could, and should, have used to build and pre-test the strategic plan a weekly digital-twin dynamic business model.

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Using standard strategy methods. I have previously exposed the limitations of the standard strategy methods taught to our MBAs and execs – precisely because they have little to say about implementing strategy. But there is a way to exploit those tools and get to a sound and adaptable implementation plan, as you will find in this course …

Get our full course on strategy and implementation.
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Categories: : business performance, course available, strategy