Crafting and Executing Strategy
Crafting is an art and science of creativity. The overview of crafting has eight elements. A strategy is about competing differently from rivals. Doing what competitors don’t do or, even better, doing what they cannot do.
Elements of Crafting the Strategy
As said, crafting the strategy has eight elements.
Firstly, the tools as in the company’s resources to achieve its vision. Second, people as the ultimate resource that contribute a wealth of knowledge and skills to execute a company’s strategy. Third, communication skills that encode and decode the right messages funneled to the right people at the right time. Fourth, the importance of interaction in order to disseminate messages by having high involvement among employees that would induce collaboration in teams to fulfill the planning and execution of strategies. Fifth, motivation has two sides in action, i.e. intrinsic and extrinsic. Companies that utilize both sides managed to maintain and grow employees’ performance to remain competitive in the market. Sixth, having fun at the workplace generates a greater advantage of being motivated and excited. To curb boredom, managers input to practice a conducive working environment that enables employees to be self-motivated and have to have a passion for some aspects of their job, if not entirely. Moving on to the seventh aspect, the output is the ultimate goal in every action executed. Hence, every single output contribution ought to be measurable to verify such effort taken in the process of executing strategies. Finally, consistency in crafting and executing strategies is the essence of sustaining business survival and growth.
Conceptualization of Strategy
A strategy is about competing differently from rivals. Doing what competitors don’t do or, even better, doing what they cannot do. An effective Execution of strategies has three steps to a successful attempt. First, Alignment “Why”, second, the Mindset “What”. Here, the company builds the case for change and gets people excited and engaged. Finally, Capabilities “How” in which companies identify employees’ capabilities to fulfill and execute the strategies. The basic strategic approach focuses on cost and differentiation. However, crafting an effective strategic approach looks at developing core competencies through improved financial performance, remaining competitive, and obtaining a more sustainable competitive advantage in looking into a sustainable environment, in which products and services do not harm the environment. If it does, then crafting a strategy to curb such practices needs to be implemented to reduce, eliminate or find alternative solutions to serve the purpose.
Basically, there are two ways of looking at a strategy, Deliberate strategy, and Emergent strategy.
A deliberate strategy
takes proactive measures to prepare for uncertainties that may occur due to the current situation.
Emergent strategy
reacts as changing conditions warrant.
The way to plan for a strategy starts with the question “what is our present situation?”, “where do we want to go from here?” and “how we are going to get here?” Hence, the elements of strategy lead to situational analysis, objectives, strategy, tactics, actions and finally control. The three elements of crafting are by emphasize the use of Technology as a feasible way to conduct business in terms of production, communication, logistic,s and marketing. The second element is Business viability which relates to the success factor in the respective market, and the third element is how the product or services leads to Human Values. The driving factor that leads to successful execution is Innovation which derives from the Design Thinking concept.
Strategies need to be crafted and executed in a well-designed process. Hence, by using the above model, it is evident that the strategy has a high assurance to be effective and not redundant. Another most relevant and effective model is the Standford. school of Design Thinking Process in figure 2, which describes that by Empathizing, a deeper understanding of one’s situation could lead to Defining the actual problem, hence to Ideating a solution. Thereafter create a Prototype that channels to effective Testing on defects or the state of myopia.
The company’s strategy evolves over time and is greatly affected by changing market conditions, advancing technology, fresh moves of competitors, shifting buyer needs, emerging market opportunities, and last but not least, innovation. Planning without Action is a waste of time and resources. Immediate action entails timely completion and keeps a company on the right track at the right time. Hence, Action refers to analytical tools as well as strategic tools. The four most effective analytical tools are SWOT, Five Forces (industry), Competitor and Marketing Mix analysis. As for strategic tools, Ansoff Matrix, Generic Strategy, International Venture and Collaboration.
Building a sustainable competitive advantage (SCA) is pivotal to every business in the current environment. Three main elements of SCA are Capabilities, Skills and Lessons Learned. Capabilities are referred to as human capital that leads to innovative ideas relating to the skills of employees in their respective departments and the ability to compare past results and the current market as a result of Lessons Learned in the context of achieving Core Competencies. In the current environment, it is important to leverage core competencies to change and redevelop the way businesses are conducted in the scope of manufacturing, operating and marketing. This change develops the need to secure the environment from further destruction by modern developments. As a result, value-driven is experienced by all stakeholders with the focus of creating awareness in securing the environment.
Socially Responsible in a state of environmental consciousness instead of drifting to the importance of branding and marketing-driven activities. Being socially responsible enables the concerns of environmentally friendly products and services and green practices to be viable. The socially responsible act is made possible with an ethical approach. Hence, the scope of Business Ethics is aligned with compliance, human resource, finance, production and marketing.
In today’s business context, the keyword is Collaboration. An organization faces bigger challenges and threats in the midst of environmental issues. Hence, strategic collaboration with stakeholders adds value to everyone. Therefore, the Value Net model (figure 3) entails collaboration with Customers and reduces the need to invest in market research companies by acknowledging and developing ideas from existing customers’ needs and wants. As a result, it reduced market research costs. Moreover, companies are able to fulfill the precise demand. Next, collaborating with Complementors enables an organization to reduce costs and focus on improving specialization and purchasing other materials, components or even services by engaging complementors as part of the production team. Collaborating with Suppliers has always been a greater advantage in terms of pricing, extended credit terms, quality, branding and contributing inputs for improvement. Lastly collaborating with Competitors has the greatest advantage to the strategic alliance in reducing cost and redundancy.
In summary, creating new ideas need thorough research. Hence, design thinking leads to the uniqueness that develops a competitive advantage. However, competitive advantage is not sufficient without environmental sustainability which is viable with the use of core competencies derived from good Strategy and Execution towards continuous growth.
This article is a summary of the webinar on the same topic led by Dr. Catherine Muthu.