Our first blog reviewed the basic features and necessities for a successful corporate strategy, which takes a holistic view of the entrepreneur in the medium to long term. Operational implementation is an essential tactic and requires information adapted to market conditions as well as the use of clear guidelines adapted for the roll-out. Success or failure depends on this.
For boards of directors & supervisory board committees, entrepreneurs and management, this challenge represents the so-called requirement specification: work to be taken up regarding operational activities or short-term tasks and current problem definitions.
These tools are the application of a methodology that strategically aligns the enterprise. The alignment can be divided into phases of formal data sets that provide guidance for management to set future development. From this comes a holistic view for internal committees to take actions that prompt the right questions, which more efficiently solve the problems at hand.
Strategy Process Phase
Each company is different. Business life cycles and specific processes must be considered by management and then appropriately aligned with the enterprise mission.
This effort comprises a situation analysis, principal definition of purpose, strategy development, and strategy implementation. In addition, as a systematic process to be reviewed and redefined annually, management must consider a risk assessment of potential geopolitical and market influences.
The strategy processes are briefly explained as:
- Situation analysis – the elaboration of data by analyzing and recording them. Specifically, the strengths and weaknesses of the company as well as their associated opportunities and threats in the market environment must be recorded. From this information, management recognizes its strategic challenges and opportunities. Thematic topics in the analysis are strategic business areas, the business environment, company purpose/viability, and SWOT analysis.
- Principle setting – management’s clear commitment to the long-term is developed through company values (core values), the milestones, and next steps toward this alignment as “lived” by the business overall. These principles are derived from enterprise vision, mission implementation, values, and a company mission statement.
- Strategy development – long-term goals that become identified with the company and are questioned and revised appropriately by management on an ongoing basis. Such development should be covered with (1) a basic strategy, (2) a market strategy, and (3) a functional strategy.
- Strategy implementation – refers to the anchoring of the enterprise in its daily operational processing and pursuit. This includes operationalization, overall impact, global implementation, and internal reporting (controls and documentation).
Management decides to use all or certain of these procedures depending on the situation, as the case may dictate. This, in turn, depends on whether a new structure is to be set up or whether specific strategy reviews are to be carried out for the existing business model.
Strategy Project Management
We recommend defining a target-oriented approach to ensure a successful and smooth elaboration. The following aspects should be visualized and considered:
- Clearly define task packages and enrich them with content
- Set time windows for milestones and the planned roadmap
- Ensure linkage of dependencies between the task packages
- Fix responsibilities for the individual task packages
With a clear project plan for project management, internal stakeholders can set effective communication and status meetings. In so doing, management is more effective in achieving adherence by its team because it takes an exemplary rather than a controlling approach.
If the project plan allows it to crystallize a clear core goal and its activities, the lead topics can be derived and arranged. It now becomes clear that all objectives must be interlinked and related to each other in some way. The precise strategy paper now contains the parameters for the business idea. Among others, the following topics should be considered here – summary, approach, principles, situation analysis, challenges, business areas, strategies, financial implications, implementation plan, evaluation & recommendations such as appropriate appendices.
If management turns a set screw, it will influence all that follows. Manufacturing and production processes will become more stable if, for example, variability is reduced, leading to process stability with increased efficiency – also a higher return on investment. This and other focal points can now be set to achieve optimum results.
Strategy development – creative and systematic approach of the feasibility check.
Management can now develop a strategy with a more calm and confident approach. The analysis is now able to create the instruments of development. Suitable criteria enable the business assessment and associated feasibility to be worked out via a:
- Basic strategy – overriding thrust and fundamental decision of the company
- Market strategy – for the business areas
- Functional strategy – for the functions
- Alternative paths – additional strategy approaches
- Evaluation – to be able to make decisions
Once all planning and strategizing have been developed (including the business plan and the implications), the implementation plan can begin. For this, management involves lower divisions of the entire company to be “lived” successfully. Only when every employee understands what is required of them, what contributions must be made, and everything is clearly communicated, then the way is paved.