1. What is a good strategy?
But why do so many strategies end in failure? Few people understand that a good strategic planning process needs to focus most of its energy on "how" to implement the strategy. A sound strategy is definitely not a pile of numbers, nor should it be reduced to "astrological" predictions. It just applies the same formula to estimate the estimate of the next decade year after year. The essence and details of the strategy must come from the people closest to the action, who should know their own market, resources and their own strengths and weaknesses.
If a strategy does not pay attention to the question of "how" to implement it, it is likely to fail, and AT&T has had such a painful experience. When Michael Armstrong became the CEO of the company on 1997, the company's main profit source was long-distance voice and data services. As for wireless communication, the proportion is low, but the growth trend is promising. The company's financial statements are flawless, its liabilities are quite low, and its share price is around $44. However, the external environment was changing at that time: with the emergence of new competitors, long-distance telephone charges were declining, while Wall Street was optimistic about Internet companies and cable TV companies, believing that they would have strong growth potential.
Armstrong complied with this situation and formulated a new strategy so that the company would not miss the emerging growth market. He believes that the company's great opportunity is to provide customers with information transmission services, long-distance and local voice and data services and comprehensive purchase of multimedia services through broadband. To provide these services, companies must contact customers directly, but customer information is in the hands of regional telephone companies. The company weighed several options, including building its own infrastructure in important metropolitan areas and even acquiring cable TV operators.
Armstrong's strategy has four basic elements: (1) acquiring cable TV operators in order to have direct and substantial contact with customers; (2) Provide a set of services for customers and seize the proportion of communication expenditure of customers higher than that of competitors; (3) Take prompt action to create income growth and offset the reduction of long-distance telephone income; (4) The control measures implemented according to the Telecommunications Law passed by 1996 should prevent local telephone operators from joining the competition, because according to the regulations, they must first completely open their networks to long-distance operators. This strategy seems to have won the support of securities analysts after careful consideration. The initial reaction of the market was quite positive, but the final result was a complete failure: in February, 200 1, 1, the company resold the shares in the cable industry that it had originally purchased for 100 billion US dollars, and the buyer (﹝Comcast﹞) paid part of the shares. This action brought AT&T back to its original point, and its share price fell to $65,438+08.
What's the problem? In order to ensure the success of this strategy, the above four basic elements must be sound, but looking back, it turns out that these four elements are actually based on wrong assumptions. The main force of the company's broadband business is to acquire TCI and Media One, two cable TV operators with good image, plus some existing services. The acquisition of cable operators is expensive, and the long-distance tariff is falling faster than expected, which leads to the company's share price falling. In this case, the cost of acquisition is relatively high, which also adds huge liabilities to the balance sheet. In addition, consumers' interest in the whole set of services is not as good as expected, and the company's marketing means and timeliness are not ideal, and the time spent on the implementation of the plan far exceeds the original plan. Finally, the government's regulations on the Telecommunications Law have not been implemented as expected, which makes the company almost caught between Scylla and Charybdis: on the one hand, regional telephone companies have entered the long-distance market; On the other hand, long-distance operators can't grasp the regional customers as expected.
Comments: if a strategy wants to succeed, it must pay attention to implementation and implementation!
2. How to make a good strategy
Today's strategic plan must be an action plan for business leaders to achieve their business goals. When formulating strategies, leaders must ask themselves:
Does the organization have the ability to do something indispensable to achieve its goals, and how should it do it?
To make such a plan, we must first determine and define the key issues behind the strategy. How is your enterprise positioned in the whole enterprise environment, including market opportunities and threats, competitive advantages and disadvantages?
Once you have made a plan, you must ask again: What is the correctness of the assumptions on which the plan is based?
What are the advantages and disadvantages of the alternatives? Is this organization capable of carrying out this plan?
What should be done in the short and medium term to ensure the long-term success of the plan?
Can the plan be modified according to the rapid changes in the enterprise environment?
In order to keep the strategy from being divorced from reality, you must link it with the flow of people: is there the right person to carry out your strategy?
If not, how do you plan to recruit talents?
On the other hand, the specific details of the strategic plan must be connected with the operating plan, so that the actions of different departments can keep pace and move forward where you expect.
3. Who will make the strategy?
The strategy must be formulated and owned by those who will be responsible for its implementation in the future, that is, field personnel, in order to play an effective role. Employees can help by collecting information and using analytical tools, but the substance of the strategic plan must be planned by the work supervisor. These people understand the enterprise environment and organizational ability because they are in it. They are in the most advantageous position and can introduce various ideas; They know which ideas work in the market and which don't: they know what new capabilities the organization needs; They will weigh the risks and evaluate various options; They also know how to solve some important but always difficult problems in planning.
Of course, not everyone can become an excellent strategic thinker through learning, but as long as the team operates, is guided by a leader who has a comprehensive understanding of the enterprise and its environment, and uses strong dialogue as the core of the implementation culture, everyone can contribute-and can benefit a lot from participating in the dialogue.
4. Seven steps to effectively implement the strategy
The meaning of execution comes from the correct strategy: the meaning of process (execution) lies in doing things right (result), and the meaning of result lies in doing things right. Obviously, the right strategy is crucial. Design reasonable strategic flow and operational flow to make the strategy suitable for competitive environment and more suitable for implementation. On the one hand, managers are required to consider whether the strategy can be fully implemented when formulating the strategy, on the other hand, managers are required to interpret the implementation from a strategic perspective. A good strategy should be implemented accordingly. Therefore, managers need to participate in the implementation after formulating the strategy. Only in the implementation can we find out whether the strategic goal can be achieved in time and accurately, and managers can adjust the strategy in time according to the implementation situation, so that the strategy can effectively achieve the goal. If the manager's role is positioned incorrectly, ignoring execution as a necessary authorization will end until the strategy is found to be unable to be implemented and then adjusted. In order to better understand this problem, the following are seven steps to effectively implement the (effective) strategy proposed by management consultant Robert Zago Tower:
(1) quantitative vision
Grand visions are often overwhelming, such as "becoming an industry leader". An effective vision is to turn an enterprise's illusory dream into a feasible goal. Therefore, the first step in establishing a vision is to explain the clear steps for enterprises to go from place A to place B. For example, within five years, the turnover will increase from $65.438+50 billion to $300 million. So, how much revenue is a milestone that enterprises must break through? How many new products do enterprises have to launch to achieve such operating income? How many employees are employed? These steps can push the management team to think about the situation of the enterprise and find out what to do.
(2) communicate strategy with slogans
The strategy itself is complex, but enterprises should use simple and direct slogans to convey the essence of the strategy and integrate it into the lives of employees. For example, when the quality of Ford Motor Company was questioned, its slogan was "Quality First", which clearly let everyone know its strategic goal.
(3) Planning results
Enterprises like to use management tools (such as balanced scorecard) to measure important indicators in order to achieve the purpose of warning. The disadvantage of this method is that if the indicators are not up to standard, people will start to panic, and it is not linked to the implementation method of the solution. The solution to this problem is to measure the strategy as a business commitment and clearly describe the specific actions and results that can be measured within the time limit. For example, "expanding new markets" can be changed to "expanding the European market, which can generate an additional income of $5 million in the fourth quarter", and finally a person in charge can be appointed to be fully responsible for this strategic goal.
(4) Plan what you don't do
An important factor that hinders the success of the strategy is that employees think that the new strategy is extra work. For employees who have been overworked, it is only a matter of rushing to let them implement the new strategy. Therefore, it is necessary to remove the strategic issues that do not need to be completed, so that employees will not lose their focus. For example, Dell computer (Dell) withdrew from the retail market and switched to direct sales. Therefore, Dell worked hard and became an industry leader.
(5) Open strategy
In the past, strategy was only in the hands of executives. Open strategy makes employees understand, and employees can better understand what jobs meet the strategic needs. At the same time, executives should also combine the standards of performance evaluation with the strategy, otherwise the implementation of the strategy will easily fail in the end. In this way, the sales staff will know that too small a transaction will not be accepted, so as not to waste time; A case that is too big cannot be accepted because the enterprise is incompetent.
(6) Automatic management of status and progress
On average, senior managers spend about 65% of their time controlling the progress of work. In fact, these precious time should be spent on important decisions. Enterprises should use network tools to control work progress and latest income, and know whether activities deviate from strategic objectives. In addition, network tools can control risks in advance, for example, reminding supervisors to limit the expenses of network undertakings, or promoting marketing activities according to the needs of high-profit customers. If business executives can control this information, they can save a lot of time.
(7) Establish a virtuous circle between implementation and strategy.
Strategic management is the process of managing strategy implementation, including the combination of internal and external information. Inside information is knowing which activities are running on the track. What work is important today? External information includes industry trends, rival actions, economic trends, etc. Managers must master: What trends have changed? Are these trends against the enterprise's strategy? What measures should be taken? Only by combining internal information with external information can strategy and implementation interact positively.