Strategic management is far from complex, difficult or mysterious. What is a mystery is why so many Australian managers fail to do it.
Way back in 1990, I was commissioned by the Australian Chamber of Manufactures to identify key reasons why small-medium sized businesses were falling behind their international competitors and going out of business. Within a few days of starting, I had sixteen reasons, most associated with inflexibility, resistance to change and poor or non-existent future plans. (I went on to produce a video and several workbooks on the subject – I wonder how many managers took the time to look at them?)
In 1996, while researching reward systems in Australian organisations for another text and film, I visited many companies and was pleased to find evidence of formalised strategic management in some; and disappointed to note its absence in many others.
In 2001, I worked with an international organisation - a household name, that has a $2 billion turnover p.a. worldwide. While the Australian arm of the operation considers itself ‘small potatoes’ ( with about $60m turnover p.a.) it is the most profitable of company’s branches. I was amazed to find no evidence of strategic planning at the local level. When I posed this question to the MD, he maintained ‘there was little use in (them) planning if all the decisions were made by Head Office’. If you have no strategic plan, even if it is only at the Country level, how can you possibly begin to manage strategically?
Earlier this year, I recall sitting with another Managing Director of an extremely successful international company in a boardroom in Sydney. I remember making the the following comment. ‘Success based upon acquisition alone will be short lived – to sustain growth it must be supported by the development of compatible, supportive infrastructures, including well selected, trained and resourced people. Otherwise, it will be only a matter of time before service levels drop, mistakes are made, and you start to lose customers!’ Within two months, their best client had moved on, claiming poor service, long response times and too many errors
Last month, I was in Lima, Peru, helping with the strategic planning of another worldwide organisation. This outfit turns over about $USD150m p.a, and is a highly efficient and effective operation. During the week's reporting sessions, CEO’s from around the world were referring to all sorts of KPI’s to help describe performance. Our conference was almost over, when we made a most embarrassing discovery. Apples were not, it appears, actually apples. In over fifty years of business, this organisation had never slowed down long enough to agree on worldwide, generic definitions for their ways of measuring success ( their KPI’s). Guess what I sent them away to do, before we meet again in August?
You may notice that I’ve headed this article ‘strategic management’ rather than ‘strategic planning’ - that’s because I think that the latter, the planning part is only a tiny part of the bigger picture. Sure, communicating a vision, (the job of the CEO) agreeing on the mission, (the job of the executive team) and deciding upon goals, objectives and KPI’s (the job of managers and staff at all levels) can be a slog. Some organisations spend a lot of time and money getting these things right, then fall down on the real work - strategic management.
Yes, the secret to good strategic planning is to get the above things in place. Vision, mission, goals, objectives and KPI’s. But it will be strategic management that will get the best results. How do good leaders get results? By giving away power and authority, clearly articulating expectations, providing support and most importantly expecting accountability. Can we really put that off for another day?
© Terry McBride
The Managing for Performance Program.,
Extract of address to a Senior Executive team Sydney
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