Does your Strategy Stand Up to These Seven Tests? - IMD
Strategy is the driving force behind any company’s success, but when you have spent an enormous amount of time crafting and honing your strategy it’s possible to lose perspective.
Step back and ask yourself these seven questions to evaluate your strategy:
1- Do we have a vision or purpose that provides clear direction?
Your organization’s mission, vision, and goals and objectives are the key drivers – do you know exactly what they are? Make your purpose statement as honest and simple as possible, otherwise you risk alienating people.
2- Do we have the right portfolio of businesses to achieve our purpose and goals?
Critically evaluate whether you need to invest in a more complex, wide-ranging portfolio of businesses to support the company at each step along the way.
3- Do we have a strong differentiator and competitive advantage?
By riding the wave of transient advantage, you can reduce effort and maximize impact.
4- Do we have the core capabilities to win today, and the right investment in future capabilities?
Be careful not to make the mistake of investing disproportionately in building future capabilities. There are trade-offs involved. Make your strategic choices looking at the trade-offs – they are irrevocable resource investments.
5- Do we have new business models to drive sufficient growth?
When you see the beginnings of a secular trend – a trend that is likely to make a permanent impact – double-down and go twice as fast as your competitors, before you miss the boat.
6- Are we leveraging the entire ecosystem to drive growth?
Partnerships and alliances are important forces for expansion. Co-creating with customers, competitors, and start-ups provides opportunities for enhanced growth and can be a win-win situation.
Actively developing new concepts and new ideas that could disrupt your own model is key, perhaps as a separate entity.
7- Does our strategy have enough flexibility?
Agile organizations that can pivot quickly, allowing for rapid change due to continuously changing circumstances, will have an advantage here. With overall uncertainty high – felt across all sectors, industries, and geographies due to the pandemic – disruption continues on a daily basis.
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