STRATEGY – Its all about Choices

We often think that strategy is all about the long term. But is it true? In my view, it is a combination of things that we do and not do in both long and short term that is hallmark of a good strategy. It is all about choices, most times difficult choices in a constrained world. Coming up with a good strategy is not that hard as long as you approach it in a structured fashion and over time it becomes second nature. Let me propose a 3 step process

The first is to understand the big picture. Many a times we get into conversations and we think we understand all of it. We also think that the objective is clear and we get into planning. In some extreme cases, we already seem to have an answer without the problem being clearly articulated or understood. Let me take an example to drive home the point. You may be familiar with the cost optimization program that many organizations run. There are a set of levers to focus on and the process seems all too clear. Have you ever asked a question, 'Is our objective to drive down cost or to improve profitability?' They seem the same but they are not. If it is about cost, then one will only look at ways in which we can reduce costs however it is about profitability, then one will look at both improving top-line and/or reducing cost. In reality you can still maximize your profits without reducing cost because your top-line or revenue may have significantly improved by getting better realized revenues for same cost through value added services. Therefore, understanding the big picture, listening and asking the right questions is important before one starts to visualize the strategy.

The second is to identify critical information. The question is how do you do that? It is not about assimilating anything and everything; it is about the ability to pick information that is critical for decision-making. Many of us may have gone through case studies that run into multitude of pages during our education and actually lose track of what the real issue was. This is a classic case where we needed to identify the critical elements influencing decisions and outcome. There is a lot of good information out there but for strategy, not all of it may be needed. Many make a mistake of noting down everything that that could result is spending disproportionate time in capturing information, which has no bearing on decisions that you will make. You may also have missed on information that could have a material impact for the same purpose. These data points will likely not be clear and most times ambiguous.

The third is all about prioritizing choices, deciding which one will we pick today and which one will be the one for tomorrow. There is an important element of urgent and important and most of the times we spend times on urgent things. It is important that we consciously plan a portion of our time for important things. Important things are what you put on your calendar and urgent things are what others put on your calendar! How many of us do something that is not required today? It could be about learning new things or taking a step back to reflect.

As simple as it may sound, strategy is about making choices and it can be aided by a set of principles that you can practice. Happy practicing.