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Tips for executives to become more strategic

Posted on | July 25, 2012 | No Comments

This is the age of the strategist. The volatile economy has set alarm bells ringing as companies spend more time on strategy building. Many organization’s top teams are frequently seen indulging in strategy dialogues that eventually pave the way for the company to stay more competitive, seize opportunities, make timely decisions and respond quickly to unforeseen risks.

There is a significant shift in the way strategies are developed today. Gone are the times when corporate strategy was merely a compilation of strategies developed by the managers of individual business units. The scenario is quite different today with executives across levels being held responsible for coming up with winning strategies, planning their execution and implementation program. This post, an excerpt of a recent article published in McKinsey Quarterly published by reputed management consultancy, McKinsey & Company, lists three tips to help executives to become more strategic.

Strategic tip # 1
Build industry understanding and learn what strategy means in your industry

When you are in the top ranks of a company, you have already been exposed to the company’s core strategy frameworks. You have developed your own understanding, maybe while doing an MBA or in a corporate training program. These frameworks are usually common for all industries but you should be able to think strategically in terms of your industry. For this, it is critical to understand and learn the economics, laws, and psychology pertaining to your industry.

For instance, if you belong to the mining industry, it is important to interpret the strategic implications of cost curves, real-options valuation, and game theory. In addition, being considerate to all stakeholders’ is also critical, as that would have a direct influence on your potential growth opportunities.

You can find comprehensive information on strategy building pertaining to your industry in books and on the web. Alternatively, you can enroll in customized executive education courses for a deeper insight. Nowadays, organizations are seen planning an off-site activity to facilitate their employees in developing an understanding of how to be an expert strategist in a specific industry.

Building industry understanding should be a perpetual process as experience-based instincts have more influence on developing strategic insights about an industry. Executives can also take part in experiential games or exercises to view their industry from a different/ important vantage point.

Strategic tip # 2

Learn the art of identifying potential interruptions

The best way to identify the looming changes hovering over the company or industry is to engage more executives in a strategic dialogue. However, giving intelligent insights and foreseeing the disruptions merely by indulging in a debate is not a cakewalk and requires a lot of effort from the executives.

For instance, how can the executives tackle technology disruption foreseen in the near horizon? Most executives may not be acquainted with crosscutting technology trends while others may tend to rely on their chief technology officer’s understanding. However, such crosscutting trends have the power to overturn value chains, transform industries and significantly shift competitive advantage and profit pools.

Therefore, it is critical for executives to periodically visit some technology hub, like Silicon Valley, to keep them abreast of the changes taking place in their industry. Some may consult a more technophile member to get acquainted with the changes. In fact, several executives are seen to harness a “reverse mentoring” relationship with junior colleagues to get know how on latest innovations and technology.

Competitor intelligence is one more factor that executives need to constantly monitor. It is not just the long-standing competitors that can prove to be a threat to you in the near future. Even nascent competitors can make or break your business. Therefore, pay heed to your competitors’ strategy. An expert executive can pick up weak competitive signals. It needs an ongoing training of existing strategic processes. It is seen that executives from a diversified background can lend more insights into issue-based competitive analyses.

Strategic tip # 3

Develop effective communication skills
A more proactive strategy-development process places a lot of emphasis on effective communication and participation of the executives. In short, set a goal to conduct a strategy meeting every week (2-4 hours) or discuss two strategy topics ensuring high participation levels. A key for modern strategists is to learn how to develop messages that can penetrate the clutter and stand apart. Develop an innovative communication strategy that puts across your point with a huge impact. Experiential exercises are the ideal way to help executives boost their communication skills.

Over time, when strategies become a real-time journey, the executives should be able to push data and show the implications in the present moment. There is no point in raising debates and assigning a team of analysts to come up with solutions at a later date. Ideally, start exploring modern software tools to come up with visual and interactive spreadsheets that are more dynamic and facilitate a data-driven dialogue.

Conclusion

Instead of just increasing the diversity or number of executives engaging in the creation of strategies, companies should focus on facilitating experiential tools to enhance strategic capability even at the highest order.

The above three tips can help executives become more strategic and thereby, drive companies to become more innovative in developing real-time corporate strategies.

Excerpt of an article published in McKinsey Quarterly .

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