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Strategic success: An elusive dream or a real possibility?
Ungerer, Marius
Prof Marius Ungerer, associate professor in Strategic Management on the MBA programme of the University of Stellenbosch Business School (USB), contends that strategy is a vital part of the DNA of a successful organisation.
Strategic management practices are often over-emphasised as being a key driver of business success. Paradoxically, the art of strategic management, along with its associated practices, is one of the most underutilised tools of business leaders.

The success ⌐ or failure ⌐ of a business can rarely be ascribed to just one reason or decision. Business success is the result of a number of factors that are combined to create positive conditions for a company. The idea that there is a fixed formula for business success is an illusion. There is, however, a brighter side that reflects more than just another list of excellent business practices as a path to quick success.

It is increasingly being recognised that long-term sustainable business success from a strategic perspective is based on two leadership capacities. The first is the ability of leaders to make strategic choices that improve the performance of their organisation. This implies that the current success ⌐ or failure ⌐ of a business is the result of past strategic choices. The second involves the capacity of business leaders to instil a culture of strategy execution. This means a firm focuses its resources on the areas that are the key to its success. Over time an organisation becomes the result of the strategic options it has executed and the effects of these choices are displayed in the firm's competitiveness in the strategic landscape. Strategic choice and strategy execution are key means of leveraging the creation of sustainable stakeholder value. 

Strategic choice: Too many leaders are either oblivious of or unwilling to make the tough choices that create a strategically focused organisation. While speeches about a firm's strategic direction reflect a commitment, this does not always translate into a concerted effort by everybody in the organisation to make it a reality. When the strategic position of the firm is not articulated properly, it is difficult for well-motivated employees to align their thinking and actions with the strategic intent of the organisation. A leader's future success is not driven by either the chances he/she takes or by postponing difficult decisions, but by the conscious and intended choices he/she makes today. 

Strategy execution: Business results that are better than those of your competitors do not occur by themselves. Good results come from carrying out the strategic choices a firm has made. Those who are able to quickly execute their strategic intent reap the benefits. The focus should be on getting a few things done properly rather than just 'talking a good talk'. Organisations that are able to mobilise a focused execution of their strategy also benefit from feedback, creating an opportunity for emergent strategies, proactive adaption and learning.

Risk: While it may sound simplistic, the reality is that only a few companies get the basics right on strategy. As previously suggested, strategy is vastly under-utilised, but the question remains as to why it is so difficult to achieve consistent long-term strategic success. By its nature, strategy is a risky business and there are no guarantees. The reasons are related to the influencing environment in which organisations operate. This environment is the context in which the competitive business game plays itself out over time.

There are four key factors that contribute to the risks associated with the strategic choices leaders need to contemplate: 
  • Changes in the needs of customers increase risk. Customer needs are dynamic rather than static. Consumerism, mass media communication and the need for individuality are all trends that shape the needs of customers. Efforts by the Competition Commission in South Africa are changing the power of consumers forever.

  • Technological developments change the domain of what is possible.These developments enable the ongoing creation of new products and services and increase opportunities for better internal efficiency of organisations. The internet provides new opportunities and is as significant in the modern era as the invention of cars and telephones were for a previous generation.

  • Competitors in a strategic landscape are constantly changing. New and current competitors are continuously changing their competitive onslaught. The performance of a market leader often tends to force all competitors in a strategic group to new performance heights. As an example, Dell was the leading supplier of personal computers for many years. However, Hewlett-Packard has recently surfaced as the new pack leader.

  • Access to the resources a firm requires for executing its strategic intent contributes to risk. Competitive resources in the form of systems, people and processes take time to develop and need to be nurtured constantly. Intangible assets like talent, reputation and relationships are elusive constructs, but are integral to the success or failure of a business. To be recognised as an employer of choice, attracting and retaining outstanding talent has become the hallmark of many great companies.

Application: Our informed sensitivity to the change drivers listed above is a starting point for strategy, but only when these strategic choices are practised as an ongoing business process and not as an annual 'rain dance'. In this case, strategy is not just the domain of a few, but equates to the contribution of all in a firm, as strategy represents what the staff do on a daily basis and not just what the firm wants to be in the future. Strategy execution is created through involvement, meaning the efforts of employees and partners of the firm are aligned and focused on the execution of choices the firm has consciously made. This focus can be strengthened retrospectively, by use of feedback and reflection for achieving ongoing strategic success. 

Owing to the dynamic nature of customer needs, technological developments, competitor forces and resource stocks, it is a starting condition to treat strategy as an emergent people-centric process. Strategy cannot be a static paper-based activity only. Organisations which accept that their leaders must create clarity on their strategy and see to the execution of it, will enhance their chances to be the future winners. 

Strategic success is an organisational practice that leaders and their followers need to live into; it is not a standard to live up to. More than being just a tool, the strategy of a successful organisation is a vital part of the DNA of the organisation empowering all its employees to contribute actively to its execution from an informed perspective.


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