Most people would prefer a shortcut to success: a way to build a business, increase customers or multiply profit exponentially without doing a particularly large amount of hard work. Nice if it happens! But it’s not a plan. And neither is waiting and hoping for it.
Interesting that, for all the talk (and I appreciate I should probably get out more) of GAAR and it’s potentially game changing influence on planning, hardly any advisory businesses we’ve consulted with have gone so far as producing a specific GAAR strategy for their business.
Two-thirds of businesses we’ve recently engaged at some excellent round table events, hosted by Octopus investments, readily admit that GAAR has had a specific impact on the way they operate – mainly in terms of solutions and products considered, but also in terms of processes (notably the need for evidence) and communications with clients. For some of the larger businesses, amends have been made to client facing materials, while for fewer still GAAR has been referenced in a broader policy statement. But there’s very little evidence of GAAR having been truly taken to the heart of business and embedded into strategy.
Most people see strategy as an exercise in producing a planning document. This reduces planning to a list of initiatives with timeframes associated and resources assigned, which in truth makes them little more than budgets with lots of explanatory words attached (perhaps not so surprising given the influence the finance function typically has in the strategy process in most businesses).
To make strategy distinct from a fancily-worded budget it is important to get away from the tendency to plan a list of stuff to do. Strategy is not a check list —“it is the making of an integrated set of choices that collectively position the firm in its industry so as to create sustainable advantage relative to competition and deliver superior financial returns” (Harvard Business Review).
There is one strategy for a given business — not a set of strategies. It is one integrated set of choices: what is our ultimate goal; where will we play; how will we win; what capabilities need to be in place; and what management systems do we need?
Sure, it involves the hard and often pretty dull and difficult work of planning and then taking hundreds of little steps that might not work. But it done well it will also tell you what initiatives actually make sense and are likely to produce the result you actually want.
Extracts from IFA interviews…