As we kick-off a new year, business managers know that strategic planning for the next twelve months and beyond should be top of mind. It's sage advice whether you're thinking about ranch goals or personal pursuits.
"Strategy is like an open folder on your desk. You should always be thinking about it." That's the advice of Cynthia Montgomery, a professor of business administration at Harvard Business School.
Montgomery recently authored the book The Strategist: Be the Leader Your Business Needs and shared her thoughts on strategic planning in an October feature article in INC magazine, saying, "...stop treating the strategic plan as a dead, dusty document and instead make it the beating heart of the enterprise."
Montgomery notes that most businesses likely have a formal process once a year where the strategic plan is reviewed. But she says, "That's not where real strategy is made."
Rather, strategy should be dynamic and fluid. The ability to adapt strategy quickly is essential, because what's a good idea now may be a bad idea a year from now - or six months from now.
Thus, Montgomery advises that a good leader should be constantly reinterpreting the business's experiences as they happen. Montgomery notes that entrepreneurs are particularly good at this fluid, flexible approach.
When asked the question: Which is more important formulation of strategy or execution? Montgomery says, "That's a stupid question. What's the point of having a half-baked strategy executed well?"
She also notes that much of the strategy should focus on determining the business's identity, why it matters and to whom. Montgomery says, "Just saying why you are different isn't enough, if you're not different in a way that matters to a customer."
As an example of this, Montgomery says a common mistake by businesses is the claim of being a "one-stop shop." She notes that that may not be enough for customers. Instead better service or better quality products may connect with the customer's needs.
In the end, she notes that success still hinges on the customer. She says, "You've got to look at your customer and how your business is meeting that customer's needs uniquely well. Because the customer will decide whether you are successful."