Effect not Equal to Cause when Planning a StrategyWhen reviewing a business it is essential to cut through the symptoms of problems and reach the underlying causes. Questions which can assist in revealing the real causes include: · "What stopped the business from?" · "What caused the cause of?" · "Why didn't the business achieve a 25% return?" By way of an example consider why this company may be unable to increase its market share: Because it cannot penetrate major customers, because its product range is too narrow because the company doesn't have the capability to produce additional products, because of shortcomings in R & D because of a lack of expertise and resource because R & D is not an immediate priority because of a lack of profits because of a high interest burden because the company is over-reliant on borrowings because the shareholders won't/can't raise additional permanent capital. The moral in this case is that there are no major customers due to under-capitalization! SWOTs - Keys to Business StrategiesHaving built up a picture of the company's past aims and achievements, the all-important SWOT (strengths, weaknesses, opportunities and threats) analysis can commence. Strengths & WeaknessesStrengths and weaknesses are essentially internal to the organization and relate to matters concerning resources, programmes and organization in key areas. These include:
If a start-up is being planned, the strengths and weaknesses are related mainly to the promoter(s) - their experience, expertise and management abilities - rather than to the project. The objective is to build up a picture of the outstanding good and bad points, achievements and failures and other critical features within the company. Threats & OpportunitiesThe external threats and opportunities confronting a company, can exist or develop in the following areas:
Against an uncertain and shifting background, the objective must be to identify and prioritize the key SWOTs in a one-handed manner. Develop Business StrategiesOnce the SWOT review is complete, the future strategy may be readily apparent or, as is more likely the case, a series of strategies or combinations of tactics will suggest themselves. Use the SWOTs to help identify possible strategies as; Build on strengths, Resolve weaknesses, Exploit opportunities, and Avoid threats. The resulting strategies can then be filtered and moulded to form the basis of a realistic strategic plan. |
Simple & Short Strategic PlansNotwithstanding that "battles are often lost for want of nails", a company rarely succeeds or fails for minor or trivial reasons. The causes are usually substantial and are often self-evident, at least to an outsider. For example, the business was completely over-borrowed; management was weak; a major new product opportunity was identified; legislation changed; a major competitor went bust or expanded; the company never reinvested. It should be possible in the course of a few pages to set down the main elements of a business's vision, mission, values, objectives, goals, strategies, SWOTs etc. The compilation of a short report along these lines is likely to prove much more difficult than a lengthy dissertation which mixes up details and principles, and confuses the broad picture. Independent advisers or non-executive directors can play a valuable role in this process because they can readily adopt the role of devil's advocate and also bring external knowledge and expertise to bear. |
Promotion comes as a result of ones performance on the job over a period of time, or it could be said to be an advancement in ones profession. Succession on the other hand is a shift in position as a result of promotion, transfer, retirement or death of others. It could be as well a change in policy of an organisation leading to reorganisation of operations and human resources. Getting succession right is vital. There are two approaches that can be used at different times to ensure success. The internal selection approach advocates choosing successors from within, to ensure a smooth transition, preserve company values, and encourage employees by showing a potential career path. Most organisations struggle with how to turn succession into success. It is necessary to use either internal selection or the Darwinian approach at different levels or at different times. For example, a high percentage (80%) of senior roles may be internally appointed, while junior roles are sel...
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