By Jean Pousson*
Why wait until you get into financial difficulties to conduct a strategic review of your business?
We have seen over the last few months that many well-known businesses have been conducting strategic reviews. Tesco, Marks & Spencer and Mothercare come to mind; and there are many more. We, at BEL, always emphasise to our clients that they should regularly carry out strategic fitness tests. Very often, when this is done against a backdrop of falling revenues and profits and market share loss, it is probably already too late.
Strategy matters! And far too often Boards neglect strategic discussions because the Board agenda is already full of other important items. We, therefore, question our clients on how much time the Board is spending on real strategic issues; are the really difficult questions being asked.
This is not intended to be an exhaustive check list, but to give you some food for thought, try the following themes for discussion:
What have we learnt about the market and competitors during the last few months?
What is the craziest thing that our competitor(s) could do?
What if we lost our biggest client?
Our customers buy from us because……
What will we look like five years from now?
Who could potential new competitors be?
How do we create shareholder value?
How do we create value for our customers?
Here are a few misconceptions that we often encounter:
Cost cutting is not a strategy.
Structure (or restructure) should be driven by the strategy; a restructure itself is not a strategy.
Corporate strategy drives functional strategies, not the other way around.
A statement like “I want us to be number one!” is not a strategy but the potential result of a chosen strategy.
The Board, no matter how intelligent and hardworking, does not have all the answers.
Preparation of a business plan is secondary to strategic choices.
Monopolies and dominant market share can evaporate
And hope is also not a strategy!
Feel like doing something different?
Have a look at the BEL online strategic healthcheck tool: http://www.board-evaluation.co.uk/index.php/services/8
This is based on solid experience and contains well over 100 questions exploring all aspects of strategic planning. It is, in essence, the full executive medical check-up as opposed to the quick visit to you GP!
What can also be useful is to get the Board to complete and compare the findings against the findings of management and/or other stakeholders. What have you got to lose?
Financial Analysis Made Easy:
Jean, who was recently voted ABFA Lecturer of the Year, regularly lectures on the subjects of strategy and financial awareness; see him in action by following this link: http://www.youtube.com/watch?v=yig76KQ9gnI
* Jean Pousson, BEL’s Director of Consultancy, shares some of the findings, positive and negative, from his vast experience of advising clients on their approach to strategy and strategic planning.