In today’s complex operating environment, making sound strategic decisions is more important – and more difficult – than ever. Globalisation, sweeping regulatory change, disruptive technologies and growing demand for infinitely customisable products are some of the challenges that businesses must address.
To make the right strategic decisions, executives must look at their business more comprehensively, identify and understand the big risks and opportunities, and examine multiple strategic options under different scenarios to pick the best solution – and do this fast enough so there is still time to act.
Our approach is to create a ‘big picture’ view of the organisation – including how it interacts with its environment and stakeholders – to create a solid basis for designing and analysing potential strategic options and guiding effective action.
This approach, which we call integrated strategy analysis, provides the rigour and speed that managers need for making timely and robust decisions. We have used integrated strategy analysis hundreds of times with public and private sector organisations across many industries.
Understanding strategic challenges by looking at the big picture
The first step in integrated strategy analysis involves synthesising and cross-checking data and information from a wide range of sources to identify the key factors and cause-effect interactions driving an organisation's performance over time. Importantly, we combine readily captured metrics and quantitative data with softer, more qualitative information (managers' judgment, survey opinions, research) that is typically excluded from other analyses.
The resulting causal picture shows how key factors and stakeholders (customers, employees, suppliers, government etc) in the environment interact over time. In high-stakes cases, we take the further step of transforming this causal view of the business into a dynamic simulation model that analyses many more strategic options even more rapidly. This provides the management team with a shared ‘big picture’ view of what is happening in the business and why, and lays a solid foundation for strategic decisions on current and future challenges. For example, for a company in the aircraft manufacturing industry, we helped the management team understand why aircraft order rates would plummet in the near-term, which allowed them to re-time the launch of a new flagship product until market conditions were more favourable.
Identifying uncertainties, risks and opportunities
Having a causal picture of the business makes it possible to explain the forces driving performance, and thus answer a key question: "how did we get here?" Answering this question is a prerequisite for deciding what policies and actions will push future performance in the desired direction. Through disciplined analysis, our integrated strategic analysis process identifies aspects of the business and environment that can drive the biggest changes – positive or negative – in business objectives (eg market share, profit, employee retention), and highlights uncertain areas with high impact on performance. Armed with this knowledge, we helped the management team of a global electronics company design a cohesive strategy to exploit their big opportunity to reduce and reallocate advertising spending across products and channels to grow revenues, while limiting downside risks.
Assessing and selecting from a range of strategic options
The goal is to select now, without perfect information, the strongest set of actions that will move the business towards its strategic goals. Here it is important to consider not only the potential ‘bottom line’ benefits, but also the robustness of each strategic option under uncertain future conditions and the relative difficulty and time required for implementation. The rigour of the integrated strategy analysis process ensures that even very different strategic options and future scenarios are evaluated on an ‘apples to apples’ basis. The team can confidently use the resulting insights to choose a way forward that will deliver good results despite uncertain or adverse conditions.
Our integrated strategy analysis approach has helped hundreds of executives make the right strategic decisions and achieve dramatic lasting results in their businesses. A noteworthy example is the credit card company that achieved a 30% increase in market share by introducing a novel and (at the time) controversial strategy to offer the first co-branded credit cards.
To translate a 'big picture' view into strategic action for your organisation, please contact us now.