In his byline, PA Consulting Group customer loyalty expert Jesper Krogh Jørgensen discusses how many top executives don’t spend enough time working on company strategy and are also not getting enough out of the time they do spend on strategy work.
When CXOs don’t know how much time they spend on strategy or fail to understand how to make efficient use of their time, it can cause company shareholders to lose billions. Examples of where they are failing include when companies are too late to identify and react to major changes such as changes in customer needs, new competitors or new technologies.
In Jesper’s view the most efficient way for top management to spend their time is: 10 per cent on strategy analysis, 10 per cent on strategy formulation and development, and the remaining 80 per cent on executing the strategy.
Analysis (10 per cent)
Jesper continues: “According to a recent survey by IBM, most CEOs find their greatest challenge to be the so-called complexity gap. 80 per cent of them believe the complexity in their organisation will increase, but less than half of them feel prepared to tackle these changes. This underlines the need to monitor and analyse the trends that causes most complexity in organisations, and include both quantitative and qualitative analysis in the process.”
Development (10 per cent)
The next 10 per cent should be spent on strategy development. This involves deciding "where you want to play" by defining your must-win battles, such as building a more customer-focused organisation, or expanding into new markets and following up with a plan that lays out how you plan to win these battles.
Execution (80 per cent)
Top executives should spend the remaining 80 per cent of their time on strategy execution. This involves developing new capabilities and managing cultural change in their organisation, introducing strategic initiatives and/or entering into new external partnerships as done by many large companies today, particularly in the financial sector.
Jesper Krogh Jørgensen is a customer loyalty expert at PA Consulting Group.