I have written on this previously but the issue of companies treating strategy as a one-off annual event continues to prevail in many organisations. Long gone are the ‘set and forget days’ when a set of strategies could be discussed and drafted at an annual 1 or 2 day retreat only to be later consigned to the top drawer.
This is not to say that an organisation’s strategy should in any way change on a month-to-month basis. Strategy by definition is about the long-termand strategies will usually run over several years. But what does change is the external environment in which the firm operates and, of course, management’s ability to effectively implement the strategy given the changing environment.
This necessitates constant review, and ongoing dialogue at both Board and Executive level, which not only generates a better understanding of the strategic issues that must be addressed, but it improves the strategic thinking capabilities within the organisation.
Just as great authors write every day, so it is in building the strategic intellect of the organisation. The more that Directors and Executives are immersed in truly strategic conversations, the better their lateral thinking and creative problem-solving abilities will become. The human brain is like any muscle in the body: stop using it and it will atrophy. The strategy function, housed in the pre-frontal cortex, requires constant exercise in order to perceive patterns and solve complex issues.
This is not to say the annual retreat should not be held. It should. But it is not the end of the process. Rather, the issues identified at the retreat, and for which strategies are developed to address each of the issues, should form the basis of board meeting agendas over the ensuing 12 month period. They will also inform executive team meeting agendas and a significant proportion of both should be allocated to strategic conversation. For boards, we would recommend 30-50% of meeting time be allocated to strategic matters.
Strategic conversations require preparation and a discipline to maintain the debate at the appropriate level, rather than delve into operational detail. This can be a challenge but the payback is significant.
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One definition sees strategy as the long-term, almost irrevocable commitment of major resources