Over the past couple of years, most companies have reverted to a tactical mode with the focus on survival and short-term action planning. The game plan orchestrated in general by company CEO’s has centered on operational cost-cutting and product/service sales, with a goal of minimizing losses rather than maximizing profits. Long-term business planning and strategic thinking have taken a backseat.
While this management and leadership behavior has been necessary, it is time to start moving away from a purely short-term tactical focus to more of a longer-term strategic focus. The next five years will likely provide growth opportunities for most companies as the economy continues to rebound. Those companies that are best positioned strategically stand to capture the lion’s share of this growth.
In the book Strategy Pure & Simple, author Michel Robert suggests that “the most critical CEO role is to be the Chief Strategist. In this role, the CEO’s focus is on shaping and clarifying the company’s future look or strategic profile. The goal is to determine what the company should look like in the future…products and services offered, markets and customers served, technology orientation, revenue size, number of employees, geographical footprint.”
Just as important as defining what the company will strive to become, is defining what the company will not pursue. A well thought out strategic profile, a much better term than the often-used but misunderstood term ”vision,” emphasizes the discipline required in deciding whether to chase opportunities that invariably come to all companies. By seizing only those opportunities that fit well with the future strategic profile, the impact of utilizing the resources of the company are maximized.
It is important for the CEO and management team to distinguish between strategic thinking and traditional business planning. Whereas strategic thinking has as its goal the defining of what the company will look like in the future, traditional business planning determines how to get to the future from the company’s present state. Traditional business planning, typically geared around the next quarter or the next twelve months, produces the goals/actions/tactics and who/what/when outcomes that most company management team members are familiar with.
An analysis of companies that are truly successful over the long term usually reveals a high level of expertise in both strategic thinking and traditional business planning. Developing expertise in these two related, but decidedly different, competencies should be one of the major goals of the CEO.
Tom Jackson is president and owner of Executive Forums of Charlotte, one of 50 nationwide offices of Renaissance Executive Forums, Inc. based in La Jolla, California. Tom leads over 50 business executives in four independent peer-to-peer advisory boards. Contact him at 704-367-0011or TJackson@ExecutiveForums.com.