Strategy - why does the company's strategy enable success?

Strategy - why does the company's strategy enable success?

Strategy is an exceptionally fascinating topic from the perspective of history. The concept of strategy was created in Ancient Greece as part of warfare. Ancient warlords and philosophers understood that successful action requires thoughtful planning. The Chinese master of war, Sun Tzu, created the classic work "The Art of War", which contained the principles of a victorious strategy. In ancient Greece, the philosopher Socrates emphasized discussion and reflection as part of decision-making, and his students Plato and Aristotle extended the idea to society and politics.

Today, strategy is most often understood as a plan that aims to achieve desired goals and a broader goal (vision). Often this requires finding or building a competitive advantage, which is not easy in today's very fast changing environment. Plans alone are also not enough, but continuous action and the ability to adapt the plan if necessary, if situations change or the plan does not work, are needed. It is for these reasons that a good and modern company strategy enables success.

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About the history of business strategy and how it has developed

As already shown in the introduction, the history of strategy is in warfare. Business strategies, on the other hand, did not become significantly common until the 1960s.

Back in 1970, the prestigious business magazine Fortune wrote an article about Fred Borch, CEO of General Electric, the largest company in the world at the time, and his strategic plan seven (7) years earlier, which was locked in a drawer of the CEO's own desk. No one else had participated in the preparation of the plan in question, not even the top management team.

On the other hand, already in 2006, Elon Musk published Tesla's strategy at the time completely openly for all to see. At the moment, the company's strategy is typically somewhere in the middle of a completely encrypted and closed strategy, and a completely open strategy. It is almost certain, however, that GE's way of making and managing strategy in the 1960s and 1970s will hardly work as it is in the 2020s and beyond, but certain elements of it are not dead either. Next, let's look at different historical phases of strategy in companies.

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Strategy as a plan

In the 1960s and 1970s, timing from strategy to plan was emphasized. At the center of strategic planning are a formal and analytical process in which the organization's goals and choices are examined among key personnel, as well as the means by which the goals are achieved. In contrast to GE in the 1960s, today's organizations generally involve a wider group of organizational professionals in strategy work. There is still a need for strategic planning, and it has not completely disappeared, it has just changed its form.

Strategic management

From the end of the 1970s to the end of the 1990s, the era of strategic management was highlighted. In this era, the main focus shifted from strategy planning to its implementation. In the strategy work, this meant that an ever wider group of people were involved. By acting in this way, the aim was to ensure the organization's ability to change and learn.

Sayings from the golden age of strategic management have survived in business life and organizations, such as strategy implementation and implementation. According to the managers, these were, and maybe still are, the best ever, while according to our empirical experience – both as managers and consultants – few people want to be the target of implementation or implementation.

A good thing from the point of view of strategic management is that it recognizes the organization's people as assets and opens the opportunity for these organization's most important assets to participate in the formulation and implementation of the strategy. If the strategy is not implemented, the desired goals will not be achieved. Because of this, strategic management can still be found as a functional part of the management of organizations.

Open strategy

In terms of time, the most recent point of view is an open strategy, where the strategy is widely opened during the definition and implementation phase, both within one's own organization and with stakeholders. The core of an open strategy is continuous learning and adaptation. It emphasizes openness, interaction and flexibility in the organization's operations.

Almost every manager and organization wants us to have a success strategy that creates a competitive advantage and helps us reach our goals. Each success strategy is unique, but the following elements help build a successful strategy:

How to build a success strategy?

Almost every manager and organization wants us to have a success strategy that creates a competitive advantage and helps us reach our goals. Each success strategy is unique, but the following elements help build a successful strategy:

  1. Identify the operating environment and its effects on your organization
  2. Define an inspiring goal (vision and mission) together with the organization and key stakeholders
  3. Define clear measurable strategic goals, the achievement of which enables the realization of the vision and mission
  4. Make strategic choices - everything for everybody = nothing for nobody
  5. Define operational key metrics or results that allow you to see how the strategy is being implemented
  6. Clarify what to do, and what kind of leadership and culture strategy making requires in everyday life
  7. Use an external expert/facilitator - this often leads to better results!

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Summary

Strategy is a multifaceted subject area with very long traditions from antiquity to the present day. The most important thing when creating a strategy is to identify the organization's situation and what it wants to achieve. After this, a suitable approach to the strategy work itself and to the formulation of the strategy is chosen. Sometimes this work is done in companies themselves, but often an external partner is needed to help build a successful strategy.

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