Strategy vs tactics

February 1, 2015

In recent years I’ve noticed an emphasis on operational excellence. Maybe it’s just my exposure to the not-for-profit sector or a decade working with small to medium sized businesses? Or maybe it’s a newish focus across organisations. Whatever the case, I’m not convinced it’s the right focus. As much as I believe operational processes must be seamless and efficient, I’ve found time and again that the most successful organisations are those that embrace strategy – and I’m talking not only about financial success but also about brand reputation, staff morale and retention, innovation and ability to change. Embracing strategy requires looking outwards. Operational excellence is all about gazing inwards.

 

In the nineties and naughties a popular approach was incrementalism. Slow and steady were key themes. Hugely complex econometric modelling flourished, giant companies were lauded, bureaucracy triumphed, data became king and loyalty program experts like UK retail giants started popping up on the speaker circuit. Some organisations got lost in the data. Some grew beyond their expertise into new products, new markets or new customers. Some were plagued by staff problems. Some spent unwisely in infrastructure or information technology. Some lost touch with their customers. Some just administered the business.

 

In recent times firms like these, though, that had an inability to balance risk management with vision have tended to stumble through sheer inertia. And, at the same time, we’ve started to see a new breed of innovators successfully commercialise their ideas. I’m not sure if it was the global financial crisis shaking up business as usual, a different generation of leaders, technology advances or other factors, but somewhere along the way things shifted and we’ve seen a number of success stories taking very different paths in the last few years – technology start ups, social enterprises and nimble not-for-profits amongst the mix. What distinguishes these organisations is a lack of fear of change and perhaps, on the flipside, a fear of ordinariness and of following the tried and tested rules. What is common amongst these organisations is a unique vision and a consistently strategic approach.

 

Certainly these organisations need to have stellar operations. Would you trust Paypal if it didn’t have security and privacy measures in place?  Would you buy Nudie if you tasted one that was clearly off? Would you reuse Uber if your driver was rude, the car smelt or the trip took 15 minutes longer than normal? I believe that stellar operations are a requirement, like a threshold, but that efficient, seamless, cost effective operations are not enough.

 

In my mind, a customer insight led strategy is what brings results and sets these success stories apart from the thousands of organisations that either just scrape by or the ones that flounder and die. These three examples are of firms that have fairly recently intruded loudly into large, competitive, stagnant marketplaces with high barriers to entry, transformed the sector and reaped the benefits. These are not companies that tiptoe around the edges politely – or ones that tinker away on a business that’s been done in that same way many times before. They are firms that have identified a customer need, developed a vision, harnessed appropriate resources in terms of people, technology and funds (not too little, not too much, just right, like the story of the three bears), and then seamlessly implemented.

 

The speed of scaled innovation still surprises me though and it is wonderful to be part of a global society that welcomes new ideas. Amazon.com launched two decades ago, Virgin Australia 15 years ago, GoGet and Facebook a decade ago, the iphone seven years ago, PayPal five years ago, Uber four years ago and Stan a month ago. Although relatively recent, these firms have changed how their sector operates and some of us can’t imagine life without these businesses. There are thousands of small players without these huge footprints who have similarly taken a different approach than the norm such as some social enterprises that make a real difference to their communities.

 

I am enjoying Ten’s new series, Shark Tank, which celebrates smart entrepreneurship. Having worked with numerous entrepreneurs and participated over the last decade in many seminars about innovation, often featuring remarkable entrepreneurs across a variety of sectors, it is nice to see a stage for putting start ups in front of successful entrepreneurs, matching investment funds and skill gaps, showcasing the value of innovation to the broad public and allowing Jo Public the opportunity to appreciate some new business ideas and the blood, sweat and tears behind those fledgling organisations, even if just vicariously for a few minutes from the comfort of their living room.  

 

So, while slow and steady might have won the race in earlier times, fast and wiry with a well thought out customer insights led strategy and an unmatched determination seems to be the flavour of current times.

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