Restructuring Dilemmas Reflect Confusion in Strategic Planning
Peters, Tom, THE JOURNAL RECORD
The restructuring that is besetting every nook and cranny of the business world demands sound ``strategic thinking'' as never before. Yet most companies appear to be floundering, selling off odd bits of their portfolios and slashing payroll; in the end, however, they remain directionless.
The crux of those firms' problem is, indeed, associated with strategic thinking - but in a way that is not obvious. In short, we have confused what is strategic with what is tactical, in most corporate functions:
- Marketing. The essence of traditional strategy in marketing is the selection of growth markets, the rejection of dead-end markets and the conception of clever segmentation schemes.
Yet these concerns ignore the most important strategic marketing issues, which I contend are the achievement of superior quality (as perceived by the customer), the attainment of enough corporate flexibility to permit lightning-fast market creation as soon as the slightest opportunity is sensed, the capacity to listen constantly to customers and the constant improvement of every product and procedure that involves the customer - including ordering, billing and concern with supplier quality.
The execution of any strategic theme depends upon my above list of corporate capacities. The chief's true strategic responsibility involves investing in and developing such capacities, while the selection of markets and the like are the secondary, or tactical, responsibilities.
- Innovation. Its strategic component, greatly analogous to marketing, historically has been the selection of major technologies to explore and the setting of research and development budgets, for instance.
Or is it? I propose that the truly strategic innovation issues include: overcoming fear of failure that inhibits each person's willingness to try new things - from the accounting department to the design activity; and top management's commitment to somewhat ``crazy'' new product or service champions, who are so essential to any project's success. Once more, the latter sorts of factors deal with the capacity to innovate, and are the strategic essence of innovation.
- Operations. The same confusion reigns here. The traditional strategic approach involves big decisions about capital investment allocation - e.g. how big a plant expansion or new computer system? The traditional tactical issue is how to train and organize people to support new systems.
Again, what is thought strategic should be considered tactical, and vice versa. The strategic objectives - flexibility, speed of response, efficiency and quality from factories/operation centers - are determined principally by people's commitment, energy and organization. …