I'm Rick Edmunds, I'm partner a with strategy and PWC. I've spent 25 years in strategy consulting starting as a partner at McKenzie for a long time and having moved to lead the healthcare group at Buson Hamilton which is now evolved into strategy and is part of PWC. And I work a lot with senior executives around their corporate and business unit strategies. I work with clients on a broad range of topics. One of the most common that we see is well companies say they have a stated strategy. They often they actually feel uncomfortable with their strategy really surpass this as it needs to be or the rest clinging to the results they are expecting. So, often we brought in as initial discussion and potentially from the work to help them really think through their strategy. And specifically, what are the trade-offs they have to be thinking about in terms of delivering better performance overall both in terms of consistency with where the market's going. And frankly, leveraging what is strong about their company that allows them to differentiate themselves. There's a number of statistics out there, but over 70% of executives really don't have confidence in their strategy, even if it's stated. So, very often it's about, actually reformulating a strategy as opposed to starting to. So, why aren't executives as comfortable you would think? It's a number of reasons actually. First is the world is changing much more quickly now than it ever has in the past, which I think everyone recognizes. So therefore, there's a constant angst of is our strategy still going to be relevant given where the market's going? Given what our customer needs are and how they're changing? Given how technology's changing? So, there's a constant angst I think they feel, clients feel, about is the strategy going to be sufficient going forward as things evolve? I think second, is often strategy is developed without really a hard view on trade offs. On things that people will do less of, because they're going to focus more on certain areas. Too often strategy is something that, it becomes a common denominator of what a senior executive group likes. And that, by the end of that situation of development feels insufficient actually to provide its enough direction. So, they like the statement on paper but they don't necessarily have the confidence, is going to lead to better results. Despite the fact that some of the executives are uncomfortable with their strategy they're also hesitant to say we need to redo a strategy because it is something's meant to be lasting. So, one of the first things we find working with the client you need to do is actually help them articulate why they are uncomfortable with their strategy long before you start with, so what do we need to do? That does, somewhat come into play by looking at the market trends and asking how is your strategy prepared to address how the market's changing? It does engender the need to ask questions about, how is your company operating differently as a result of this strategy and is that really leading to the result that you would expect? So, you actually need to help a company and the executives in that company understand and be able to articulate why they are uncomfortable with that strategy rather than a general angst. The second stage we find is very much around forcing trade offs. Eventually, you're going to get back to a point of consensus and synthesis. But, as a starting point, getting an executive to say, these are the things I believe we should be doing, where we should be focusing, and these are the places where I don't think we should be doing something and focusing becomes very important. because when you go around the table, you actually find different people have different views on that. And until you force those trade offs and get cross-section executives to realize they're not in the same place despite what they feel like they were maybe going in, it's almost impossible to then bring them back together. So frankly, those steps are the most important steps because until there's a recognition of a real need for change, and in fact, there's not an alignment on what that answer is, all the rush of the work around actually developing a strategy becomes meanings. There are probably as many different ways to develop strategy as there are consulting firms and business schools and a like out there, tons of different frameworks. I think the way we found most powerful in our work with clients is first, is an understanding of where the market is but also where it's headed and how fast is it headed there. So, definitely looking at trends in the marketplace and potential big disruptions in the marketplace. So, before you even get to the question of what are the implications for us, you've got a context where there's alignment on what are going to be some of the keys in terms of the changing conditions? Too often companies stop there and say, and therefore are strategy should be focusing on these great new areas. In fact, we don't think that is the most important, that's actually less than half the equation. So, the second part of what we do is to say, what is it about the company today that is unique? What are the few capabilities that a company has that distinguishes it from other similar companies that they can build on to say we are going to continue to outperform because we are better at these things. And it’s putting those two parts together, where’s the market and where’s it headed and what’s attractive in that market. What’s great about the company, what are the few capabilities the company has that are distinguished from its competitors. And say where's the sweet spot of where those two come together. What therefore needs to be built more fully to realize that and that's where actually the strategy is. It's the intersection of what a company does great and continue to build to do great with, where our market's headed and therefore what's going to be valued. So, what are a few things that we've learned along the way about, how to make sure that a strategy is going to be successful versus those that may not be? So, a couple of the typical problems you run into developing a strategy that doesn't realize its potential. I think one of the most traditional ones is, it's a great academic exercise, it looks great on paper. It doesn't really change what happens within a company, at least not sufficiently to deliver on the promise of a strategy. I think second potential challenge is people can't articulate the implications on the strategy. They can't articulate how about to translate to this company being different than another company it's competing with. So, the strategy starts to sound pretty similar across different companies and yet not all companies can succeed using the same strategy. So, a couple things I think we find helpful to do, that anyone who's engaging in strategy consulting should think about. First, is it's actually very helpful to go outside in first. So, can you articulate across a series of companies in an industry? How were their strategies the same and how were they different. So, before you even get into changing an individual company strategy, can you articulate what's common and what's different across the different companies? It's a harder exercise, I think than many people realize, but you get a sharper view on the differences than if you just start with a company's own strategy. I'd say is first. The second I'd say is, as you articulate a strategy or start thinking about the options for a strategy. Can you at the same breath say, and how would this mean the company has to likely operate different? Where do they need to invest differently than they do today? Where do they need to operate differently in terms of their management team? Where do they think about getting out of markets or products or services because they need to invest more heavily in other products, services or markets? So, a strategy is not complete until you get in the same breath, so to speak, go through that full exercise of what's the strategy and what are the implications for how the company needs to be different than it is today. And I think those are the two things that if you get focused, in terms of being able to do that in one fell swoop. How does this really differ from other companies? And how does this translate how the company needs to operate differently? You've got a pretty good sense about something that's going to work. One of the questions we get asked recently often is, how do you think differently about a fundamental change to a company strategy versus what is a typically annual process around strategic planning? And it's a really interesting question because, in some cases a company has an overall strategy and they go to a strategic planning process. Looking at their annual and maybe multi year approaches to that strategy and how it tweaks. Usually, you don't see a fundamental change in strategy unless there's a change in leadership, and when you think about it, that's pretty ironic, in that it takes a change in leadership for a company to completely rethink its strategy. So, one of the first things we do, as we talked about in terms of a company's not confident with its strategy is to really try to tease apart, do you need a tweaking? Do you need a refinement to that strategy, or is this a transformational thing? Does the disruption happen in the marketplace and, or your company is losing its competitive edge that requires something more fundamental. Too often, companies rely on the root processes they go through rather than they ask themselves the question, when do we need to go down. Now, one path around a transformative strategy versus when can we go down a normal annual planning process that leads more to adjustments or tweaking or refinements to a strategy. And that's actually an important question to ask a client right up front is, how do you really want to think about this? And are you ready to think about a transformational strategy? Or in fact, you actually have a process. You feel confident in your overall strategy, and you really know about how to get it stronger. So, with all the different strategic tools out there to be used, how do you make sure you don't just go through a process to develop a strategy on the back end, versus you really are thinking fundamentally about what's going to be successful. Which is a really important question to consider, because frankly, there are a lot of tools that can be very successful in helping a company think about strategic choices and the trade offs, and therefore the resulting strategy of the company. It's almost as important to recognize that there is no single tool or process. And in fact, one of the best tool of processes in the world maybe good for a while but you're almost beneficial by changing it up, and taking a different line to look at the company strategy. Because if you go through a road process and you fill in those component points and you get an answer on the back end, that's great. But frankly, that falls into a real process at companies over time, and they actually don't make fundamental rethinks about where's the world really changed, in a way that I've gotta take a different angle on what that strategy should be. So actually, different approaches to strategy at different times can often lead to that recognition that there may be something more fundamental that needs to be looked at in their strategy. So, I'd almost recommend any strategic planning group, actually change that's processed periodically just to get out of that status quo approach to strategy development that leads to incrementalism rather than fundamental looks at its positioning.
