At Profitable Growth Partners, we work with a lot of businesses in different stages of their life cycles. Often we talk with our clients about the current momentum of their organization; positive, negative, or non-existent. In his best selling book, Good to Great, author Jim Collins talks about “the flywheel effect.” The illustration is that of an enormous flywheel mounted horizontally on an axle. Initially it takes great and sustained effort to just get the flywheel moving. However, over time it becomes easier and easier to keep the flywheel spinning as it is carried mostly by its own momentum. A company’s real breakthroughs come when the heavy weight of the flywheel does most of the work for them, with what the author calls an “unstoppable force.”
Building “unstoppable” momentum takes not only effort, but sustained, consistent effort. Strategy plays a key role in keeping your efforts sustained and consistent over time. Rather than push the flywheel clockwise this quarter, and then attempt to move it counter-clockwise next quarter, a company needs to stick to a well thought out strategy over the long haul. After all, a strategy is as much about what an organization is NOT going to do, as about what it WILL do.
Executing a well designed strategy builds momentum over time, infusing the organization with purpose and power.
Monday, November 06, 2006
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4 comments:
As a small business, we have tried developing strategy in the past. Unfortunately we always seem to get caught up in the daily demands, and we lose focus on the strategy that we developed. Is strategy even relevent in a world that changes so fast?
Kerry, Muskegon Michigan
Kerry,
Many people question whether strategy is relevant. During the boom of the dot-coms, much of the business community seemed to be willing to give up on strategy because it was too slow and we all were moving at "internet speed." At Profitable Growth Partners, our experience is that strategy is still critical to the long term sucess of most companies. But, strategy does not mean a 500 page rigid and detailed plan that sits in a three-ring notebook on everyone's shelf. Good strategy is concise, and flexible, and well communicated. Good strategy addresses key factors in the external environment, in the culture and structure and systems of the organization. It sets a framework for the tactics and projects within an organization. And above all, it focuses and aligns the resources of the organization.
What does a strategy look like once it is developed? Is it a written document? Is it 2 pages or 200?
Kevin
Kevin,
The form and size is really not important. The process of developing strategy often dictates the form of the final plan. At Profitable Growth Partners, we facilitate a process with the folloing steps:
- Analyze the Business Environment
- Forecast the Future
- Create a Core Ideology
- Define Your Strategic Direction
- Define Your Competitive Advantage
- Set Goals
- Create a Master Plan
The results of this process is generally 50 pages or more, however we work with clients to create a 3-5 page summary that can be shared with all employees in the organization.
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