Strategy: formulated then implemented or vice versa?
In a recent Linkedin discussion I provided a response to Zulfiqar Deo, a start up mentor and MBA student, regards the difference between strategy (planning, implementation, performance) for an SME or Start-up organization compared to a larger enterprise or government.
In his thesis there was a statement that caught my attention:
"Another issue influencing the study of strategy implementation is the perspective one has on strategy. Is strategy first formulated and then implemented, or vice versa?
My position is that for an SME or start-up company strategy is first implemented and then rationalized and improved where as for an enterprise or government department it is the exact opposite, strategy is first formulated and then implemented.
Having been involved in a number of emerging growth (SME) and start-up companies it is interesting to consider how people end up determining that they need to have a strategy.
In example, most companies start purely on the basis of an idea for a product or a service and then if they aren't afraid they build that product or start that service and then if they have enough fortitude they stick with it until either they or someone comes along and says "hey that is a really good idea you should really try and grow that into a major business".
It is of course at this point that most (but not all) companies start both thinking about and trying to implement a "strategic" plan, which of course is usually different than the plan that they are already implementing, which was 'had an idea, built a product and tried to sell it to people to pay the bills'.
The frustration comes when these companies have to start writing things down (see friendly facilitator standing at white board asking you all kinds of penetratig questions) and proving or disproving things because that is not typically what got them to this point, in most cases it was a combination of gut feel, hard work and a lot of luck and this of course is not part of the usual strategic plan.
The change in perspective can be very challenging for these smaller companies because they are essentially being asked to challenge their ideas, ideas which up until that time have been giving them reasonably positive and sometimes accidentally positive results.
Of course this is the polar opposite for an enterprise or government department as they are much older organizations and they have many more people and resources in play, which means they are often quite good at proving and disproving things that will work for their organization. They are also by nature plan oriented; they are risk adverse and position protective so you won't find to many rebels that rely on gut feel and luck to ensure that they still get that paycheck at the end of each week.
The biggest challenge of the enterprise or government organization is that of quickly taking action simply because planning and discussion take up such a big part of the overal strategic planning process. Of course once the planning is done they do tend to have the skilled people and resources (read money) to implement plans.
In the end the typical SME or start-up company is pretty good at taking action because that is their nature where as the larger enterprises are not so good at taking action (new action that is) quickly. For both of these groups they need to borrow from eachother, the SME should learn to plan or bring in facilitators to help them and the enterprise should look for rebels in the organization to drive new strategy.
Ed Loessi
