Companies Are Rethinking Strategy-Development Approaches to Better Adapt to Today's Competitive Environment, Says Report by The Boston Consulting Group
Study Finds Companies Are Stretching Their Processes Along Three Dimensions to Generate More Timely Insights and to Foster Organization-Wide Preparedness and Agility
| Source: The Boston Consulting Group
PARIS--(Marketwire - October 29, 2008) - Executives -- unhappy with strategic-planning
processes that they feel have become ossified and bureaucratic -- are
reinventing the ways in which they develop strategies, according to a new
report by The Boston Consulting Group (BCG). The report, "Does Your
Strategy Need Stretching? Adapting Your Strategy-Development Approach to
Fit Today's Rapidly Changing Competitive Environment," is being released
today.
Based on interviews with nearly 100 executives at twenty leading companies
-- including Lafarge, ING Groep, Nokia, Shell, Toyota, and United Parcel
Service -- the report finds that organizations are stretching their
strategy-development approaches along three mutually reinforcing
dimensions:
-- Stretching their time horizons to give the short, medium, and long term
each its due
-- Stretching their thinking with new techniques that boost creativity and
insight
-- Stretching their engagement model to foster dialogue, capabilities, and
alignment across the organization
According to coauthor Nicolas Kachaner, a senior partner in BCG's Paris
office, "Faced with increasingly changeable markets, executives are not
abandoning strategy and long-term thinking. On the contrary, they are
embracing new strategy-development approaches that help them not only to
see new opportunities sooner but also to seize them more decisively."
Stretching Their Time Horizons
The report finds that more and more, companies are taking distinctly
different approaches to strategizing for the long, medium, and short terms.
When thinking long term (five or more years out), a broadly shared
strategic vision of possible "futures" and the company's ideal position in
each is the goal. In the medium term (three to five years out), the goal is
a business plan that describes the investments and moves required to
realize and create value from the strategic vision. And in the short term,
the objective is to ensure consistency and make smart tradeoffs between the
business plan and budgetary realities.
Stretching Their Thinking
BCG's study found that companies are expanding their thinking repertoires
in three different ways:
-- Investing in the art of questioning to foster discussion on the most
critical issues and to strengthen the organization's capacity for strategic
thinking
-- Multiplying perspectives on the company's situation to fight inertia and
groupthink
-- Building scenarios to prepare the organization to compete in any number
of plausible futures
Whether new methods are permanent additions or one-time experiments, the
goal is to shake things up lest routine become the enemy of creativity and
insight.
Stretching Their Engagement Model
The report also details ways in which companies are retooling their
strategy-development approaches to generate enthusiasm for, ownership of,
and alignment around a strategy. In so doing, the processes start to yield
not just good strategies but also good strategists. This engagement is
achieved by changing the tone from static presentation to freewheeling
dialogue, accelerating the rhythm with more frequent and focused
discussions of strategy, creating new forums for strategic debate, and
redefining the role of the corporate center as agenda setting, coaching,
and orchestration of the process.
According to coauthor Michael S. Deimler, a senior partner in BCG's Atlanta
office, and global leader of BCG's Strategy practice, "Stretching empowers
the organization to shape its destiny through shared strategic aspirations,
to enhance its preparedness and agility in turbulent times, and to foster
enthusiasm and engagement. While few companies are stretching on all three
dimensions today, all would benefit from reviewing and reinvigorating their
strategy-development approaches."
To receive a copy of the report or arrange an interview with one of the
authors, please contact Eric Gregoire at +1 617 850 3783 or
gregoire.eric@bcg.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm
and the world's leading advisor on business strategy. We partner with
clients in all sectors and regions to identify their highest-value
opportunities, address their most critical challenges, and transform their
businesses. Our customized approach combines deep insight into the dynamics
of companies and markets with close collaboration at all levels of the
client organization. This ensures that our clients achieve sustainable
competitive advantage, build more capable organizations, and secure lasting
results. Founded in 1963, BCG is a private company with 66 offices in 38
countries. For more information, please visit www.bcg.com.