Why is it that while all firms have strategies, some are more successful than others?
Certain firms do have a first-mover advantage in offering services and products to their customers and extracting value that competitors cannot. Others are able to reinvent themselves in a way that competitors are unable to match.
Whatever the approach taken, an important learning point for managers is that formulating or just having a strategy direction tends to be a relatively easy first step in terms of planning and commitment. It’s the execution stage, when a change in beliefs and behaviours is often required, that is the greatest challenge - requiring a strategic journey that adapts to a dynamic environment.
So, once you have your initial strategy for a new, innovative service or product and are ready to launch, what are the factors that could prevent it working?
1 Deep-rooted beliefs
Why should your innovative service or product be something your firm should commit to, or your customers be interested in?
This is a tough one to crack as deep-rooted beliefs about what makes a product or service work in a particular market can mean even your closest allies might need some convincing.
For example, in our research on IT firm Hewlett-Packard we found that CEOs tended to use past successes and the history of the firm to situate and build their storyboard, which could lead to missed opportunities.
One way forward is to consider where these beliefs come from; how they can be constructively challenged and what changing them would achieve. You should also consider how you engage and communicate the need to change these beliefs.
Customers and investors are also increasingly influenced by what they think you stand for, so an alignment of the company’s ethos with that of target capital and consumer markets is of growing importance.
2 Getting the right talent in place
When there is a new plan to execute most firms consider employing fresh talent, as well as reviewing existing staff to make sure they are up to the job.
This might involve bringing in new skills and leadership from outside or other parts of the firm, or upskilling employees.
You might find that you need to engage with consultants or bring in new tools to help find the talent pool you need. Staff are increasingly attracted by a corporation's vision rather than simply financial remuneration, which may require a broader positioning of the company. But this varies between and within countries, regions and demographics.
Also be mindful of just following the latest fads or fashions. The key challenge here is to customise these new ideas to make them work best for your own strategic needs.
3 Finding your digital pathway
Firms such as Facebook, Google, Amazon, Apple, Tesla, Netflix and Alibaba use digital technologies not only to innovate with new products and services, but also to pave new ways for new markets or digital platforms to be created.
In this space, it is important to set out a clear pathway about how you intend to use digital technologies – both to assist in supporting your products and services to reach your customers and also as a way to support your strategy.
Consider whether you have an overarching digital strategy in place that brings agility to your business model and helps enhance the ways you engage with your employees, stakeholders, suppliers and customers.
For example, could your suppliers hold some important piece of data or information that would help identify early signals of changes in your customers’ needs or a disruption that could have important implications for your offerings?
Setting a plan for the future is only the beginning of a strategic journey. The execution is an ongoing process that requires commitment, persistence, and constant readjustment.
It’s not a linear or calendar-driven process, but a dynamic, unfolding one involving multiple iterations and interactions with stakeholders within and outside the firm.
Learning to embrace this dynamism and fluidity in strategy creation and execution can help firms become better attuned not only to financial or market needs but also to wider, societal challenges.
Khanagha, S., Ansari, S., Paroutis, S. & Oviedo, L. (2020) Mutualism and the Dynamics of New Platform Creation: A Study of Cisco and Fog Computing. Strategic Management Journal.
Knight, E., Daymond, J. & Paroutis, S. (2020) Design-led Strategy: How to Bring Design Thinking into the Art of Strategic Management. California Management Review.
Paroutis, S., Mckeown, M. & Collinson, S. (2013) Building Castles from Sand: Unlocking CEO Mythopoetical Behaviour in Hewlett Packard from 1978 to 2005. Business History.
Sotirios Paroutis is Professor of Strategic Management and Head of the Strategy and International Business Group. He teaches on The Warwick Executive Diploma for Strategic Leadership.