On September 28, Professor Azi Gera, Ph.D., assistant professor of management at Drexel LeBow, discussed “Closing the Strategy Loop: A Roadmap for Developing and Implementing a Continuous Strategic Process” to the CFO Alliance’s Philadelphia Chapter.
Gera described a strategic process that incorporated the modules of setting mission and objectives, analyzing the external and internal environment, choosing how to compete, and implementing strategy. Approximately 50 percent of the attendees stated that their companies have a formal strategic planning process, while only 20 percent conduct it continuously.
As is typical in many organizations, implementation is more difficult than planning, especially when there is no ownership and accountability. Financial executives emphasized that if management does not understand the company’s strategy, how can they expect the general employee population to understand it.
However, some organizations mentioned that they are able to move closer to achieving alignment and accountability by tying employee compensation to key financial performance indicators. Implementation is also more attainable when companies focus on two to three key strategic initiatives each year that result from the annual strategic planning process.
Some attendees felt that uncertainty regarding health care and regulation is currently making the planning process more challenging. Other attendees mentioned that some professional service firms find it difficult to articulate and communicate their strategy and brand broadly because these firms essentially provide similar services to their competitors. However, the value is derived from the one-to-one relationship and reputation that the professional has with an individual client. Professor Gera then shared his current research about signaling and how companies can control their identity, image, and reputation.
Some attendees commented on the difficulty of planning a strategic change, especially when the current (and temporary) situation is positive, and how the firm’s mission can play a role in overcoming the hurdle of initiating change.
As companies implement their strategy, they consider the direct relationship between cost and control. Activities that are not core to an organization can be outsourced so companies can focus their investment and resources on keeping their core competencies internal. They also noted that once an outsourcing decision is made, it seems impossible to overturn it, even if the results are not as expected.
Attendees appreciated that Professor Gera provided a simple continuous strategic process that is practical and useful. He stated that this strategic process can be applied to many professional and personal decisions. Finally, the only way to achieve sustained competitive advantage is to continuously adapt the firm’s strategy using the strategic process.