Are we flying or indefinitely grounded? This is probably the question that most organisations ask themselves when it comes to their sustainability and growth. The answer lies in the effectiveness of their organisational strategies. Are their strategies efficient, well planned, executed, monitored and evaluated enough to keep them flying? Or are they inefficient, poorly planned and poorly executed to a point that they clip the wings of the organisation? But what does it take to keep your organisation afloat? An efficient strategy - a strategy that encompasses a number of elements ~ an integrated strategy facilitation approach, a clear strategic plan, a clear and embedded plan of execution, constant evaluation and monitoring, as well as a turnaround strategy should the planned strategy go pear shaped.
Effectiveness of a Business Strategy
A recent report on ComAir stipulated that the organisation is on the brink of liquidation, the reasons cited being that the business rescue efforts have failed, meaning that the company can no longer be rescued, and all attempts to rescue it have been exhausted. So how did ComAir get to this point? Which strategy was employed by the organisation and how often was it evaluated and monitored? Equally important to ask, is whether the strategy that was in place was the right strategy. Various types of strategies can be employed by organisations to set the organisation up to grow and remain profitable.
Many organisation adopt one or more strategies to help them achieve their organisation's objectives. A clear strategic plan can help an organisation grow market share, increase profits, reduce operational costs, retain customers or streamline processes. Strategies are long term, hence before an organisation embarks on a specific strategy or strategies, it is important to understand what the strategic approach will mean for the organisation in the long run.
Types of Strategies
A structuralist strategy is often used by organisations as a means to understand current market trends and economic conditions. An organisation would typically spend time on researching current trends and economic conditions impacting the industry. In conducting this research, the organisation can put in place a plan that can distinguish them in the industry.
Organisations would pursue a differentiation strategy to offer unique products / services. Those organisations who adopt this strategy often charge more for their offering, in comparison to similar organisations with similar offerings. These organisations can thrive with this strategy due to the uniqueness, and most likely exceptional quality of their products / services.
A price-skimming strategy often applies in cases where an organisation is launching a new product / service. In this instance, the organisation places a high margin on their product / service in the beginning, but lower it over time. This strategy can help organisations generate more revenue from markets where there is a high demand, and also assist in quickly paying off the initial costs associated with the product / service.
Organisations adopt a growth strategy when they want to expand their scope. A growth strategy is beneficial in many ways, such as if the organisation wants to offer more products or services, increase their market share, add new operations. The success on any organisation's growth strategy depends on factors like the industry in which it operates, competition, the organisation's mission and ultimate vision.
Often organisations need to make radical changes in order to remain profitable and grow. A transformational strategy would be adopted in this case. A transformational business strategy can drastically change an organisation's operations, industry, business plans or long-term goals. As an example, some organisations may adopt a transformational strategy if they want to completely redefine their offering, including core elements such as pricing. Adopting a transformational strategy can also result in an organisation completely redefining it's target market.
A lot can be learnt from the ComAir story and other similar stories. Organisational leaders are often heard saying "We have a plan, let's work the plan", but the question is, "Are they working the right plan?" Have they adopted and initiated the correct strategy / strategies? How effective are these strategies? Are they adopted and well implemented? Are they aligned with the organisation's vision and mission? How often are they reviewed? And lastly, how confident are they in whether these strategies will help their organisations "fly"?