Why Companies are struggling ?
Two major issues that organizations are confronting in the third millennium are:
1) Defining right strategies to win the market
2) Challenging in implementing the strategies effectively.
In recent years, companies are facing tough competition. Organization old practices were working before but now its’ failing or losing its effectiveness. Newcomers are coming up with new ideas or products and mimicking what the other successful organizations are doing. In such era, majority BIG organizations are struggling in defining right strategies for their business. Organizations are not clear where to compete? What products or services to develop? Whom to partner with? How to differentiate their products and services? Where to invest? Managers are either busy following the historical best practices or working for operational excellence. Organizations success score card is either company’s stock price or short-term revenue growth. Without a long term focus and innovation, companies are losing their competitive advantage, for example: Blockbuster, Border, and Kmart. These Organizations were very successful in their market segments for 20 years ago, but now lack of good strategies they lost their completive position in the market against their competitors: Netflix and Amazon.
Strategy Implementation is also crucial, because having a good strategy does not mean the organization would win the market. Managers need to define a clear plan for strategy to address: how to implement strategies, who should be involved in the process, where to compete, what resources need to be utilized, when to make necessary adjustments in the execution steps (tactics) to focus on a long term strategy, who are the decision makers, how to keep everyone up to speed. Even after implementing successful strategies, it is very important for organization to remain competitive in the global market and gain sustainable 2 advantage for a long term. Good strategies with bad implementation would add zero value. Example: Microsoft took a long time to define their strategy for the mobile computing devices, and even after defining the good strategies. Microsoft could not execute the implementation steps effectively, and they lost their competitive position against their competitors: Apple and Samsung. There are many reasons why strategy fails: 1) Organizations are focusing on too many things at once 2) Top management does not support the strategy. 3) Ineffective leadership 4) Organization resistance for change 5) following rigid action plan without considering the market data.
Finally, strategy means doing things differently and better than competitors. Organization should define good strategies, which align to organization’s long term vision. Instead of just focusing on operational excellence, organization should focus on innovation, and finding new ways to differentiate themselves from others. Define set of unique activities in the process which makes harder for competitors to mimic. After successful implementation of strategy, organization should define strategy governance team, who constantly makes necessary adjustments in the strategy plan by comparing current market data, and competitors’ actions to maintain the sustainable growth for a long period.
