Understand Where You Start From
Most strategy development is fundamentally fairly simple. Whether you develop a strategy for a multi-national company or for going to buy something at the corner store, you will follow more or less the same basic steps.
First, you must begin by getting as clear an understanding of your current situation. This will involve what is referred to as an “internal analysis” and an “external” assessment. An outcome of this step often takes the form of a S.W.O.T. analysis (Strengths, Weaknesses, Opportunity and Threats). From this, you will identify a problem that must be solved.
Second, you need to get some sort of an idea of the destination that you want or must reach. This is where you establish vision, mission, goals and objectives, for long, medium and short term.
Third, you will develop a strategy and a plan of action.
And finally, you will establish a certain evaluation mechanism, which will allow you to know if you are achieving your goals at different milestones.
I remember vaguely a business statistics course where the teacher demonstrated to us how we can calculate the cost of pure and perfect information. Today, I could not remember any of the intricate calculations presented by the professor. However, I remember understanding a very important fact brought about by this demonstration: in most business contexts as in life, pure and perfect information does not exist. And if it does, it comes at a cost so high that its actual worth is pointless.
Many people often fall in a paradigm called analysis paralysis, in which they spend so much time analysing a particular situation or opportunity that by the time they are through their evaluation, is they ever do, the opportunity has lost its value. They have missed the boat.
I particularly appreciate the strategic planning model used in business because it is simple and efficient.
Most strategy development is fundamentally fairly simple. Whether you develop a strategy for a multi-national company or for going to buy something at the corner store, you will follow more or less the same basic steps.
First, you must begin by getting as clear an understanding of your current situation. This will involve what is referred to as an “internal analysis” and an “external” assessment. An outcome of this step often takes the form of a S.W.O.T. analysis (Strengths, Weaknesses, Opportunity and Threats). From this, you will identify a problem that must be solved.
Second, you need to get some sort of an idea of the destination that you want or must reach. This is where you establish vision, mission, goals and objectives, for long, medium and short term.
Third, you will develop a strategy and a plan of action.
And finally, you will establish a certain evaluation mechanism, which will allow you to know if you are achieving your goals at different milestones.
I remember vaguely a business statistics course where the teacher demonstrated to us how we can calculate the cost of pure and perfect information. Today, I could not remember any of the intricate calculations presented by the professor. However, I remember understanding a very important fact brought about by this demonstration: in most business contexts as in life, pure and perfect information does not exist. And if it does, it comes at a cost so high that its actual worth is pointless.
Many people often fall in a paradigm called analysis paralysis, in which they spend so much time analysing a particular situation or opportunity that by the time they are through their evaluation, is they ever do, the opportunity has lost its value. They have missed the boat.
I particularly appreciate the strategic planning model used in business because it is simple and efficient.
posted by GRK at 9:42 p.m.
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