Chapter 6: Business Strategy

Overview

Strategy has not had an easy time since the millennium. Squeezed by a combination of economic downturn and endemic scepticism about the visionary ideas of the e-business boom, most strategic planning departments - if they still exist - have retrenched. They have focused on the operational issues like how to yield bottom-line improvements in more acceptable timescales, and on the organizational changes often ignored by the high-flying strategy of convention. Now, with the global economy starting to pick up, managers are rightly asking: What role does strategy play in our organization? How can we ensure that the ideas we have on paper can be realized in practice?

The two cases in this chapter represent the full spectrum of responses to this question. At one end, we have Capgemini, assessing the strengths and weaknesses of the Duke of Edinburgh's International Award programme and developing suggestions for future direction. Hugely successful (more than 100 countries run Duke of Edinburgh award schemes), it was still important to ensure that the programme reflected the changing needs of young people. This was traditional strategy work at its best: a period of intensive data gathering by the consultants followed by client workshops aimed at brainstorming a new vision for the organization. At the other end of the scale, there is RightCoutts' work with the Harrogate Healthcare NHS Trust. Like public healthcare systems across the world, the Harrogate Trust found that it needed a more corporate style of management, something that was likely to have a profound impact on the culture of the organization as a whole. The appointment of a new chairman and chief executive, and the advent of a new executive team, provided the catalyst to improve the effectiveness with which administrators and clinicians worked together on strategic issues. This is strategy as cultural change in which data gathering cedes to appraisals of individual managers, and facilitation to mentoring.

It is significant that neither of these case studies comes from mainstream corporations. While commercial organizations batten down the strategic hatches, it is in the public and not-for-profit sectors that strategy is looking to prove itself again. Moreover, unlike most exercises to develop new strategies in the private sector, these initiatives were not taking place against a backdrop of declining performance: change, and the timing of change, was a matter of choice.

Taken together, the very different projects described here share three important lessons:

• Strategy cannot be developed by one part of an organization, or by one group of stakeholders, in isolation. At the Harrogate Trust, service delivery would not have been improved by a small team of administrators telling clinical staff what to do. Command-and-control management would also have failed the Duke of Edinburgh's International Award Association, membership of which is entirely voluntary. Effort had to be put into ensuring that all those likely to be affected by the strategies being developed would have the opportunity to contribute to them. The International Award Association canvassed the views of its national authorities and independent operators. Individual coaching sessions were held with all the directors of the Harrogate Trust, not just those who thought of themselves as ‘managers'. Similarly, the consulting teams had to work with their clients, learning from them, developing ideas in collaboration with them - a far cry from the hit-and-run strategy consulting clients have complained of in the past.

• A balance needs to be struck between inclusion and speed. Strategy (and strategy consulting) has moved a long way since the time when a strategic review took several months. Indeed, during the height of the e-business boom in 1998-99, afraid that competitors might overtake them, organizations went to the other extreme, formulating strategies in weeks, if not days. But compressed timescales had other flaws and often resulted in ill-considered plans that rarely returned a profit. The initiatives described here fall into the middle ground: small in scale and focused in intent, they were both completed in a short time, yet neither sacrificed the need to involve others.

• The means are as important as the end. The link between strategy and implementation has always been weak: mission statements that look good on posters fail to change behaviour; new business models prove unworkable in practice. It may be that, too often, we think about ‘a strategy' as an end in its own right. Perhaps clients and consultants have focused too much on the physical output - once the report has been written everyone sits back with relief, forgetting that is only the start of the process. In both the projects described here, the way that the strategy is developed is almost as important as the strategy itself. The process of formulating a strategy was used as an excuse to forge stronger links, between managers and clinicians at the Harrogate Trust, and between the International Award Association and its members.