Strategy Process

Excerpts from the article "Managing the Strategy Journey" published July 2012 in McKinsey Quarterly.   The authors are Chris Bradley, Lowell Bryan, and Sven Smit.

• “We have continued to evolve our thinking about how companies should undertake strategy development in the 21st century.”
• “The big difference between the journey model and the others (e.g., annual strategic planning) is that when a company isn’t making sufficient progress, it doesn’t pretend that things are fine.”
• “. . . We uncovered strong evidence that a great many companies are generating strategies that, by their own admission, are substandard.”
• The evidence”raised additional questions about the the effectiveness of companies’ annual planning processes . . .”

Top leadership teams need to “increase the time they spend on strategy together to at least match the time they spend together on operating issues.  Our experience suggests this probably means meeting two to four hours, weekly or every two weeks, throughout the year.”

• “Changing the strategy of a large bank, or any large company for that matter, is a bit like turning a supertanker.   The momentum of the institution is so strong that the ability to change direction quickly  is limited.”
• “The bank’s (large bank used as example) ability to manage uncertainty…”is a work in progress, as is the case in many firms.”

“At the end of the day, strategy is about the actions you take.  Therefore, one of the highest priorities of a top-management strategy forum is to ensure disciplined implementation of key strategic initiatives.”

“In our experience, the key is to take a disciplined approach to converting strategies into actions that can be incorporated in financial plans and operating budgets.   ….one important capability that companies must develop to do this well is rolling forecasting and budgeting, so that needed investments can be made in a timely manner rather than waiting for the next annual planning cycle.”

“When executives have worthy ideas lack the budgets to pursue them with a sufficient full-time staff, we’ve found that it’s valuable to fund their exploration with a small “pot” of corporate side capital….”

In 2009, as senior-management teams across the world were just beginning to emerge from the bunkers to which they’d retreated during the peak of the financial crisis, we wrote an article whose premise was that pervasive, ongoing uncertainty meant companies needed to get their senior-leadership teams working together in a fundamentally different way. At the time, many companies were undertaking experiments, such as shortening their financial-planning cycles or dropping the pretense that they could make...

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