Much of the time, simple beats sophisticated (AKA complex) because simple processes can be implemented more quickly and successfully. Lou Gerstner (Harvard MBA 1965) adopted this concept with a streamlined, focused, and simple strategy development process. IBM’s transition from a hardware supplier to a services firm is unique in business; no other organization that large has changed its strategy that dramatically.
Brad Hall discussed IBM’s approach in an 8/30/12 article on thestreet.com, “Reinventing Your Strategy Development.”
After joining IBM, Gerstner asked division heads how they implemented strategic plans developed for IBM by top consulting firms. To summarize the answer: “We haven’t.” So he banned outside strategy firms in favor of an internal approach called the IBM Business Leadership Model (BLM). All IBM executives use this model so they have a common process.
Each business unit’s strategy is developed during a week long session referred to as the Strategic Leadership Forum (SLF). Each forum has 10-15 members from four to six business units which join together for presentations on topics such as strategy and market insight, then separate into individual business unit teams to work on their unique issues.
Each team meets one month prior to the session to define what information is needed for the session. With only one month to gather the data, the emphasis is obviously on using just key pieces of information, not doing a data dump.
The teams start on Sunday evening by defining the one most important performance gap. Gerstner believed that addressing multiple gaps could not be done quickly.
By Friday noon, the teams have completed the seven parts of the strategic plan and return to their business units ready to implement. Over time, all the critical performance gaps will be resolved either through revised strategic plans or by addressing the one most important issue.
Compared to IBM, how does your organization do strategic planning? You as a CI professional should be involved in it to provide market insight. You might even be in the strategic planning department and can suggest streamlining the process as IBM did to produce plans faster.
How do your competitors’ handle strategic planning? Do they follow the IBM model or are haphazard about strategy? Either way allows you to take advantage of an unexpected event if you can react faster than your competitor can.