MANY years ago, I attended my first strategy session as a key player in the process. I remember both the excitement and anxiety around the process.
Naturally brilliant plans were brought forward and the team responsible came up with a beautiful document. Generally, that is always the case though.
It is fairly easy to come up with a brilliant strategy document, but implementation is a whole different ball game. There are numerous reasons why a good number of strategies are not followed and do not produce the desired results.
For the record, the strategy document I mentioned earlier was for the most part well implemented. The team responsible was really good, but it is also important to note that the environment was a lot different from what we are currently experiencing. The volatility we are going through is what has inspired this article.
Why strategising is important
I will stay clear of what most authors would cite as the reasons and just summarise by saying this is the process by which the entire organisation’s resources including manpower are directed towards a common goal.
It is definitely a recipe for success, if all efforts can be channelled to a common goal. The key actions, tasks and outputs are clearly spelt out together with timing, costs and other metrics.
In brief, therefore, the work being put into an organisation will be focussed and should in theory serve to drive the organisation forward.
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Frequency of strategy sessions
Detailed strategy sessions are for most organisations carried out after three to five years. Oftentimes these detailed sessions will include a good number of the staff in an organisation.
The size of the team that should form part of the strategy session can be divisive. I am a believer and proponent of the inclusion of as many people as is reasonable. This will have the benefit of ensuring that there is ownership and buy-in of the strategy at all levels.
It does, however create a headache in terms of managing a larger group as that might end up costing in terms of productivity of the sessions, but I still insist that the trade-off is worthwhile, as long as the benefit is buy-in at all levels. The added benefit is the views and innovation from the actual implementers.
Coming back to the frequency of the sessions to formulate the strategy, as above, I have already mentioned that most organisations look at between three and five years.
It is also ideal to come up with a budget that ties into and supports the strategy. This is especially if an entity makes use of the zero-based-budget method, wherein a budget is essentially started from scratch and built up as informed by the actions or activities planned.
In this current environment, a period of one year is quite long, let alone three or five years. We have both international and local factors that will have a bearing on the assumptions and plans that make up an organisation’s strategy.
“Culture eats strategy for breakfast”
Before we look at the volatility aspects, which are what this article is supposed to focus on, I want to explore one key reason why I think some of the wonderful plans do not translate into the expected results.
I will pick just one as this sub-topic needs a whole thesis to dissect fully. The famous statement by the legendary Peter Drucker, “Culture eats strategy for breakfast” captures everything I want to highlight. My understanding of this statement is that no matter how good a plan is, it will be up to the implementers to determine whether or not the plans remain just that, or measurable positive output is produced.
Volatility or stability will be of no major consequence if the culture is not aligned. I shall not expand this further but come back to the subject matter.
Volatile times
The acronym VUCA (volatility, uncertainty, complexity, and ambiguity) has been around for a while now and is thrown around a lot when plans are being drawn up. Some variants now include an “H’ for hostile.
The “V” stands for volatility so in theory it has been acknowledged that despite uncertainty, complexity and ambiguity, the world is very much volatile.
This should have also meant that there is no need to go to length discussing the volatility because it is not news to anyone. However, looking at the world today, from the Russia-Ukraine conflict to the local challenges the volatility is at a different level. Plans can be rendered useless very quickly and one must just swiftly re-position.
Locally we are going through a lot of changes due to the currency challenges. The dollarisation versus de-dollarisation debate is one of the key concerns resulting in a lot of frequent change.
I will for example pick on the ban on lending and subsequent impact to so many plans. Fortunately, as was advised it was temporary and that turned out to be the case.
Agility then becomes very key for a business’s key advisor, the finance professional sitting a chief finance officer (CFO) or equivalent. This role has never been more critical in my view, as it is now.
Responding to change is now very much part of the job description of the CFO and they are one best trained to handle it, assuming they are a professional accountant belonging to an accounting body, of course.
Global pressures also have a bearing on the plans drawn up by an entity and thus the strategy document may not make sense after a rather short period of time in comparison to the three to five years for which the plans would have been expected to last.
Periodic reviews and agility
The review of strategy documents needs to be frequent. The ideal would be as frequently as fundamental changes occur in the operating environment but that could be somewhat impractical.
I cannot suggest having a detailed strategy session every month. The strategy document therefore must be a live document that is constantly updated.
This should in theory mean at the end of a five year cycle, for example, the revised document would be very much different from the original, particularly in terms of the actions and activities. The core objective would likely be one of the few constants in the strategy document.
Other elements of leadership, such as, communication will then come to the fore as the organisation responds to the external triggers.
The team should thus be fully informed of the implications of environmental factors and how that will affect their work, their earnings, the company’s strategy, the future and so on.
Just to expand on the requirement to be agile, it is pertinent that responses to changes are made swiftly. An example is that having a board resolution done in a WhatsApp group might have seemed unreasonable a few years ago, but given how quickly things change this might actually be ideal.
Governance should, however, never be overlooked and formal ratification processes will need to be done to ensure all is above board.
Some windows to defend against a change or to profit from the opportunity are open for very brief periods hence the need to move quickly. The volatility in the current global and local environment demands swift responses.
Conclusion
To wrap up, I will point out the need to have a robust strategy understood and supported by all. The strategy should be followed, and the document should also be live and continuously updated with an agile member of the executive leading the process.
I would nominate the CFO or equivalent, not just because this is my profession, but because if that person belongs to Professional Accountancy Organisation (PAO) they will have support structures to help them navigate the changes.
- Mavengere is the technical director at the Institute of Chartered Accountants of Zimbabwe (Icaz), which is the largest and longest standing PAO in Zimbabwe, having been established on January 11, 1918, and is a body corporate incorporated under the Chartered Accountants Act [Chapter 27:02]. Icaz provides leadership on the development, promotion, and improvement of the accountancy profession focusing in the areas of accounting education, assurance, good governance practices and leadership and organizational excellence. — [email protected] or twitter: @OwenMavengere.
