Francois du Plessis, Johan Maritz and Dr Anton Verwey
For some years, inavit iQ have been using the Business Value Model (BVM) as one of the frameworks for engaging with client systems. The BVM utilises the following logic:
• The realisation of specific business benefits (such as operating profit, top-line revenue and market share);
• is dependent on the creation of customer delight (loyal and satisfied customers) which is a direct result of the delivery of value adding products / services;
• by high performing people;
• who work in a fit-for-purpose work environment (organisation capacity with respect to business process, organisation structure, human capital, information flow and technology);
• who are led and managed by capable, competent and credible leadership;
• towards a common goal and strategy; and
• that addresses the dynamics of the competitive landscape in an innovate manner that allows the business to compete in its external environment.
Although implied by the BVM, the latest version of the model explicitly includes two aspects, these being:
- Corporate Brand and Reputation; and
- Organisation Identity.
These two factors, and they are clearly interlinked, encourages and forces all organisations to be mindful of not only WHAT they do, but also HOW and for what PURPOSE. As stated in the first article distributed in 2019, the addition of a psycho-social perspective to the BVM makes it clear that PURPOSE particularly is related to the “WHY” of and for the individual. This “why” is not a simplistic “what is in it for me” but a deeply considered perspective on how the purpose of my life can be authentically lived within the enterprise. This is seldom a fixed point, as our personal purpose statements and ambitions change over time as we enter different phases of our lives, or as we are confronted by specific challenges.
Strategy is a set of decisions and actions aimed at gaining a sustainable competitive advantage. Strategy is the way in which a company orients itself towards the environment in which it operates. It is a plan an organisation formulates to gain a sustainable and unique value proposition and to deliver specific benefits to all key stakeholders. Enterprise strategy seeks to develop synergies by sharing and coordinating people and resources across business units, investing financial resources across business units, and using business units to complement other corporate business activities. Strategy answers the following questions:
- What are the sources of the company’s sustainable competitive advantage?
- How we will position itself against competition in the market over the long run to secure a sustainable competitive advantage?
- What are our key strategic priorities?
- What are our “non-negotiables”?
Enterprise strategy is an agreed-on guide to action that should lead business to performance and health in the marketplace by consistently delivering client / customer benefits.
The Simple Version
The strategy process as described above often play out in a fairly simple set of steps. These typically include:
- Strategic thinking, typically informed by some formal and informal processes such as attending conferences, participating in industry bodies, reading of business books, attending business school programs and so forth;
- Strategic planning, usually in the form of a facilitated strategy workshop with the outcome of a revised and documented strategic plan; and
- Strategy execution, usually in the form of agreed actions, KPI’s, project plans and so forth.
- Alignment more often than not then focuses on the rational or logical aspects of strategy execution.
See also the socio-technical elements explained in our first article for 2019 titled “The Business Value Model Revisited”
Strategy as a process like this can be useful under very specific circumstances, including when:
- Strategic choices can be an extrapolation of the past (doing more of the same);
- There is a team that have had sufficient time together so that there is an intuitive understanding (shared mindset) amongst team members; and
- There is a history of good enterprise performance.
It is our distinct sense, given also our engagement with clients and partners, that there are very few enterprises for whom the above conditions are true. For most enterprises and their executive teams that we engage with, the following are examples of what is top of mind in terms of strategy as process:
- dramatic changes to the external environment in terms of industry boundaries, social dynamics, legislative frameworks and so forth;
- leading to a quite dramatic change in required business- and operating models, technology, infrastructure and so forth;
- greater team diversity, also because of mergers / acquisitions; and
- different performance expectations of investors / shareholders.
It is within this context and keeping in mind the psycho-social dynamics of organisations, that we are of the view that strategy as process becomes much more complex (and “messy”).
The Complex Version
The more complex strategy process as described in the diagram include all of the elements of the simpler process described above, and then adds:
- Exploring the enterprise philosophy to really get to grips with what our strategic intent is, individually and collectively;
- Strategic thinking includes the exploration of individual and team psycho-social dynamics to create coherence prior to and in addition to creating alignment; and
- Strategic planning includes a mindful and real understanding of and commitment to personal roles in and contribution to the success of strategy.
We are of the view that these additional dynamics come into play because changes to strategy require specifically that there is sufficient BELIEF that the strategy is appropriate AND that there is CONFIDENCE that the strategy can in fact be achieved. Trust (in self and others) is a
function of both of these. As is shown in the diagram,
trust is also moderated by potential exposure (risk) .
The higher the risk to me, the business, clients, other stakeholders, the higher will be the requirement for both belief and confidence. “Risk” can be reputational, financial or other. The lower the risk, the more likely that we will “go along” as there is not anything of significance to lose. This decision may of course also be a function of the risk propensity / profile of the individual(s).
The way to reduce the perceived exposure is through building BOTH confidence and belief through:
Deliberately creating opportunities to collaborate (be inclusive);
Making peace with the reality that there is always some risk in business – be prepared to display confidence;
Focusing on creating success for the other, not only for yourself; and
Ensure there are “quick wins” even if they are “small” – It is the frequency of wins that establish a pattern, not the size of the wins.
- From a purely human perspective it may also be useful to keep the following in mind:
The other party is as anxious as you (perhaps even more so) – help them succeed;
- Focus on both process and outcome;
- The quality of relationships is mission critical to ensure sustainability of outcomes; and
- There will be stumbling along the way – how you deal with these is the real issue.
Some of our clients are either at the start of a more complex strategic journey or have made some significant progress already. We share these with you to illustrate how a very different philosophical approach to strategy plays out a practical level. Names of client companies will not be shared here.
|Market Segment||Supply Chain and Logistics|
|Assignment||Strategy Alignment, Implementation and Monitoring|
|Time Period||March to November 2018|
|Global Issues||New shipping technologies and integrated supply chain.|
|Industry Issues||There is oversupply of shipping capacity globally.|
|Enterprise Issues||Lack of sales growth and ability to generate EBIT as expected by shareholder.|
to be Realised
|To improve performance on strategic goals|
|Project Streams||Strategy||Unpack the given strategy to phases with clear milestones and deliverables|
|Organisation Architecture||Optimisation of organisation structure|
|Leadership and Culture||
|Project Deliverables||Strategy||Clearly defined strategic plan with companywide communication|
|Organisation Architecture||Appropriate organisation design and role descriptions|
|Leadership and Culture||Clearly defined values / behaviours and leadership signature|
|People Performance||Improved employee engagement|
|Customer Delight||Clearer understanding of market / customer segments and respective USP’s|
|Key Solution Elements||Strategy||
Series of two-day workshop to focus on:
|Leadership and Culture||
Outcome and Impact
|Business Benefits Realised||
About the Author(s)
Dr Anton Verwey is the Executive Chairman of the inavit iQ group of companies. He has experience in a wide range of industries in the fields of Business Strategy, Organisation and Work Architecture, Leadership Talent Development and Human Capital processes and systems. For the past two decades his focus has been primarily on leadership capacity building strategies. In this context, he has worked with organisations ranging from SMEs to listed companies, as well as some state-owned enterprises. He is the author and co-author of numerous books and articles and has supervised a number of masters and doctoral level studies.
About inavit iQ
inavit iQ (Pty) Ltd is a South African based international business consulting professional services firm. We have a formal presence in Gauteng, Western Cape, Mauritius and Europe.
We work in a range of industries and with companies of varying sizes and in various phases of their own growth cycle. Our collaboration with clients focuses on:
• Developing insight into their external context and competitive landscape;
• Strategy formulation and alignment;
• Leadership excellence and leadership-led business transformation;
• Organisation capacity including business and operating models, organisation, work, data and systems architecture;
• People performance, engagement and commitment; • Customer delight and brand reputation; and
• Decision-making dashboards and intelligence.