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CEO Perspective

By Sue Chapman

Strategic thinking

Strategy, according to William Rothschild, has four key elements.

I was reflecting on our plan recently and decided to go back to some basic ideas about strategy and what it actually means as part of my review of the plan. I’d like to share with you some of the ideas contained in a book called A Guide to Strategic Thinking and Decision Making by William Rothschild. NCSI used his model as a way of starting on the strategic planning journey.

Rothschild says that a strategy “has four key elements. It describes where the organisation plans to focus and allocate its scarce resources (investment strategy)…it specifies how the organisation will distinguish itself from its competitors now and in the future, …it highlights the key actions that will be required to implement the strategy.. and the results that are expected in terms of financial and market results”. NCSI found the discussion and research around how best to use scarce resources, one of the most confronting parts of the exercise as really hard decisions needed to be made and it involved people.

“Strategic thinking requires taking the business apart, collecting intelligence, analysing, synthesising, setting priorities and then putting it all back together again….the entire process of strategic thinking and decision making is aimed at helping you answer the question of what your organisation can and should become”. This led to some really interesting discussion as it became clear that the vision that I held for the company was not necessarily understood or accepted across the board and we needed to spend time in encouraging the staff to think big about what was possible. In fact, it may be that even our clients will be surprised to see what we now think is possible for NCSI!

One of the chapters in the book is called Looking backward with one eye on the future, this is an important part of the strategic thinking process. It helps you to separate the achievable from ‘the impossible dream”. Organisations are rarely able to change quickly and do things that they have never done before (without ‘major surgery’ as Rothschild calls it). It  is as important to understand where you have come from, and what’s actually happening now as it is to establish your expectations for the future.

Another chapter called Customers determine the successful strategy reiterates what Peter Drucker said many years ago – that “business is not determined by the producer, but by the customer”. While many business leaders agree with the statement, the majority “act as though they are in full command of the situation and the customer will merely buy what they offer”.
 
Many organisations start their strategic planning by looking at their financials and focusing on products and costs. NCSI was no different. We have changed, we start our major strategic reviews with a comprehensive study of our customers, and potential customers, as we understand that only satisfied customers can make our business successful. This led to an organisational restructure to ensure that we service customer needs (in terms of industry sectors) rather than simply offer audits to a range of standards. We identified new services that our customers do want and need, as well as withdrawing products they don't want, or we couldn’t satisfactorily support. As I said, these decisions can be tough.

There are many lessons to be learnt about strategic thinking and planning that we will explore in future issues. Meanwhile, I hope these ideas may help you improve your own strategic thinking as they did for NCS International.