Friday, July 13, 2012

McKinsey on Strategy in a Changing Environment

Keeping an eye on the big picture - understanding changes in the environment that may be happening more rapidly than the three-year time frame of most strategic plans - is an important element of what not-for-profit and small business executives do, particularly in these challenging times. But it's a task that can easily get lost in day-to-day activities. The newest McKinsey Quarterly, available free here after registration, has an article listing helpful suggestions; as usual these are geared to large corporations but are easily adapted to not-for-profits, small companies, and even government agencies.

McKinsey's recommendations for increasing the time spent on strategy to match the time spent on operating issues are:

     * Have a management group meet regularly, weekly or every other week, and
     * Use the meetings to identify and discuss emerging critical issues,  in order to
     * Position the organization to make timely decisions
The idea is that thinking about the big picture can help prevent crises from developing.

The article then lays out some practical tips to ensure the strategy review process remains under control:

     * Limit the number of issues to be pursued at one time
     * Be consistent and practical about setting priorities among issues as they are identified.
One way is to give each member of the forum a set number of slots on the agenda to bring forth whichever issues for review he or she thinks are most important. A few slots for critical issues . . . can be reserved for the [organization]-wide perspective.
     *  Quality - of background work, of discussion points, of decision-making - is more important that quantity.

Translating the new strategic issue into an operating direction can be a challenge, though there is the advantage that top management is (or should be) behind the new initiative. Having a small pool of uncommitted money available is important, as are regular progress checks. And, of course, checking in with the board of directors or senior staff in the hierarchy is important as well.

If this all sounds too abstract, the article provides an example. It's a large bank example, but, again, with a little imagination, the description can be translated to a smaller (and perhaps more nimble) organization.

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