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COMMUNITY UPDATE

Criticaleye's Community Updates are read each week by Members, registered users, and subscribers globally. Click on any of the topics below to see the corresponding newsletter. If you would like to comment further on any of these topics, write to us via info@criticaleye.com.






A good business strategy is essential to drive a business forward. The organisations that have survived the past 18 months, have come out battered and are now, or should be, examining their strategies to take on the next stage.

“The recession is over and now can we get back to normal, and return to where we were before we were so rudely interrupted? Meanwhile, we know that the impact of the near collapse of financial markets is far from over and that the cost and availability of funding, while improving, has not and will not return to those of the ‘good old days’.  So, what are the implications for strategy? We are all told that a good strategy is just that and a good implementation of a mediocre strategy will always be better than the poor implementation of a good one,” says John Deane, Chief Executive – Intermediary Division, Royal London Group.

“What’s the difference?” he continues. “It is the ability to adapt, to play what you see in front of you, to manage operational impacts and cash flows while continuing in a direction that the entire company understands and which will give you a sustainable market position. A good strategy has to be capable of being executed in the varied operational and financial environment you find yourself in. Now might be a good time to review the strategy, develop it and communicate the changes in strategy or implementation while the impact of the last two years is still fresh in our minds.”

The recovery period, no matter how long, is a good time to examine strategy and the direction your organisation is taking. "I think it's an important time to know who you are as an organisation, and to use that effectively in moving towards your future vision,” says Pam Powell, Group Marketing Strategy & Innovation Director, SABMiller.  “Our outlook over the next few years shows an ever more competitive market with high demands for organic growth.  As the most local of the global brewers, we believe deeply in the power of blending local intimacy with global economies of skill (and scale where it matters). So, globally, we have set out a simple, clear framework of five commercial priorities (including one focused on innovation) against which we measure performance.  But within each, there is a very high degree of local autonomy in setting priorities, strategies and plans.  

“By working flexibly and collaboratively, as close to consumers and customers as possible, but also with colleagues from around the world, we can ensure the local creativity, responsiveness and ability to learn fast and share success that will be paramount for winning in a new world order."  

The financial turmoil has reiterated the need for a strong long-term focus, yet too long  can steer organisations aground, and too short-term can be equally detrimental. The trick is to find the right balance between short- and long-term strategies. “Having a three-year plan is, in my view, critical. Without such a plan, you cannot align shareholder, staff and customer expectations,” says Ian Bowles, Chief Executive Officer, Allocate Software.

He continues, “When I joined the company in May 2007, we set out a clear three year plan with specific metrics and targets for all aspects of the business. As we review the past three years, it will be clear to all of our team that we have achieved what we set out to achieve, despite the economic turmoil. As a business, we are currently planning the next three year cycle that will take us to May 2013. The plan will cover financial targets and KPI’s, as well as defining market and geographical expansion objectives, with review points every six months.  It is important to understand how the company will differentiate itself from its competitors and to have that strategy embedded within the plan so that everyone in the team understands  the role they are expected to play in delivering against the objectives.”

According to a survey conducted by the Chartered Institute of Personnel and Development, released on 15 February, almost a third of public sector organisations are planning on making redundancies in the first quarter of the year. Many believe that is the first sign of a ‘public sector recession’.The ability to set and execute a strategy focused on providing first class service to the public is vital for public sector organisations to ride out the wave of ‘their’ recession. Jane Furniss, CEO, Independent Police Complaints Commission, explains how her organisation is planning their strategy amid the crisis, “Unlike the private sector, which may be returning to growth, the public sector is living in a period where the financial situation is likely to get tighter. The IPCC  has experienced growth in demand of between 10 and 25 per cent over recent years and we are expecting  this to continue whilst our budget is expected to decrease.  

“Over the past two years we have been taking steps to reduce our costs and make our service more affordable by cutting management overheads and reducing our back office and estates costs. We are investing in our core service of complaints handling and investigation and ensuring that the police learn from complaints. Our overall strategy it to demonstrate, as an organisation, that we are indispensable to the public and integral to maintaining public confidence in effective policing.”

If you would like further information on today’s topic please take a look at the Insight page on the website.  The Global Outlook for 2010, by Accenture’s Mark Spelman written for Criticaleye, examines how business leaders will have to balance short-term cash and cost imperatives with a renewed focus on the longer-term trends that will drive the recovery and shape the next phase of growth.

Please get in touch if you have any comments about the issues in today's update.

I hope to see you soon,

Matthew