Creating value with a robust strategy to navigate the year ahead
COVID-19 has had a deep impact on businesses across multiple fronts. It has challenged business models and long-held beliefs around supply chains, and highlighted limitations on traditional approaches to strategic planning such that many are not fit for purpose in the current environment.
Some of the strategic themes consistently raised by executives during 2020 were:
- Lack of alignment between shareholders, management and the board around a common purpose, path and timeline to create value;
- Failure to truly understand the key drivers of performance and a lack of transparency;
- Insufficient discipline and accountability around the execution of strategic initiatives and the tracking of their success and impact; and
- Lack of clarity and alignment on which strategic priorities remain post-COVID and which are no longer relevant.
We see 2021 as a unique opportunity to adjust to the lessons learned from the pandemic and set a strategy and plan for the future focused on creating value.
There will be five key areas of focus in shaping a robust strategy to navigate the year ahead:
- Reimagine the strategy and planning processes within your organisation. Think about zero-basing your business to understand its purpose and the key drivers, to better allocate resources. Re-think strategic horizon timeframes to take account of the material uncertainties that still exist;
- Stress test your strategy with scenarios to allow informed decision making. This will also focus discussion on the assumptions;
- Review the number of initiatives currently in-flight, screening them for alignment to purpose and value creation;
- Make space for continued discussion of strategy and progress at the board and executive level. Ensure this process is supported by credible financial information and data analytics to inform proactive and more agile decisions; and
- Businesses need to be bold – now is the time to make calculated decisions on the future. Holding off means risking being left behind. We have already seen businesses go into a holding pattern.