How often should your corporate strategy be reviewed? It’s a question that strategists are asked frequently. And the answer isn’t as simple as a number.
The business dictionary defines corporate strategy as “the overall scope and direction of a corporation, and the way in which its various business operations work together to achieve particular goals.” With that definition in mind, should your corporate strategy be a regularly reviewed — and altered – document, or one that is formulated once and adhered to over time as a sort of blueprint for the business?
The answer, as it were, is a bit of both.
By saying that your corporate strategy indicates the “overall scope of a corporation” the business dictionary reminds us that the corporate strategy literally helps to define what your business is. It also helps to identify which parts of the business need to work together in what ways in order to achieve your goals. So how often should you be defining what your company is, which parts need to work together and how, and what the company’s objectives are?
Strategist Rory Deavin says the process should be an ongoing concern. “The strategy of any business should be constantly under review,” he says. “Changes in customers’ requirements, technology, regulations or the competitive landscape might well call for a change in strategy.”
On the other hand, however, the question of consistency comes into play. It would be impossible — and undesirable — to redefine the business every few weeks. And, while it is necessary to react to changes in the environments that affect the company, it is also necessary to have a vision and stick to it. The company’s mission and vision should become part of how the company does business. They should be internalized by every employee and inform a particular culture. They should provide direction and meaning behind every transaction or service rendered. It takes time to build a strategy that is assimilated by employees.
So how do you strike a balance with your corporate strategy? How do you produce something timeless that can provide long term direction, and simultaneously ensure you are staying aware of changes around you that require a reaction?
Something of an answer can be learned in the example of photo and camera giant, Kodak. The 132-year old business saw decades of spectacular success, followed by some huge failures and bankruptcy. Most recently, it has managed to rebuild itself despite many predicting its ultimate shut-down.
In the mid 1970s, Kodak sold cameras, and it did it well. It dominated 90% of the US market share and enjoyed a healthy bottom line. It was known for its innovation, and produced the world’s first digital camera. Fast forward to 2012, the same company was filing for Chapter 11 bankruptcy. Where did Kodak go wrong?
One might argue it did not review its corporate strategy often enough, or at least not in the right way.
While Kodak managed for decades to innovate in response to the needs of the global public, its operations did not reflect this part of its strategy. The company was too reliant on selling film to a consumer that was switching very quickly to digital. The result? A number of attempts, and millions of dollars, spent on trying to salvage the business. Ultimately, these failed. The company closed down its camera business and spent 18 months in sequestration. But, from these unlikely circumstances, its corporate strategy saw a phoenix-like rebirth.
It is no longer the end-user provider it once was. Kodak now sells high-end printing equipment in a business-to-business model.
If there’s one thing we learn from Kodak’s failed turnaround attempts, it’s that corporate strategy cannot be developed retrospectively. We learn that reaction to environmental changes can only be successful when implemented at a strategic level. Thus, we learn the need to adjust our strategy as fast as we innovate; in fact, faster. A failure to do this — a rigidity or slowness in strategy — will lead to our company’s demise.
But another thing we learn is that it’s never too late to clean the corporate strategy slate and start again. If Kodak had refused to let go of its iconic brand positioning as a consumer company, it would in all likelihood still be bankrupted. Instead, it’s facing a fresh new start with several new prospects
So, how often should you review your corporate strategy? The answer is: every day. In fact, constantly reviewing your corporate strategy should be made a formal part of your strategy. That way, when you inevitably change your corporate strategy, you’re not changing your corporate culture as well. You’re living it.
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