{"id":24995,"date":"2016-12-27T00:20:07","date_gmt":"2016-12-27T00:20:07","guid":{"rendered":"http:\/\/wealinternational.com.br\/?p=24995"},"modified":"2017-02-13T12:49:48","modified_gmt":"2017-02-13T12:49:48","slug":"mastering-the-building-blocks-of-strategy","status":"publish","type":"post","link":"https:\/\/wealinternational.com.br\/en\/mastering-the-building-blocks-of-strategy\/","title":{"rendered":"Mastering the building blocks of strategy"},"content":{"rendered":"

Left unchecked,<\/strong>\u00a0market forces continually conspire to deplete profits. Powerful business strategies can counteract those tendencies, but good strategy is difficult to formulate.1<\/a>Indeed, the latest McKinsey research (see \u201cThe strategic yardstick you can\u2019t afford to ignore<\/a>.\u201d) finds that a very small number of companies create most economic profit.2<\/a>The research also shows that a significant number of good companies outperform even in so-called bad industries, where the average economic profit is less than the market average.<\/p>\n

How do they do it? In other words, where do powerful strategies come from? Sometimes it\u2019s luck, or good timing, or a stroke of inspiration. In our experience, it\u2019s also possible to load the dice in favor of developing good strategies by focusing on the core building blocks that often get overlooked. One is the need to gain agreement\u2014before creating strategy\u2014on the essential decisions and the criteria for making them. Another is to ensure that the company is prepared and willing to act on a strategy once it is adopted. Too much of what passes for strategy development, we find, consists of hurried efforts that skip one or more of the essentials. The resulting strategies are often flawed from the start.<\/p>\n

It\u2019s also easy, though, to go too far in the other direction and make the creation of strategy a rigid, box-checking exercise. Appealing as a formula-driven approach might be, it ignores the truth that strategy creation is a journey\u2014and an inherently messy one at that. Proprietary insights are hard to come by. Shaping keen insights into good strategies requires deep interpersonal engagement and debate from senior executives, as well as the ability to deal with ambiguity in charged and often stressful circumstances. When would-be strategists overlook these dynamics, they cover the essentials in name only. Consequently, they miss opportunities and threats, or create great paper strategies that remain unfinished in practice.<\/p>\n

In this article, we\u2019ll outline a middle path\u2014an end-to-end way of thinking that views the creation of strategy as a journey, not a project. This method, developed through our work with some 900 global companies over the past five years, can help senior executives approach strategy in a rigorous and complete way. We\u2019ll also describe some principles that strategists should keep in mind as they use the method to ensure that their strategic-planning processes embody the spirit of debate and engagement, which, in turn, yields inspiration. By better understanding both the method and how to get the most out of it, companies can boost the odds that the strategies they create will beat the market.<\/p>\n

Do justice to strategy\u2019s building blocks<\/h2>\n

Most companies we\u2019re familiar with demonstrate a variety of good habits when they create strategies, and they get many things right. But what they miss can be critical. Consider these examples:<\/p>\n