The value of strategy
I just started reading the book “The lords of strategy” by Walter Kiechel, who is the former Editorial Director of the Harvard Business Review. I have not yet finished the book but it’s a worthwhile read. Kiechel explains the origins of business strategy and the increasing importance of strategy in most corporations over the last 50 years. One can dislike the book’ strong focus on business consultants and their ever changing strategy memes (From “Just-in-time” to “Re-engineering”) but companies have significantly increased their strategic intelligence over the last years. And yes, business consultancies like BCG or McKinsey were critical to enable this positive change.
The more surprising is that it seems that most advertising agencies don’t pursue consistently a strategy of their own. It seems a lot of agencies live in a strategic vacuum that manifests itself in three different organizational life forms with different levels of strategic blindness:
- Service clients and make them happy. These agencies don’t see the need for their own strategic plan. Their belief is the satisfaction of their clients is sufficient for long term survival
- Satisfy the visionary ego of the key agency leader. These agencies don’t have a strategic outline beyond the eye sight of the charismatic company leader. A well researched and defined company plan with a three to five year horizon would assume that the leader does not intuitively understand and accordingly change the company’s structure for long-term success. Surely, he or she does not, but no one dares to tell him or her.
- Deliver profit to the agency’s holding company. While the ultimate goal of any business organization is to deliver profit for its shareholder and benefits for its stakeholder, a lot of people confuse the result of making profit with a strategically defined plan and purpose. Generating long-term profit is the outcome of a well design strategy, not a strategy by itself.
Not surprisingly I believe that agencies that ignore the importance of strategic intelligence and the benefits of a well designed strategic plan will have only a short window of success. The need for strategic planning for any agency should answer at minimum the following questions:
- How is your serviced market changing over the next three to five years? What are the key implications for your current business model and competitive positioning?
- How would you describe the current and the desired state of your organization?
- What are the key strategic bets that your company will focus on to get you to your desired organizational capabilities and offerings?
- How are you going to measure your progress against the strategic plan?
Business strategy is a much less complex field than most marketers believe. It just requires a good understanding of the key market trends, the analytical and intuitive understanding of the core and essence of the own organization, and the courage to put down a stake for the future. And it can be as insightful, creative, and entertaining as creating a 30 seconds TV spot or a iPad application.