Strategic Catalysts for Service Creation
by TeleChoice

Posted: 03/25/2001

Abstract:

Strategic catalysts exist to directly address the challenges executives face in developing corporate strategies in the midst of rapidly changing and hyper-competitive industry realities. Managing in this environment is a high-energy, high- risk exercise. The catalyst lowers the energy required for the executive team to leap across the strategic barrier and accelerates the process of crystallizing the strategies latent within the organization. 

At its simplest, strategy is what guides companies in deciding what they should do and what they should not do. There are many forms of strategy: funding strategy, product strategy, market strategy, technology strategy, and people strategy. But all these strategies must be developed within the context of an overall business strategy: What is the unique definition of the company, and what is the company trying to achieve? 

Virtually every company believes that it has a business strategy. Unfortunately, many companies actually mistake one of their substrategies (usually product strategy or market strategy) for their business strategy. This limited strategy definition is often enough for the management team to experience great success in raising initial funding, creating initial excitement about the company, and even landing early customers and revenues. However, it is not enough to provide direction for the critical decisions that all startups face.

Similarly, as established companies grow and develop, they often lose the strategic focus that led to their initial success. As new divisions are formed to pursue specific market opportunities, as new businesses are launched to develop new types of products and services, and as complimentary businesses are acquired to continue corporate growth, the corporation can easily lose the strategic vision of why it exists and what it is trying to achieve. When this happens, the corporate strategy is usurped by the individual business and division strategies resulting in internal competition and corporate inertia. 

In today’s hyper-competitive world, a strategy-challenged firm will fail—we see it everyday. It isn’t pretty, and it isn’t pleasant for anyone involved. In a hyper-competitive industry like telecom, a company’s core business strategy is critical to its success. When the going gets tough, the strategy keeps the firm going in the right direction. Without a sound business strategy, a company will make bad decisions; it will do things it shouldn’t, and it won’t do the things it should. 

A strategy-challenged company will make bad decisions about which direction to grow the business, which opportunities to pursue (and pass), which markets to enter, what companies to acquire, and so forth. A strategy-challenged firm will often contradict itself, making decisions that move the company erratically in many different directions at once. A strategy-challenged firm will bounce from one market reaction to the next in hopes of finding the magic formula for survival or success. 

Yet business strategy perpetually falls off the priority list as top executives must focus on the key business tactics required to keep their firm moving—moving here, moving there, but always moving in this fast-paced world.

There are three traditional ways to tackle business strategy creation:

1. Internal: Assign corporate strategy to a member of the executive team. Expect her to drive consensus among the management team on critical strategic issues while everyone (often including the strategy executive herself) continues to focus on day-to-day tactics.
2. Outsourced: Hire a top-notch management consulting firm. Spend three to six months educating them on your industry and business so they can consolidate into a 100-page presentation the elements of strategy and insight that currently reside within the collective— but disconnected—minds of your management team.
3. Ignored: Focus on day-to-day tactics. Hope that your intuition is enough to drive the right tactics to achieve enough success to carry you to the next day, the next month, the next quarter. (Often combined with one or both of the Internal and Outsourced approaches.)

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