In the world of business, and certainly in the public and social sectors, everything revolves around strategy. Business ventures and social organizations that spring up without a clearly defined strategy are likelier to fail than to succeed; likewise, governments that operate on the instincts of individuals rather than time-bound plans will come to the end of their tenures without much to show for the investment of public trust. Strategy propels an organization through periods of clarity and uncertainty; through boom and bust; and through episodes of global prosperity and economic downturns. Strategy guides hiring of staff, expansion of business lines, introduction of new markets and professional development of employees. Yet, for all its importance, strategy is not straightforward.
For an Africa-based and Africa-centric startup seeking investor funds, its founders may have to choose between seeking investment from a US-based venture capital firm, an Africa-based philanthropist, or an Asia-based private investor. Each of these options has attractions and drawbacks, thus leaving the entrepreneur with important choices to make. Likewise, a non-profit educational institution seeking to provide low-cost but high quality education to underprivileged children might reach out to a prospective funder whose preferred model includes employment support for its beneficiaries.
That organization then has important choices to make about its strategy – should they expand their program offerings to extend beyond education provision to include employment support? Should they hire new staff to focus on this new line of operation or expand the portfolio of existing staff? Should they reject the proposal of this funder altogether, or partner with a different organization to offer the complimentary services? These are all viable options for an organization, and its leaders will have to make some very critical choices, all of which have varying implications for the sustainability of the organization. So what principles should guide leaders in making the right choices?
Firstly, focus on mission. A successful business or non-profit venture must begin with a mission statement that articulates what good it seeks to do in the world and how it intends to pursue those objectives. For most organizations, mission must drive strategic choices. A homeless shelter will hardly pivot its operations to begin to offer environmental cleaning services, but it might extend its offerings to provide low-cost schooling for children in its care, when faced with both choices. Likewise, an insurance company might more readily expand its operations to include financial advisory services before it begins to offer retail services.
Secondly, a venture must regularly conduct internal and external environmental scans to assess its strengths and weaknesses as well as opportunities and threats. An organization providing childcare services in an increasingly gentrifying neighbourhood will do well to assess those demographic trends well in advance of a complete departure of its young population. Thirdly, a venture must carry out regular strategic planning, incorporating the voices of diverse stakeholders and critically evaluating the most important strategic questions impacting its future.
For all its relevance, a strategic plan by itself does not equate to a well-defined strategy, and strategy is not a static exercise. As a well-oiled machine, a functional organization must regularly revisit its strategy to ensure that it is staying relevant in a rapidly shifting world and responding to the most important opportunities in its environment while remaining focused on its mission. An organization whose business model revolves around providing scholarships for students to study in the USA will need to keep abreast of shifting immigration policies which may significantly hamper its operations – equally keeping a strong eye on similar developments in Asia could be a very smart idea. All in all, a well-defined strategy guides nearly every aspect of an organization’s operation, but it demands persistent vigilance from its leaders.