by Ken Goldberg
Businesses have a continual challenge to stay relevant – no matter the size of the operation. We live in a fast-paced world where consumers seek better ways to fulfil their requirements and unmet needs. To that end, organisations must persistently re-examine their business models and existing structures to ensure a winning value proposition. This can be difficult for companies that need to balance ongoing operations with innovative practices. It can also be demanding for businesses dealing with compliance measures and an ever-changing environment while having growth aspirations.
A typical strategy development process tends to deal with outcomes based on insights following a diagnostic process. Risk factors that can derail these outcomes should be part of the discourse. When organisational changes are necessary, it is worth considering the impact that risk factors have on strategic outcomes. This will help determine whether implementing the business leaders’ desired objectives to survive, adapt and flourish will succeed.
Although not exhaustive, five distinct risk factors have been highlighted below and should be considered as part of the strategic process. These elements may seem obvious but are common risks that can hinder organisational initiatives:
1. Employee relations
When considering strategic initiatives, evaluate whether employees are on board with the changes or will potentially cost the business in productivity - or worse.
2. Corporate knowledge
Assess whether knowledge assets such as process, skills or other information which help to run operations more efficiently are applicable to any new strategic initiatives. Furthermore, an assessment of whether that corporate knowledge will be properly captured moving forward, should also be conducted as part of the strategic process. Otherwise, there could be adverse consequences related to security, productivity, market value and other areas of corporate knowledge.
Understand the gap between the organisation’s market realities and desired image versus current branding. As part of the strategic process, make the appropriate changes so that targeted consumers can easily identify the offering and feel a connection to the business.
4. Internal systems and structure
Recognise that existing internal systems have many dependencies across areas such as culture, structure, information systems, and other domains. These form a core part of prevailing operations and whilst they can be difficult to alter in times of change, they should be re-assessed and aligned with any new strategic direction.
Evaluate the range of abilities within the organisation that will be required to holistically pursue and deliver the strategy. This may be based on functional areas such as sales, marketing, HR, finance to name a few. It is vital that the composition of skills reflects the overall approach and new skills may need to be acquired as part of the process.
In order to successfully execute strategy, it is vital for organisations to ensure there are few to no impediments during the implementation phase. Common key risk factors such as the items described above, as well as some other critical factors, must be considered prior to the commencement of initiatives. Organisations and business leaders need to be proactive to deal with these factors so that strategic outcomes have the best chance to succeed.