Bangkok--9 Jun--PwC’s Strategy
Companies must bridge the gap between strategy and execution if they expect to rise to the top of their industries, according to a new book by PwC's Strategy&.
Today's corporate leaders often struggle to develop strategies that keep them competitive in an increasingly complex global marketplace.
Half of all leaders don't believe they have a winning strategy to begin with, while nearly all report missing major opportunities in the market, according to a survey by PwC's Strategy&. Only 8% of top executives say they're good at both strategy and execution.
This is because their company's goals are disconnected from what they are able to accomplish.
Strategy That Works, a new book from Harvard Business Review Press by authors Paul Leinwand, Principal at PwC's Strategy& and Cesare Mainardi, retired CEO of Strategy&, demystifies the perennial question: "Why are certain companies so successful?"
With incoherent leadership, many companies fall into the traditional growth trap. They chase too many market opportunities where they don't have the capability to win, and thus fail to make their vision a reality.
Like winning companies such as Apple, Amazon, IKEA and Zara, businesses can close the strategy-to-execution gap by applying an unconventional approach instead of following traditional wisdom.
Apple, for example, isn't just a tech company or phone manufacturer. Its value proposition combines the roles of innovator, aggregator and experience provider. This identity guides the strategic decisions the company makes, based on its market-differentiated capabilities.
IKEA, meanwhile, is known for its ability to cut costs effectively. It only seeks cost-saving opportunities that don't affect quality and its customers' experience.
The book explains the five unconventional steps that winning companies around the world put into practice, including:
1. Commit to an identity: Instead of chasing growth wherever it may occur, focus on your differentiating capabilities and grow by being consistently clear-minded about what you do best.
2. Translate the strategic into the everyday: Build and connect the cross-functional capabilities that deliver your strategic intent, instead of copying others.
3. Put your culture to work: Instead of changing your culture, celebrate and leverage your company's cultural strengths.
4. Cut costs to grow stronger: Instead of cutting across the board, invest in your differentiating capabilities and cut everything else.
5. Shape the future: Reimagine your capabilities, create demand, and realign your place in the market on your own terms instead of reacting to changes by others.
Pinpradab Chotiprasidhi, Director of Strategy& at PwC Consulting (Thailand), said that many Thai companies want to transform their businesses. Yet they're facing a problem in executing their strategy.
"All too often we don't think about strategy and execution together," Pinpradab said. "For example, when times are tough some companies would want to go lean by cutting costs across the board such as laying off people and closing branches.
"By employing this strategy, you risk starving the parts of your company that matter the most. This would eventually lead to jeopardising your core competency and hurting your true identity altogether."
Pinpradab suggested that Thai executives should first and foremost recognise the identity and core capabilities of their companies prior to strategising a business roadmap or embarking on any major initiatives.
"When you stick to who you are, you're most likely to develop capabilities that set yourself apart from others. Finding an identity and committing to it is about knowing your strengths.
"When business slows down, you don't go around chasing a million opportunities that aren't your strength. Instead, you focus on differentiating to capture the business you know you have the chance to win."