Successful business strategy lies not in having all the right answers, but rather in asking the right questions, says Harvard Business School professor Robert Simons. In an excerpt from his new book, Seven Strategy Questions, Simons explains how posing these questions can help managers make smart choices. Here are the seven questions Professor Simons suggests:
1. Who Is Your Primary Customer? He emphasizes the adjective "primary". These are the customers to whom you should devote most of your company's resources.
2. How Do Your Core Values Prioritize Shareholders, Employees, and Customers?
Real core values indicate whose interest comes first when faced with difficult trade-offs.
Prioritizing core values should be the second pillar of your business strategy. Most companies with whom I deal would answer "Customers of course". But in practice, it is often not the case.
There is no right or wrong, but choosing and consistently sticking to your choice is necessary.
3. What Critical Performance Variables Are You Tracking? It's your job to ensure that your managers are tracking the right things by singling out those variables that spell the difference between strategic success and failure. Like the preceding two questions, the focus in this question is again on the adjective "critical". These variables should tell where the company is going, unlike your accounting statements that tell you where you've been.
4. What Strategic Boundaries Have You Set? Strategic boundaries, which are always stated in the negative, ensure that the entrepreneurial initiative of your employees aligns with the desired direction of the business. I prime example of failing to do this was the Enron experience.
5. Are You Generating Creative Tension? Sustaining ongoing innovation in organizations is notoriously difficult. People fall into comfortable habits, sticking with what they know and rejecting things that cause them to change their ways. Yet without innovation in a world characterized by rapid change, the company will eventually wither and die.
To overcome such inertia, you must push people out of their comfort zones and spur them to innovate. The author shows how to accomplish this.
6. How Committed Are Your Employees to Helping Each Other? This is a lot of what teamwork is all about. If your organization requires teamwork to succeed (and I believe that most do), then it's critically important to build norms so that people will help each other succeed—especially when you're asking people to innovate.
7. What Strategic Uncertainties Keep You Awake at Night? No matter how good your current strategy is, it won't work forever. So adapting to change becomes imperative. Adapting is critical to survival, but it's extremely difficult to do. With change constantly surrounding us, employees often do not know where to look or how to respond.
Your personal attention is the critical catalyst to focus your entire organization on the strategic uncertainties that keep you awake at night. After all, everyone watches what the boss watches.
Please click here to see the complete article that was published by the Harvard Business School on November 22, 2010. You may want to read Professor Simons complete book, "Seven Strategy Questions"
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