Improve Your Strategy by Taking Decisions

The credibility of a strategy can be deducted from the way internal decisions are (not) taken.

We all take a number of decisions every day. Many of those are simple and have little effect. In your organization there are choices to make that can have a large impact, like the many investment decisions. There are however also options that are not really taken. You can experience that by the fact that there are two sorts of camps dealing with familiar problems though with different solutions.

For example, in the managing board there are supporters for both autonomous growth and growth through takeovers. When dealing with the administration and IT you will hear about outsourcing versus own development (buy or make). And in the marketing and sales you could argue about product versus service development. And for the real specialists there are discussions about JAVA or .NET or PHP versus ASP (excuse the jargon).

Yet, your organization or team has only one budget to spend and if you choose to invest in one, other options are left with the reduced budget. You could choose to concentrate, to give an example in the marketing area, both on client-retention and on prospecting. Yet the energy (budget) spend on a new client costs much more than the one retaining existing clients. So it is better to choose. In practice this doesn’t seem to happen that often. Organizations spend too much budget on internal competing solutions for solving the same kind of problems. There are four reasons you should not do this.

First of all if you do choose for one, you will diminish these internal competitive elements in your organization and you can concentrate on the external competition. This is the most important reason. Internal competition is alright if the organizational areas are different; the differences between sales and administration for example. They compete but on different elements, in a sense that they complement each other. It is hard if you end up having multiple solutions for one area and still have to make sure that these will serve the same goal. More probably is that these differences exist because of a widening of the focus of management. The different camps are left to themselves and are out of control. This costs energy that could have been spent on implementing (new) client wishes.

Some people will say that you are more flexible if you do not choose. You can serve different type of clients the way they want it. ‘And in time, the problem solves itself,’ as you might hear but the question is what is solved and how? Did you loose the clients again, did your employees quit because they saw no real future? Everybody whether client, employee, or supplier, is bests served when you are clear. Motivation (moving to a direction) is achieved best if you know what direction to move to. When dealing with two different directions one will probably be not the right. You are wasting energy.

Also the management of competences will be more complex if you do not make a specific choice. This requires more than average training and support. The management of such a complex environment will be much more difficult to control. Within your company there will be already many different specialists and to more you invite new to the existing collection the more difficult it will be to manage the whole. All this supposing that you are managing the specialists and not the other-way around, which would add another problem.

Finally a diffuse environment will require a complex infrastructure. You need to support various platforms, methods and solutions which will mean that you can standardize less. So not only the infrastructure is more expensive, but also the maintenance of the same. You will end up in a vicious circle, starting with again more competences, more complexity, etc.

There is of course an exception to the rule. In the case that your company has a unique style of handling such a complexity. A certain history of dealing with such a situation. Something to be aware of and to cherish.

© 2005 Hans Bool / Astor White

Hans Bool (The Netherlands) is the founder of Astor White a consulting company dedicated to (the human side of) management consulting and e-advice. He has many years of experience in (project) management, consulting and business architecture. He studied economics and has recently published the book: “How to manage your organizational portfolio – just stick to your rules”.

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