Last Saturday’s post (part 3 of this article series) began going into the layers of the strategic planning model in thecontext of of the business ecosystem analysis. This model was introduced two articles ago and depicted as a graphical representation of the key elements of strategic planning. In this week’s edition of the strategic planning series, we will continue walking through the layers of the graphical model relating to the “business ecosystem”.
Industry Direction / Momentum
Continuing along through the ecosystem dimensions, we will look next at the direction and momentum of the industry sector. By studying the movement, direction and momentum of the industry or industries served by the organization, the data can feed the strategic planning process leading to better planning decisions. For instance, if the industry data suggests that competitors are enjoying a technological advantage over our firm and that they are steering the industry in a direction that is eroding market our share, what do we do about that? If we cannot dominate, do we leave?
The decision to continue following the market or to break away from the pack will have huge implications on organizational action. When faced with a technological disadvantage such as the one posed here, strategic decisions must be made on possible exits from the market, acquisition of a competitor, partnering, mergers, increased research and development in an attempt to close the competitive gap.
All possible strategic actions will have long-term implications – rewards or consequences, therefore the importance of scenario and contingency planning along with risk management become more and more evident.
To avoid lagging behind competitors, organizations must continue to cultivate ideas for improvements to products and services, then harness the best of the innovations into value-creation enhancements or altogether new offerings. The challenge with innovation in many organizations is framing it into a discipline that can be leveraged. Incentivizing innovation is a step in the right direction, but is only a part of the framework needed to capture, process and act on creative ideas. Such a process should outline how innovation unfolds, starting with the origination of an idea and depicting the steps that lead to its transformation into something useful and that can be implemented.
Core competencies are what make individuals and the organization they constitute unique. The competencies are a generic list of skills- these skills as applied to the employee and the organization then becomes the foundation for what the organization possesses that set it apart from its peers. These groupings of skills are a source for identifying competitive advantage and the building blocks for future opportunities.
Definition: Core Competency – a bundle of skills that enables an organization to provide a particular benefit. A core competence is not product or service specific.
Core competencies are the underpinnings of the organization’s skills that contribute to the development of a range of products and services and the cornerstone of successful strategy execution.
Technology should benefit the business through increased efficiency in the delivery of products and services, leading to a boost in market value and competitive advantage for the organization. Technology strategy must be aligned to corporate goals, so the planning process as it relates to technology should help identify, define, and develop both departmental and discrete initiatives that save money, improve quality, and enhance performance.
Join again next week to continue the discussion.