The recent economic growth in Finland has enabled companies to ride the wave and show, to the satisfaction of many stakeholders, solid growth figures and strong order books as the quarterly figures for 2018 are becoming public. This development has given confidence for many CEO’s, strategy directors and management teams to pat themselves on the shoulder for doing a great job in executing an invincible strategy.
It is easy to forget the results of a McKinsey study of over 200 companies, which showed that revenue growth is driven mainly by market growth in the markets where a firm competes, and another study of 3000 companies that concluded that up to 75% of increases in firm-level profitability can be explained by improvements in the market-level profitability.
BCG Henderson institute found that nearly 80% companies stated that their strategic planning starts with setting a goal, and only then defining ways to get there. The strategic process in 90 % of the cases is linked to the annual financial reporting, which steers the strategic decision making to a single annual event. It was also noted that a lot of time is spent on analysis instead of implementing a more experimental fail fast process.
Studies of more than 100 boards of Nordic international companies by Lagercrantz Associates, show on one hand that 69 % of the Boards do not consider the strategic discussions within the board satisfying (CEO and management team input), and on the other hand 55 % of CEOs find the boards contribution to the strategy unsatisfying. This suggests that the whole strategy process and needed strategic palette should be reviewed, to overcome challenges in the new economy and implement a purposeful strategy on the long-term.
The notion of an even faster world is widely acknowledged, and many recognize the importance of more agile ways to manage unpredictable environments, but only a handful of companies have activities in building the core business beyond tomorrow and challenging their current business model and strategy.
As a means for companies to challenge their current 'operandi modus', Hanken & SSE Executive Education offers the Succeeding in the New Economy program to widen perspectives and finding concrete methods in:
- Understanding future trends and translating them into business models
- Reconfiguring the organisational culture to be more collaborative and exploring
- Defining a way to lead diverse team in achieving results, and driving strategy with the help of the whole organization in an even more fast-paced world
So let’s tie our laces, we are in it for the long run.