Tag Archive for: strategy

Open Strategy – or trust in your own employees!

/by

Ideas about business strategies are slowly changing. Until now, strategic management was the exclusive preserve of the executive level or management. Sometimes management consultants were also commissioned to shape the future for their own company. The latter often led to acceptance problems and slow implementation. With the Open Strategy approach, a radically new way of strategy development is now being taken. In the following, the approach is described in more detail, the main changes and advantages compared to the classic approach are shown and finally there are some practical tips on how to apply it in your own company, department or division.

What is Open Strategy? A definition

Open Strategy is about radically opening up the strategy process by involving the company’s own employees as well as external third parties or even competitors in strategy development and formulation. Instead of developing strategies only within management and advisory circles, they deliberately push for access to other sources of knowledge, such as Fontline employees, customers, partners and suppliers. This approach was developed by professors and advisors Christian Stadler, Julia Hautz, Kurt Matzler and Stephan Friedrich von den Eichen over the last 2-3 years. You have recorded your knowledge in the book of the same name (Link).

The main advantages of using the Open Strategy approach are as follows

The wisdom of many

In the Open Strategy approach, strategy development is not limited to a small circle of top managers or external consultants. The more people are involved, the more diverse the approaches. And this principle already applies in the analysis. This is because scientific findings show that frequent mention of strengths, weaknesses, opportunities or risks also indicates high relevance. In his book “The wisdom of the many – why groups are wiser than individuals”, James Surowiecki goes into detail as early as 2004 on the fact that the accumulation of information in groups leads to joint group decisions that are often better than the solutions of individual participants (so-called collective intelligence). Leaders would therefore do well to increase the probability of success of a strategy with the help of collective intelligence.

Diversity instead of single-mindedness or the crux of confirmation bias

If the strategy development is done by a few, the results can quickly become one-sided. Thus, political interests of individuals usually stand in the way of a promising strategy. This behaviour can be traced back to the so-called confirmation bias. In the process, people and especially alpha animals in leadership positions see their own convictions confirmed by others. In this way, information is selectively chosen that fits one’s own perception.

On the one hand, novel strategies are based on courage and thinking outside of familiar patterns. The confirmation bias also often applies to so-called industry experts. Strategy consultants who have a specific industry focus tend to use already known scenarios from the industry environment for strategy development. So the chances of developing new innovative strategies are slim. It is better to involve cross-sectoral experts.

External experts, however, do not necessarily come up with more innovative ideas than the company’s own staff. Especially when the involvement of the employees comes from different hierarchies and areas. Employees who are new to the company can also often bring in new ideas and directions without bias. Accordingly, Open Strategy brings out more innovative or even disruptive ideas than conventional methods.

Greater willingness to implement or prevent the ‘not-invented-here’ syndrome

A major advantage of the Open Strategy approach is that implementation fails less often. This is simply because the staff involved also feel responsible for successful implementation. Changes are more likely to be accepted if they are brought about by one’s own ideas. This behaviour is sometimes also based on the “not-invented-here” syndrome. This is an aversion, i.e. a negative attitude towards ideas and innovations that are brought externally to a company, a person or another department of the same company. The more and earlier the staff from various company units are involved, the greater the willingness to implement the ideas and strategies.

More realistic instead of theoretical artefacts

Strategies in which the company’s own employees were involved in the development take better account of the company’s conditions. Outsiders are not familiar with the current situation in the company, do not know about investments that have just been made or are simply too far away from the day-to-day business. The latter is one of the main reasons for involving external parties in strategy development, in order to prevent possible operational blindness. However, this is often overrated or used as a pretext for commissioning. In many cases, their own employees are quite capable of getting rid of operational blindness if the questions are asked appropriately and they do not experience any interference from the supervisors present. Measures proposed by the workforce are more concrete and tangible. The people know exactly what could be done, also in detail, because they deal with the processes and operational issues on a daily basis or are in direct contact with customers and suppliers.

Simple is not always the best strategy, but the best strategy is always simple

Simple and comprehensible should be at least the mission and vision, which should reflect the strategy as guidelines. Storytelling is an essential tool for successful communication in today’s world. And this also applies to internal company communication. The more people from the company were involved in the strategy development, the more stories there are to tell. Managers as well as experts tend to use many anglicisms. Technical terms that are on everyone’s lips right now. And so these “buzz words” are often included in the strategy formulation. But this encourages misunderstandings among staff and sometimes counteracts the actual message behind it. Strategies are there for all to follow and understand what needs to be done to implement them. Keep them simple in communication and find out early on by involving staff.

Meets the expectations of a new generation

The classic approach to strategy development is also at odds with the new world of work (New Work). Employees want to be involved in the future direction of the company or division. And not have them presented top-down by the managers for implementation. It would also be fatal not to take into account the opinions and ideas of Generation Z, because they work with different means of communication, have a distinct value system and are open and receptive to technical innovations. Many of the young workers in the private sector make use of the latter in particular and can thus contribute significant innovative impulses to the development of the strategy.

To sum up, here are some practical tips for applying the Open Strategy approach

  1. Trust your own employees and involve as many as possible from different hierarchies and departments. The more diverse the composition, the better and more innovative the contributions.
  2. As a first step, open up the strategy process to your own staff. This step already brings a lot of new insights and ideas. The involvement of third parties can then take place selectively to verify or supplement the actual/target analysis. For many managers, the much more intensive and early involvement of employees is already a major adjustment of their self-image.
  3. Rely on tried and tested tools that are easy to use and build on each other. It doesn’t take the latest sophisticated strategy framework to come up with good strategies. The use of strategic management methods must not become an academic exercise, but must be applicable quickly, intuitively and without long training periods by many.
  4. Use digital solutions to work on the strategy flexibly and independently of time and place. This way you can also reach employees at international locations and are not tied to time-limited workshops at one location.
  5. The most suitable digital platforms are those that have been specially developed for strategy development in teams, such as ConWISE.de (link to trial version). Online whiteboards and collaboration solutions such as Miro and Mural, while offering many templates, do not guide users through the process and are designed as crativity tools for online meetings rather than for unaided offline elaboration.
  6. Challenge industry experts to ensure strategies innovate and differentiate from competitors.
  7. Use impulses from outside when developing your strategy. These can also come from AI-based systems.
  8. Always be aware: the employees in the company together are smarter than the smartest expert.
  9. Follow a structured approach to answer the 3 key questions: Where do we stand? Where do we want to go? How do we get there?
  10. Strategic management is not purely a leadership task. Open up the process consciously to your staff.
  11. Engage or appoint a person to coordinate and facilitate the process.
  12. Examine the possibilities of self-consulting approaches to develop successful strategic concepts within the company.

Näheres dazu auch im Artikel Strategy development in the 21st century – time for a new approach

Conclusion

The traditional process in which top management retreats with its team of advisors and works out a strategic plan behind closed doors has had its day. Today, it is no longer enough to communicate the results of this work in the form of powerpoints to employees in town hall meetings and then set a specific budget for each area so that they can implement the strategy. Managers already benefit from the involvement of their employees in the analysis. No one knows the company and the industry as well as she does. It is important to get rid of old thought structures that say that strategic management is the sovereign task of the top management. One would disregard the great potential that lies within one’s own company if one relied instead on the knowledge of a few or a few selected management consultants.

A turning point in strategic corporate management

/by

We are currently experiencing a turning point, both politically and socially. Previously valid norms and modes of action are being questioned. Yesterday’s common practice is stopped today. But what does that mean for companies? Does corporate leadership need to rethink? Yes, a turnaround in strategic corporate management can already be seen today.

The business environment is changing significantly

Whether it is new spending in the billions on military defence (Capital, 28.2.2022), an acceleration of the energy turnaround (SZ, 28.2.2022), or the strengthening of the semiconductor industry in Europe (EU, 8.2.2022): not all of this comes as a surprise, but we are now challenged to master several challenges simultaneously. In order to achieve this, managers must fundamentally question their actions and adapt them quickly. In short: the corporate world is also facing a turning point. Regardless of whether it is a medium-sized company or a corporate group, corporate management under the yardstick of constant economic growth is a thing of the past.

A turning point in strategic corporate management – What are the triggers?

A turning point in strategic corporate management

Trigger of turning point in strategic corporate management

Some changes and influencing factors have been known for some time, such as demographic change with its effects on the skilled labour situation. The call for sustainable and environmentally conscious management is also not new. What is new, however, is the emphasis on how these changes are now being demanded by politics and society. Awareness of change and its consequences has also increased. This brings opportunities, but also risks. One example: Since COVID-19, the topic of digitalisation has definitely been at the top of companies’ agendas. At the same time, however, the dangers of cyberattacks are also increasing. In many areas, we are only at the beginning of the technological possibilities. Those who lose touch here will lose competitiveness. As of today, we see the main drivers as follows:

  1. Increasing signs of scarcity economy.
  2. Accumulation of problems in the supply chains of many companies.
  3. Increase in global tensions.
  4. Uncertainties in the energy supply in the coming years until the complete conversion from fossil to renewable energy sources.
  5. Ongoing climate change.
  6. Increasing digitalisation is leading to new disruptive technologies in the market.
  7. Short-term establishment of a new hybrid working world.
  8. Ongoing skills shortages require new approaches to dealing with them.

Each of the drivers of the turnaround identified here would in itself have a considerable influence on the orientation of companies. But it is precisely the sum of the influences that will massively change companies.

How can companies and managers respond to this?

Managers are now challenged to strategically question or even reposition their company. A primary goal is to strengthen a company’s resilience in order to cope with temporary shocks in the value chain. Not only internationally active corporations, but also small and medium-sized enterprises now need an adapted strategy for the coming years. And not as an end in itself, but for your employees, customers and investors. This is because a change of era always creates uncertainties among those involved, which are best countered with clear strategic corporate management.

We advise leaders not to waste time. Start strategically repositioning your company now. You don’t need a big throw to do that. It is important that you define the strategic guard rails at the beginning. Based on this, you will develop the corresponding initiatives. So they take an iterative approach instead of just holding a one-off strategy workshop. It is important that you document your strategic work results, because only then will they be concrete, understandable and lived by everyone in the company. Involve your own employees as well. They know your company and the market environment best – even better than some external consultants. They often already have an idea of what concrete solutions and measures could look like. In addition, changes in which the own employees were involved are also supported. You can also read more about this in our blog article Concretising a strategy for successful implementation.

Our detailed white paper on the turning point in strategic corporate management

We have described all the above influences in detail in a white paper. To this end, we have compiled a large number of strategic recommendations for action. Here you can download the document free of charge (German version).

Whitepaper: Changing times for corporate governance

Free whitepaper

If you want to start creating your strategy now, the ConWISE platform can support you with the individual steps. Test the easy-to-use application with a free user account. If you have any further questions, please do not hesitate to contact us.

Do you know the 5 most common mistakes in a SWOT analysis?

/by

SWOT is the abbreviation for Strength, Weakness, Opportunities and Threats. In German: strengths, weaknesses, opportunities and threats. It is one of the best-known and most frequently used management methods. Its strength lies in its simple application for many topics in the company. A simple 4-field matrix represents the grid for the SWOT analysis. Despite this simple application, errors can creep into the application. You should know and avoid these. Only then does the SWOT analysis unfold its huge potential in everyday business life.

The SWOT analysis and its importance

The SWOT analysis was developed in the 1960s at Harvard Business School for use in companies.

Even today, the SWOT analysis is one of the best-known and most frequently used methods in the context of strategic planning. The abbreviation SWOT stands for Strengths, Weaknesses, Opportunities and Threats.

With the help of the SWOT analysis, strengths and weaknesses of a company, a department, of processes or of products and services can be found out. This corresponds to an internal company analysis. The method also compares the opportunities and risks in relation to the environment and the competition ( see also the definition of a SWOT analysis ). At the same time, it covers an external environmental or environment analysis. Both analysis types are mapped in a 2×2 matrix. See also the figure below:

SWOT Template

The classic SWOT analysis

Incorrect application of the SWOT analysis

In the end, the success of a management method is measured by concrete and goal-oriented measures. In contrast, the SWOT analysis first of all describes conditions inside and outside the company. The success of a SWOT analysis can only be seen in the consequences and strategies derived from it, or their implementation. See also our article ” Successful specification of a strategy “.

When using the actual SWOT analysis, you often come across the following 5 errors:

  1. Lack of comparison with the competition
  2. Unstructured derivation of consequences
  3. Unilateral focus during analysis
  4. Lack of topic and goal orientation
  5. Incorrect order of application

In the following, we will go into more detail about these errors and show how they can be prevented.

Lack of comparison with the competition

When analyzing strengths and weaknesses, this should always be done in direct comparison with the competition. A strength or a weakness that also applies to all competitors at the same time can be neglected. The easiest way to proceed is to ask yourself the question: “What are the concrete strengths or weaknesses compared to the 3 main competitors?”. Make sure that not only direct competitors are considered, but also potential new market entry candidates are relevant. For example, an insurance company should not only keep an eye on its direct competitors, but also on platform providers such as Amazon, Alibaba, etc. These have already proven several times that they can expand their market power to related company fields (example: Amazon discovers the insurance business of n-tv, 2021).

Unstructured derivation of consequences

As mentioned, the analysis results of the four SWOT fields only describe a state. For successful management, the derived consequences are now decisive. Avoid the mistake of only looking at the weaknesses one-sidedly or using the opportunities immediately as a strategic guideline. In practice, a structured approach called the TOWS matrix has proven to be advantageous here (see also the TOWS method description ).

The TOWS Matrix is based on a classic SWOT analysis. The results of the company’s strengths and weaknesses and the resulting opportunities and risks are compared in a matrix. Each combination of SWOT fields results in a specific strategic thrust:

  • S trengths & Opportunities result in measures aimed at maximum success .
  • W eaknesses & Opportunities lead to activities that make it possible to catch up with the competition .
  • S trengths & Threats lead to actions to defend the achieved success .
  • W eaknesses & Threats derive actions to secure existence .
From SWOT Analysis to TOWS Matrix

From the SWOT analysis to the TOWS matrix

Unilateral focus during analysis

Distortions in the analysis often occur, especially when a well-trained team or department gets together to carry out a SWOT analysis. In doing so, individual fields of the SWOT matrix are focused one-sidedly by basking in the strengths or, in the case of weaknesses, by targeting those that come from others. Again and again one finds that a previously formulated hypothesis should be supported by the results of the analysis. The view of strengths, weaknesses, opportunities and risks is therefore perceived to be very limited.

This distortion of results can also creep in if superiors with strong opinions or patriarchal managers are actively involved in the elaboration. The participants then often orientate themselves on their statements in order to avoid any contradictions or resentment.

How can this be prevented?

The group of participants should be as heterogeneous as possible. So they come from different areas and/or belong to different hierarchies. Women and men should also deliberately participate in the analysis together, since their perspectives on things can be different. It often also helps when outsiders such as consultants or suppliers who are able to express independent opinions are involved. Even an independent and anonymous implementation of the SWOT analysis, as made possible by the digital consulting platform from ConWISE, leads to open and unbiased results.

Lack of topic and goal orientation

“Let’s do a quick SWOT analysis!” Managers can be heard shouting. And the flipchart or whiteboard is divided into a 4-field matrix and off you go. Then a confused collection of points takes place. Although a lot of content comes together, the consequences derived from it are not satisfactory in the long term. The problem with this is that the measures follow no recognizable direction. This can be prevented by narrowing down the subject area for the SWOT analysis at the beginning and writing it down. The topic must always be visible or visible to every participant.

The topic can include a specific product, service or process. Make sure that the description is as specific as possible. Example: instead of “SWOT analysis in the service area”, it should read “SWOT analysis for the introduction of a new service in the after-sales area”.

The specific naming of the topic or goal also helps you to carry out the environment analysis, i.e. to record the opportunities and risks. This is because the influencing factors to be considered can be almost infinite. There is a multitude of political, economic, social and technological developments. The solution is simple: focus on the influences that are gaining in importance because of the named topic/goal.

Incorrect order of application

We recommend that you start with the internal analysis – the company – and thus go into the strengths and weaknesses first. These can usually be formulated and described very specifically. You get fast results in the analysis and are then motivated to dedicate yourself to the external analysis – the environment. It also helps you to limit the external influencing factors if necessary, in that the strengths and weaknesses that have already been recorded serve as a guide.

In the area of chances (opportunities), these are often described as concrete options for action. However, this derivation of strategic options should only take place in the next step of the SWOT analysis. During the analysis, the observations of the environment are in the foreground. Example: “Participation in a startup to develop a new AI application” (specific option for action) versus “Many new startups in the field of AI” (general description of the market environment with potential opportunities).

In a broader sense, an incorrect order of application can also apply to the timing of the SWOT analysis. This should always serve as a starting point for an actual strategy development and not vice versa. Otherwise, the analysis would take on an alibi role in order to legitimize a predetermined strategic direction. This also applies to activities that have already been carried out and whose justification is only provided by a subsequent SWOT analysis.

Conclusion

Although the SWOT analysis has been used in almost every company worldwide for decades, errors can still creep in today. At first glance, this is often not even recognizable, because the SWOT analysis usually brings up a large number of points. In terms of quantity, the management and the participants can usually be very satisfied. Mistakes in the application of methods are noticeable: when it comes to the qualitative implementation of the findings. The results fall short of expectations. This becomes particularly clear when the results are re-evaluated after some time has passed.

If those responsible and initiators of the analysis know the errors shown here and avoid them accordingly, the SWOT analysis is and remains one of the most effective tools in strategic planning. A simple way of preventing the errors listed from creeping in in the first place is to use the respective SWOT and TOWS frameworks on ConWISE’s digital consulting platform.

The ConWISE team will be happy to show you exactly how this works during a non-binding appointment. Contact us!

Specification of a strategy for successful implementation

/by

In the second part of our series on strategy creation, we dealt with how you can start concretizing your strategy based on the vision and mission as well as the environment and self-analysis. Building on that, let’s take a closer look at how you can flesh out the strategy .

From actual to target

The strategy aims to transform the company from the current state to a future state . If you have already followed the first two posts in our series, you have already defined it with the help of vision and mission.

If you now look at the current situation of your company, you will find that adjustments are necessary in various areas in order to achieve the set goal. The previously performed environment and SWOT analyzes will also help you. With their help, you can assess where adjustments are necessary.

The following section is intended to illustrate this using an example:

Example – A fashion manufacturer

As a fashion manufacturer with a business model that has so far been heavily focused on retail, you want to play a leading role in online retail in the future. In accordance with your vision, you want to become the most-worn brand in Europe with sustainably produced fashion.

Your company has several well-known brands in its portfolio and is well positioned in terms of production and logistics. This has already put you at the forefront of market shares in several countries.

However, you have weaknesses when it comes to online presence. Furthermore, the increasing change to online business represents a high risk for your current business.

As you can see from the environment analysis, your competitors in online trading have increased their sales considerably in recent years. In terms of brand awareness, however, they lag far behind your company. However, your brands are losing ground in customer perception compared to those of the competition.

The online strategy is to be concretized

The online strategy is to be specified

Strategic fields of action in the case of the fashion manufacturer

The factors mentioned above already result in a number of fields of action that need to be tackled in order to achieve the vision.

In marketing , the existing brands need to be modernized. This can also mean that individual brands are removed from the portfolio in order to focus on more promising ones.

In addition, the marketing channels must be coordinated with increasing online business. This also requires that the IT systems are provided to manage the goods and marketing materials digitally and to play them out in different channels. This can be done, for example, using a digital asset management system (DAM).

At the same time, new skills are required from employees. The HR department will provide training courses to ensure that marketing staff become more familiar with the needs of online business. New hires are made in IT for the provision and operation of new systems.

Strategic Goals

In the next step, you define strategic goals for the specified fields of action. These goals are intended to determine what is to be achieved specifically in the fields of action for the strategy’s observation period (3-5 years).

For the fashion manufacturer example, these could be:

field of action Strategic Goals
HR – building online skills
  • Extended training offer for online marketing
  • Creation and filling of three new positions in IT to set up and operate the online channels
IT – Technological basis for online business
  • Development and operation of the online channels
  • Creation of an infrastructure for the fully digital handling of product information
Marketing – modernization of brands
  • Consolidation of the offer of the two weakest brands
  • Start of a campaign for each of the two top brands
Marketing – focus on online channels
  • 100% growth in business on the top 10 online sales platforms
  • 30% growth on their own online platform

Be sure to define the goals SMART :

  • Specific – the goal should be specific
  • Measurable – the goal is defined quantitatively and/or qualitatively using defined measurement parameters
  • Attractive – the participants should have an interest in achieving the goal
  • Realistic – the goal should be achievable within the given timeframe with the available resources
  • Time- bound – specify the time when the goal is to be achieved

In this context, the OKR method should also be mentioned, which has gained enormous popularity in recent years.

With their help, the goals (objectives) are operationalized via concrete results to be achieved (key results). Implementation is then monitored and controlled by regular reviews of target achievement. This review can take place, for example, once a quarter. Visit our Knowledge Base for more information on this and other methods.

road map

After you have defined the strategic goals, you define the activities that are necessary to get from the current starting point to the desired target state. This often results in dependencies in terms of content or time. In addition, you will probably plan with limited resources that need to be coordinated.

Roadmap for the concretization of the strategy

Roadmap for the concretization of the strategy

You then arrange the activities according to their priorities and the dependencies mentioned. You then map these as shown above for each field of action on a roadmap diagram . This then defines your company’s path to achieving your goals.

The roadmap then serves as the basis for project portfolio management . In it, you define the relevant initiatives, provide them with budgets and monitor their implementation. This creates the transition to a successful and sustainable implementation of your strategy.

In real life, strategy is actually very straightforward. You pick a general direction and implement like hell.

— Jack Welch

Conclusion

The concretization of the strategy is a crucial step in the creation of the strategy . If you don’t do this, strategies are often too vague and not applicable in everyday work. In many cases, employees then perceive the strategy as “too aloof”. In many cases, this is followed by the fact that they completely ignore the strategy (according to the motto “again a new strategy, but nothing changes anyway”).

Hence our advice: Define your strategy based on a motivating vision and mission , strategic goals and concrete initiatives for the coming months and years. Then you have an excellent tool to lead your company successfully into the future. You can create this basis with the help of the ConWISE platform. Contact us.

From mission and vision to strategy

/by

In the previous blog post we presented the definition of vision, mission and values in the context of strategy creation. This article is now about how we proceed to set up a strategy – i.e. the plan for the next few years.

The goal is the way

Our target state is defined by the vision and the mission. We have a clear idea of where we want to go. The task now is to define the path from the current point of view to this goal. And as so often, there can be several ways.

For example, imagine you want to ride your bike from one place to the next. There is a short trail but it is a dirt road over a high mountain. Or there is a long way that is well developed with a bike path and does not contain any steep parts, but is considerably longer. Which one do you choose?

Your choice could depend on several parameters:

  1. First of all, which bike you have. You probably don’t want to ride a dirt road on a road bike, but if you have a mountain bike this could be an alternative.
  2. Then the choice also depends on your fitness. If you are well trained and love a challenge on the mountain, you might choose the first route to get there faster. If you want a more relaxed ride that can take a little longer, the second variant is more appealing.
Flat around the mountain or right over it?

Several paths lead to the goal

You see, with the same starting point and the same goal, there are different ways to get to the goal. And the choice of which path you choose depends on environmental factors on the one hand (gravel path or developed bike path, mountain or flat route) and on the other hand on yourself (your level of fitness).

It is similar in companies when they formulate a strategy. In this case, too, environmental factors are included (e.g. political environment, competitors and customer interests) and one’s own performance (available resources, skills, strengths and weaknesses) is considered.

In what environment do we want to achieve our goal?

There are a variety of methods for analyzing a company’s environment. For example, there is the PESTLE method (environmental analysis), whose name is derived from the first letters of the areas to be considered: Political, Economic, Social, Technological, Legal, Environmental . It is immediately obvious that these areas have a significant impact on a company’s scope for action.

In the last 10 years in particular, technological developments have opened up completely new market opportunities, but at the same time have made their application in many areas absolutely necessary in order to be able to continue to exist on the market. It is becoming apparent that in the next 10 years, in addition to the continued rapid development of technologies, environmental protection will also have a significant impact on the actions of companies.

Analysis of the environment

Another commonly used approach analyzes the following areas:

  • Customers – What are the current needs of your (potential) customers and how will they develop in the coming years? Think about it in the position of your customers.
  • Partners – Which companies do you work with (e.g. also suppliers) and what are their current and future drivers?
  • Technologies – Which technologies are currently available and are you already using them? Which new technologies have the potential to change your market or the processes in your company in the coming years?
  • Market – What are the trends in your specific market and how will the market develop? Will your services continue to be in demand on the market in their current form, or are adjustments necessary?
  • Competitors – Who are your main competitors and what are they doing to improve their position? Could there be new competitors who may not have played a role in your industry in the past?

After analyzing these areas, you will have an overview of how your environment is likely to develop over the next few years. With the help of this information, in the next step you can analyze what influence these factors have on your company and what opportunities and options for action may result from them.

SWOT analysis

When you look at your company, it is helpful to identify opportunities and threats in addition to the classic analysis of strengths and weaknesses. The SWOT analysis does exactly that. The advantage of this is that, in addition to looking at the company itself, its environment is also included in the evaluation.

  • Strengths – The strengths of your company
  • Weaknesses – The weaknesses of your company
  • Opportunities – The opportunities that will present themselves to you in the previously analyzed environment over the next few years.
  • Threads – The risks or threats likely to threaten your business over the next few years.

It is important with this procedure that you strictly separate between

  1. the strengths and weaknesses on the one hand, which arise from within your company and
  2. the chances and risks on the other hand, which are to be found in the environment of the company . The environment analysis from the previous step will also help you.

Examine the above points in the context of the previously defined mission, vision and values. Areas that are not relevant to the implementation of your mission are hardly relevant in a weakness analysis. Likewise, strengths will be of no use to you if they do not contribute to the achievement of the vision.

Be critical when analyzing and try to examine hyped topics in detail to see whether they really bring the promised advantages for your application. For example, many of the promises about blockchain that have been loudly communicated in recent years have turned out to be largely exaggerated up to now. In the field of artificial intelligence, on the other hand, there are many useful areas of application. Therefore, this topic should be analyzed more closely in most companies for its possible benefits.

Identify strategic fields of action

After you have analyzed the environment and your company within this environment, it is time to draw first conclusions. Based on the results of these analyses, you can now define strategic fields of action in which you want to become active. Fields of action arise, for example, if

  • You recognize new potential in the market, which your company should use with its strengths in the future
  • You want to fix weaknesses in your company in order to remain competitive, or
  • You identify new technologies that could make your company more efficient.

The strategic fields of action specify the topics that need to be worked on in the coming months and years in order to implement your mission.

Next Steps

By defining the strategic fields of action, you have taken another important step in defining your strategy. Some companies remain too vague here and subsequently have difficulties operationalizing their strategy. Therefore, in the next part of our blog series on strategy creation, you will learn how to specify the necessary steps to implement the strategy and set up a plan for the next few years.

If you want to start creating your strategy now, the ConWISE platform can support you with the individual steps. If you want to know how this works, just contact us . We would be happy to arrange a personal demo appointment with you.

Successfully develop an AI strategy

/by

Do companies actually need an AI strategy? It is probably less a question of “if” and more of the question of when it is too late to deal with AI. Developments in this area are rapid. In every company there are activities that can be automated and are based on an “if – then” logic. The fields of application of artificial intelligence range from data analysis and chatbots to new services, products and business models.

So, an AI strategy is essential to ensure your business is using AI strategically – in a way that ties directly to business goals. Developing an AI strategy means identifying how your company can best use AI. It is irrelevant whether the result represents an independent AI strategy or whether the findings are incorporated into the corporate strategy. It is important that companies think carefully about the use of artificial intelligence in their company.

Below you will learn what elements an AI strategy includes and how best to proceed to develop an AI strategy for your company.

The development of an AI strategy in the company

Below you will learn what elements an AI strategy includes and how best to proceed to develop an AI strategy for your company.

AI strategy for companies

Development of an AI strategy with ConWISE

Step 1: Set AI goals and define use cases

As a first step, you should think about what goals you want to pursue with the use of artificial intelligence in the company. And what benefits the company should derive from AI. The result is an AI prioritization and the definition of concrete use cases for the company.

Possible AI goals could include:

  • Develop new intelligent products or services
  • Make business processes smarter
  • Automate repetitive business tasks
  • Automate manufacturing processes

The above goals are often implemented in the context of the following AI application fields:

  • Use of sensors for the “Internet of Things (IoT)”
  • Predicting Outcomes
  • Decision Support / Augmented Intelligence
  • Pattern recognition by highlighting non-obvious data relationships
  • Personalized customer interaction
  • Job and task automation
  • Big Data Analytics
  • behavioral analysis
  • Visual recognition and classification
  • Speech recognition and natural language processing

Step 2: Prioritize use cases

Experience has shown that a large number of possible applications emerge from the first step above. These now need to be prioritized. You should concentrate on the top 3 applications. In addition, you can already identify so-called quick-win initiatives in this step. These are short-term AI projects that can help you demonstrate the value of AI in a relatively quick, easy, and inexpensive way.

Step 3: Identify requirements

Next, take on the core AI requirements. AI use cases usually have some common themes that need to be considered or that must be met as a prerequisite. Your task is to identify the challenges in order to close any gaps in the company.

The following topics are to be considered in particular when creating an AI strategy:

  • Data management
  • Technology and infrastructure
  • AI know-how
  • Change management aspects when introducing AI.

The following questions must be answered for each topic:

Data:

  • What data will you need to realize the selected AI initiatives?
  • How will you get the data you need?
  • Do you have all internal data available?
  • Do you need external data sources?
  • How structured is the available data?

Technology and infrastructure:

  • What are the software and hardware requirements for your AI initiatives?
  • To what extent does the existing IT help in collecting, storing and processing data?
  • How is data currently provided?
  • How are results from data analyzes communicated?

AI know-how:

  • What are the skill and capacity requirements involved in your AI initiatives?
  • What can be covered within the company itself and what AI know-how must be purchased from outside?

Change Management:

  • What are possible prejudices and fears about the use of AI?
  • What effects does the introduction of AI solutions have on the specific workplace and work processes?

Step 4: Close gaps

After the requirements are clearly outlined and you have identified the gaps, you can start thinking about possible activities. What does it take to correct the respective grievances? They proceed in the same way as the main topics of the AI listed above. As a result, you receive a list of initiatives that you categorize in the next step.

Step 5: Create an AI roadmap

Not all initiatives are created equal. Also, some projects can be implemented quickly, while others take longer. Finally, there may also be dependencies between initiatives that you need to be aware of. A roadmap will help you with this, in which you can arrange the individual projects in terms of time. From short-term to medium and long-term AI projects.

Conclusion when creating an AI strategy

The way shown here to create an AI strategy is certainly only the first step in strategically dealing with AI. It at least provides the framework for how you want to use AI and what conditions are to be created where. In particular, developments in the field of artificial intelligence are progressing so quickly that the results should be checked regularly and adjusted if necessary. In this environment in particular, an agile approach is advisable.

The digital consulting platform from ConWISE is ideal for drafting initial concepts for the AI strategy together in the company. You will work out the results step-by-step along the development path shown above. New AI applications can also be quickly taken into account and incorporated into the AI strategy.

The ConWISE team will be happy to show you exactly how this works during a non-binding appointment. Contact us!

How do you create a strategy?

/by

A classic strategy should specify goals to be achieved for a time horizon of approx. three to ten years and show how these goals can be achieved. For many companies, this will sound like an impossibility. Who can plan so far in advance these days? How realistic is it that a plan, once created, can remain stable for such a long time? The answer is quite simple: not at all!

Most people overestimate what they can achieve in a year and underestimate what they can achieve in 10 years. — Bill Gates

Planning in an uncertain environment?

As Bill Gates already indicated in his quote, significant developments can take place over long periods of time, for example five to ten years. Businesses can grow from startups to multi-billion dollar giants while formerly established giants fade into obscurity.

However, planning for such long periods of time is usually not very helpful. In the so-called VUCA world (volatility / volatility, uncertainty / uncertainty, complexity / complexity, ambiguity / ambiguity), the framework parameters change too quickly and too frequently for static planning to be of any long-term benefit. So why create strategies?

In order for the major changes discussed above to take place, there must first be an idea of what is to be achieved. Only when this idea, this conception of the future situation, offers orientation can a company achieve a promising future in the long term, despite the constant change in environmental conditions.

If you don’t know the port you want to sail to, no wind is the right one for you. – Lucius Annaeus Seneca

Agility as an answer

Since agility has been receiving more attention in companies, one might get the idea that strategies have had their day and that an agile approach would be sufficient. After all, always driving on sight and constantly adapting to changing conditions would be ideal for keeping a company on the ideal path in a fast-moving world.

But what is this path? Even if agility is a basic requirement for being successful in the market in most industries today, there must first be a clear idea of where the company should be headed.

Target

Only those who know the goal can achieve it.

Mission, vision and values

Every company needs a kind of fixed star that ensures orientation for all employees over a longer period of time. In this way, a company can definitely react to the immediate situation in the environment using an iterative approach and actively shape its future. The fixed star creates the basis for a common understanding in the workforce of what the general goal is and how the cooperation of those involved should look like.

This fixed star defines the mission, vision and values of a company. If these are well chosen and clearly described, they serve – even in an uncertain environment – as short and long-term orientation for the company or a team.

In this way, the daily pending decisions that have to be made in the company can be tested against its mission, vision and values. In many cases, the result of the decision can then be derived without having to discuss it in detail in each individual case. This is much more efficient and ensures that the company as a whole steers in the right direction.

Mission – What do we want to achieve?

The mission describes the services offered and the purpose of the company. It is formulated in it

  • what the company wants to achieve
  • who it wants to support and
  • why it does this.

A mission is formulated in an action-oriented manner, i.e. it describes what an organization undertakes to achieve the stated purpose. This distinguishes it from the vision, which defines a desired goal state.

Example of a mission

An example of a successful mission is that of Tesla:

Tesla’s mission is to accelerate the world’s transition to sustainable energy. – Tesla, Juni 2021

A not so well known example of a good mission comes from the Dubai Roads and Transport Authority (RTA):

Develop & manage integrated and sustainable roads & transportation systems at a world-class level, and provide pioneered services to all stakeholders for their happiness – Dubai RTA (2016)

See the next section for the associated vision. Together they give a good picture of the respective meaning of mission and vision and how they interact.

When creating your mission, you can use the following guiding questions:

  • what do we do
  • What is the benefit of our actions?
  • Who are we doing this for?

When answering these questions, be sure to hit on the key points that make your company special.

Vision – who do we want to be?

The vision defines a picture of the company in the future and explains where the company wants to be in a few years. The time horizon for the vision is usually 5 to 10 years. This is a period that is still reasonably “tangible”, but at the same time there is not too much uncertainty about the framework parameters that will then prevail. Of course there can always be surprises. Or would you have thought it possible in 2005 that 10 years later most of your friends would be using smartphones and billions of people would be communicating with each other on social networks?

In order to be inspiring and motivating, the vision should be formulated ambitiously, but on the other hand it should also offer a realistic chance that the goal can be achieved. Ideally, the vision offers employees such an interesting or even fascinating outlook on the future of the company and thus their own future that their motivation is significantly increased.

So think carefully about how you formulate your vision and be sure to take a critical look at it from the point of view of your employees.

Example of a vision

The Dubai RTA vision is a good example of a short but also clear and motivating vision:

Safe and Smooth Transport for all – Dubai RTA (2016)

In combination with the mission presented above, it becomes clear that the goal to be achieved is defined here. The mission appropriately defines what is being done to achieve that vision.

Questions to review the vision include:

  • Is the vision inspirational, not quantitative?
  • Is the vision focused and clearly formulated?
  • Is the vision ambitious, but can it be realized with special efforts?
  • Is the value created by the company clear for its environment, possibly even for society?
  • Is it clear who the company is creating value for?

Values – Which values are important to us?

A company’s values are one of the cornerstones of its culture. By explicitly emphasizing and prioritizing certain values, the company management determines

  • how to deal with each other and how decisions are made within the company and
  • how its employees (and thus the company) should behave towards the outside world.

It is very important that the values are not only written down and communicated, but above all that they are (exemplified) lived. As a role model, managers in particular are of particular importance. Any action or decision should be critically questioned as to whether it goes hand in hand with the defined values. If this is not the case, the employees notice this quickly and no longer take the values seriously.

Culture eats strategy for breakfast. – Peter Drucker

However, if the values are visibly lived, they are the driving force to carry out the mission effectively. Provide employees with orientation for their daily activities.

example for values

The Dubai RTA has defined the following values:

Corporate reputation
Pioneering & Competitiveness
leadership and teamwork
Happiness and Positive Energy
innovation and creativity
-Dubai RTA (2016)

These values form the basis for daily action to implement the mission. In this case, they are more “classic” and could also apply in this form to other companies.

An example of a more modern definition of corporate values can be found at Airbnb:

Champion the Mission – We’re united with our community to create a world where anyone can belong anywhere.

Be a Host – We’re caring, open, and encouraging to everyone we work with.

Embrace the Adventure – We’re driven by curiosity, optimism, and the belief that every person can grow.

Be a Cereal Entrepreneur – We’re determined and creative in transforming our bold ambitions into reality.
– Airbnb 2021

If it fits the culture of the company, then – as can be seen from the example of Airbnb – a value can be formulated with a wink.

Defining the values in the company is often not easy, especially if you don’t just want to fall back on the classic values (teamwork, innovation, motivation, …). A good approach is to look beyond the company and, for example, also include the private context.

For example, most people have certain positive experiences from the past in their heads from which they can derive values. In line with the above example, some employees may have had particularly nice experiences on vacation due to the outstanding hospitality of the hosts. If you then analyze which values contributed to making this experience so special, this could lead to the above example: “Be a Host – We’re caring, open, and encourage to everyone we work with.”

Conclusion: mission, vision and values as the basis of the strategy

As soon as the cornerstones of the future orientation of the company have been defined via mission, vision and values, further specification must be made so that the strategy can also be operationalized. We will address the relevant topics in another blog post .

If you want to start working out the cornerstones of your strategy straight away, simply use the ConWISE platform. Here you will be guided step by step through the creation of the strategy and receive assistance as if you had a consultant at your side. Contact us!

Image credits People vector created by pch.vector – www.freepik.com