RIYADH: In today’s dynamic and uncertain business environment which is characterized by increased competitiveness, fluctuation in commodity prices and a lack of credit availability, the need for a process that safeguards the fortunes of regional enterprises has never been greater. A properly crafted and executed strategy offers an invaluable platform to steadily mitigate risks and harness opportunities while marching on toward desired long-term success.
While business organizations in advanced economies have masterminded the strategy development and execution process, it’s unfortunate that many Middle East-based ones are somewhat unaware of such an invaluable tool or don’t care, since their focus remains on short-term gains, allowing the fate of their businesses to be left to the elements, influenced by the boom and bust in the local economy. Focusing on day-to-day tactics and short-term profit making initiatives, ignore the need to mitigate emerging macro-level risks, that may in extreme cases undermine the survival of their organization, and overlook necessity to steer business toward long-term sustained growth in profits and revenues.
Regional businesses are chiefly family-owned with prime focus on short-term tactics, the decision-making process is often centralized and controlled by the owners or their close relatives. Long-term plans for growth are rarely addressed and the need for investment in new technologies and talent development is almost non existence, as perceived by many decision makers to be waste of resources. Larger organizations may have a more mature and robust structure, but often rely on external reputable consultants to devise text-book strategies that usually remain on the shelves collecting dusts.
Senior executives lean toward viewing strategy development as theoretical or hypothetical activity that doesn’t add real value to their organization, and this is made worse by absence of accountable board of directors (BOD). However, the reality is that good leadership, championed by BOD and CEO, builds a strong foundation for sustained growth and profitability, a winning strategic objectives supported by a strategic plans. Successful organizations that do well in strategic planning adopt a structured and regular planning process that ensures the strategy remains a “work in progress” to accommodate changes in market conditions. Therefore, an organization that excels in strategy development and execution has a better chance to ride through challenging times and to realize success than an organization that neglects this critical area; a company without a strategy is like a ship without a rudder.
Organizations that have a clear “go to market strategy” are well-equipped to perform, in accordance with their leadership’s vision. It’s the responsibility of leadership to provide and communicate clear vision and set a framework for building a strategy that enables the organization to realize its revenue and profit as well as social objectives. Strategy can also be a vehicle to align all aspects of business, including stakeholders, toward a common goal to realize long-term corporate objectives.
In the absence of strategy, organizations suffer and valuable resources are wasted. Employees as well as management don’t understand the purpose of the organization or what the organization is trying to accomplish. Resources, both human and capital, are deployed in areas that may not add value to the organization’s core strategic objectives. Organization that do not have strategic alignment, tend to waste time and effort on activities that don’t create value to the organization’s overall bottom line success and/or enhance its leadership position in the market place.
It’s the responsibility of the organization’s leadership, with direction from the board of directors, to set overall strategic direction for the organization and ensure that the strategy is communicated and executed — This can be achieved through the creation of strategic function, lead by a senior executive, and supported by leadership system that addresses the strategy development, communication, execution and monitoring.
Much will depend on the resilience and ingenuity of regional businesses to survive and prosper. As we have already seen in dramatic fashion over the past few months in this region, even globally known businesses are constantly required to make sound business decisions in today’s ultra-competitive marketplace, or they will not be around for long. Hopefully, more successful policies and strategies will be put in place to improve the environment, and smarter companies will emerge as leading enterprises embracing global best practices.
(Yahya Shakweh is a vice president at Advanced Electronics Company, Saudi Arabia. The views expressed in this article are the author’s personal opinion.)
