Final Pre-Implementation Strategy Review
It is clear that the strategic planning process can be time-consuming and requires a substantial amount of managerial resources. Once the mission and strategy statements have been completed, and the goals and objectives have been established, the senior managers of the relevant business unit (or the firm as a whole in the case of corporate-level strategies) will obviously be eager to push forward. Before proceeding, however, it is wise to have an objective, independent group composed of members that have not been involved in the strategy formulation process conduct a final pre-implementation strategy review. This type of approach, which can also be used for specific “bet-the-company” transactions, introduces a “devil’s advocate” to the process in order to ensure that full consideration is given to the tough questions that need to be recognized and answered before the firm commits its resources to a particular strategy. While it is not surprising that the strategy developers will often resist this approach, their cooperation and understanding can be solicited by assuring them that the members of the group are not interested in managing their business but rather are looking to gain a better understanding of how decisions have been made and the assumptions that are being used in developing the strategies. The personal agendas of the reviewers and the strategy developers should not be allowed to interfere with the review process and the focus should remain on determining whether the proposed strategy is the best of all feasible alternatives even if it includes risks and minor defects that can only be recognized and not totally overcome.
The review group should always be led by someone who has no direct stake in the outcome of the review and is not part of the management hierarchy involved with creating and executing the strategy. In this case of a review of a business unit strategy this means that the group leader should be a senior manager of another business unit. Corporate-level strategies should be reviewed by groups overseen by an independent member of the board of directors with proven experience in strategy development who understands the overall organization of the company. Group members should have a knack for being able to pose questions that focus specifically on the assumptions used in developing the proposed strategy since it is important to ensure that a wide range of possible scenarios have been considered. Group members should also be reminded that it is not their role to come to conclusions and advocate their own answers to the questions that they raise, nor should they seek to develop their own alternative strategies.
The questions posed by the review group will obviously depend on the particular strategy under consideration; however, questions that probably should be asked in almost every instance include the following:
Is the strategy realistic and is it likely to produce long-term success for the business unit and/or the firm as a whole?
Is the strategy constructed in a way that it will withstand public scrutiny and reasonably anticipated turbulence in the relevant business environment?
Have the developers of the strategy taken past experiences and failures into account in assessing the likelihood of future success for the strategy?
Does it appear that the members of management hierarchy involved with creating and executing the strategy have had access to all relevant information, including dissenting views?
Has consideration been given to the impact that the strategy will have on existing businesses?
Have the strategy developers considered all reasonable options before settling on the specific strategy under consideration?
Do the advocates of the strategy demonstrate sufficient confidence in its likelihood of success and would they be willing to risk their personal resources on the ultimate outcome of the strategy?
The work of the review group should be respected and the managers associated with the development and execution of the particular strategy should be required to prepare some sort of formal response to the review even if it is ultimately decided to move forward with the strategy in essentially the form it was originally presented for review without significant modification to take into account the findings of the review group.
The discussion in this post is based on P.B. Carroll and C. Mui. “7 Ways to Fail Big” Harvard Business Review, September 2008, 82-91, 86-87, and this material will appear in Fall 2008 in Alan Gutterman’s publication entitled “Business Transactions Solutions” and is presented with permission of Thomson/West. Copyright 2008 Thomson/West. For more information or to order call 1-800-762-5272. Alan Gutterman is the Founder/Principal of Gutterman Law & Business (www.alangutterman.com), which publishes the Emerging Companies Blog and the Business Counselor Blog, and a Partner of The General Counsel LLC (www.thegeneralcounsel.net).