Wednesday, April 22, 2009

Strategy – a fallacy?

Much has been said and written about strategy and how companies rise or fall as a consequence of decisions taken (accidentally or intentionally) over a period of time.

If strategy was a science it could easily be taught and cracked and theorised and as a consequence of this no company would ever falter because enough evidence and data are available to learn from. Yet – companies continue to make mistakes over and over again and I am yet to find a strategic model that is generic enough to follow that solicits enough attention.

The fact remains that our spectrum of study encompasses the study of a few companies that business schools have tried to analyse over a period of time, and have marred the hypotheses with the use of jargon that very few understand. The environment is ever changing and every successful strategy has a hundred failed that are embedded in the recesses of that success.

Porter and Barney have only reiterated what has been the tenet of business over thousands of centuries. As early as 3000 years ago, Chinese were believed to be businessmen of commendable calibre.

If corporations worldwide just follow 5 simple rules – study of strategy could perhaps become more meaningful.

1. Keep costs in check consistently. Irrespective or good or bad quarterly results. (read: let prudent judgement not be eclipsed by a temporary success).
2. Treat your customers like God.
3. Treat your employees like you treat your family members or your children.
4. Develop a culture in your company where every employee asks himself a question before spending every single penny. ‘Would I spend it if this was my own company’?
5. Strive for a fair share of profits that are sustainable. Remember markets are efficient.

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