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Most companies’ approach to strategy involves the mistaken assumption that a predictable path to the future can be paved from the experience of the past. In the turbulent business environment we face today, companies must let go of the notion that strategic outcomes can be predetermined and that enduring competitive advantage can be defined and achieved.
Instead, we define strategy as a coherent and evolving portfolio of initiatives to drive shareholder value and long-term performance. This change in thinking requires management to develop a “you are what you do” perspective as opposed to “you are what you say.” In other words, companies are defined by the initiatives they prioritize and drive, not merely by mission and vision statements.
Adapting to unknowns
Strategy approached in this way is by its very nature more adaptive and less dependent upon “big bets.” A carefully managed portfolio of initiatives is balanced across activities of adapting the core businesses to meet future challenges, shaping the portfolio in an ongoing way to respond to a changing environment, and building the next generation of businesses. By creating a portfolio of initiatives around a unifying theme, reinforced by brands, value proposition to customers, and solid operational skills, a company can successfully set the stage to drive shareholder value. Of course, the successful portfolio of initiatives must be actively managed as a top priority of senior management, with the individual initiatives carefully guided and driven along the way. This approach to strategic planning is ongoing, as opposed to a yearly exercise, and represents an integrated effort across the top executive team, as well as business unit and functional leaders. As initiatives are implemented, the executive team must ensure the organization is ready for the change. The strategy must be communicated to various stakeholders, and the pace of implementation must be determined.
In pursuit of growth, leaders are a grappling with a complex set of forces reshaping their businesses:
- Scale and reach. Consolidation continues to drive media deals and partnerships either through deregulation, the need to achieve national or global scale, and to optimize efficiencies.
- Rising talent costs. In an increasingly fragmented marketplace, talent remains the most precious asset and consolidating media businesses must continue to ensure that they have the structures and culture to promote creativity and innovation.
- Operations and execution. Whether seeking to retain customers, enhance subscription revenues, or retool advertising sales for a greater share of the pie, media & entertainment companies should focus on developing the capabilities needed to win in the marketplace.
- Technology. No longer a back-office tool, media CEOs are discovering that effective IT strategy can drive efficiencies through the organization and enhance existing products.
- Digital business models. Content businesses have been in a “make or break” struggle to create viable interactive businesses that cater to consumer expectations and mitigate the growing piracy crisis. Content companies, distributors, and hardware manufacturers need to collaborate to devise legitimate alternatives to file-swapping that offer at least the same choice and access to what is available illicitly on-line, and are superior in other ways such as safety and quality.
Sigma Creative helps entrepreneurs build a solid managerial foundation from which the rest of their business can expand and grow. We construct organizational development blueprints for young firms searching for a solid structure to build upon, and assist in constructing business plans for fledgling companies to improve their chances of obtaining venture funding. Sigma Creative offers insights and ideas for how small businesses can discover and sustain their competitive advantage in today’s business landscape where a lack of continuous and constant innovation can be fatal. Furthermore, we offer expertise in other areas such as profit modeling to assist small businesses in their future planning, especially in today’s market where heavy emphasis has been placed upon a company’s ability to show profits rather than pure growth.
To find out more about our management consulting service please feel free to contact us or submit a request for proposal.