Too often my clients tell me that they want to be more involved in strategy.
My first question is ‘what do you understand by the word strategy?’
The answers vary across the board, none of which usually deal with what I understand to be strategy!
So here is a simple way of looking at what strategy entails:
STRATEGY IS ABOUT WORKING ON THE BUSINESS INSTEAD OF WORKING IN THE BUSINESS.
Simply put it’s about keeping a bigger picture view and being proactive.
It might also include the question – “where to from here?”.
Another good definition is:
STRATEGY IS ABOUT DEVELOPING THOSE THINGS THAT WILL ALLOW THE BUSINESS TO THRIVE INTO THE FUTURE.
Essentially it’s about doing the right things rather than doing things right.
Here are some questions that relate to strategy:
- Are the IT systems serving the financial needs of the company?
- Is the cash management process adequate enough to ensure the company does not run out of funds?
- Are adequate governance issues in place?
- What are the business risks and have they been considered and mitigated?
- What are the implications of Integrated Thinking on the business?
- What are the implications of the new IFRS discussion papers and when will they need to be implemented?
- What are the implications of changes to the Income Tax Act, Labour Act, Companies Act etc and how will they affect the business?
- Should the accounting function be centralized – substantial cost savings could result and hence motivate upgrading the IT systems?
- Should the distribution/warehousing function be outsourced?
- What of business intelligence – is the IT function giving meaningful information to better run the business eg: a daily Gross Profit report by division, by product or a stock aging report that doesn’t show returned stock as new?
- How can the sales forecasting be made more accurate?
But it is very important to remember is that you cannot work on the business if your basic financial information is coming out late and incorrectly. Your primary function is to have solid financial reporting systems that give the right answers ON TIME!
Until you have that, forget about strategy!
About the author:
Clive Kaplan, is a CA(SA) having studied at both Rhodes and UCT. With over 20 years experience as an executive director in both listed and unlisted companies. Clive offers a wealth of wisdom on both the people and business front. He is the CEO of Green Mind Capital. The company focuses on assisting executives, especially emerging young CA’s, maximize their potential and fast-track their careers. Clive has been involved with coaching and self development since 1994. Green Mind Capital is an emerging leader in the field of personal development and self-actualization.