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The Top 10 Articles of 2020: #10

Man in the Ivory Tower

A Business Strategy Guide for 2021: Part 1 of 5

It is no exaggeration that the COVID period has been the most intense term ever for developing business strategy. It is hard to find an unaffected business, a company that has not changed its current approach. Either they have adapted an existing business strategy that worked well before the pandemic to the situation at hand, or they simply built a brand new one. Many people think they understand this very complex profession. Others know that they don’t understand it, but they pretend to be professionals when crafting business strategy. And there are very few who deal with this subject as true experts.

Modern business strategies

People have always followed certain ideologies and doctrines when developing business strategies. Some of these theories are better known, and others less so. Good managers put a lot of energy into acquiring this knowledge, but the deeper they dig, the best among them will learn just how much they don’t know. After all, anyone can build a strategy. At least, anyone can build something that can be called a strategy. This term has become overused in the last few decades, so much so that it will even appear at least five times in the elevator pitch of someone trying to sell keychains. Naturally, it doesn’t sound too authentic anymore. The other extreme, of course, is when managers, in an attempt to prove their importance, their level of knowledge, talk about the topic at such heights that a sane person cannot even understand it.

Thus, “strategy” has transformed into a lofty theory, a vision behind the clouds that is invisible to the naked eye from the ground, which also raises questions of credibility, primarily concerning implementation. But let’s focus on professionals who really understand this profession. Those who have found the perfect balance between the so-called “ivory tower” and “manual labour”; they produce strategic theories that, on the one hand, can be put into practice immediately. Such an approach is tailored to a given company, and everyone understands at the appropriate level, so everyone can implement it, everyone can also supplement it with the proper professional input and experience. So, these professionals are constantly striving to ensure that strategic theories not only follow trends but dictate them. In this way, they can provide a market advantage to their customers. A real strategist needs to apply the latest business strategy research and developments, but at the same time mix them with the already proven, well-known methods. This is how you can guarantee success.

What makes a business strategy modern in 2020-2021? To understand this, we need to step back a little in time. This is because the systems that are now providing support had their foundations laid years ago. The more we move forward in time, the more we can observe that real people are playing an increasing role in business strategies. That is, the knowledge and mapping of individuals. First, the manager or top decision-maker, but also those responsible for implementing the plan within the organization, and finally, at the end of the process, the consumer. With the accelerating advancement of technology and the constant change that comes with it, human factors can make the difference between success and failure. For managers, private lives and business careers are almost completely merged. It is rare for a manager, a responsible decision-maker, to be able to leave their work at work, not open an email, not pick up the phone, or look at any social media. Of course, there are exceptions, but strategists do not build a business strategy around them. However, due to this change, the essence and personality of people and the resulting decision-making mechanisms are playing an increasingly important role in modern business strategies. In other words, there is no modern business strategy without an in-depth knowledge of the people targeted by the strategy. The plan must involve details about how they make decisions, what influences their decision-making, the danger points of their decision-making process.

Traditional elements of business strategy

A modern business strategy, therefore, focuses on people, so it evaluates and builds the business based on their decision-making mechanisms. But that alone is not enough. One must monitor traditional elements in the same way. What are they? In today’s world, it is impossible to move forward without understanding generations. Many say that there have always been differences between young and old. The new generation has always rebelled. This is true. However, the direction, motivation, and consequently, the manifestation of this rebellion have always differed. Moreover, while we used to talk about generations in terms of 15-year to 20-year spans, the speed of our world’s development has also transformed this process, and today’s generations span much shorter periods. This makes their appearance in a particular business environment even more complex. Part of this has to do with how in any one organization, there are more generations involved in implementing the strategy than before, but there is also a much broader group on the market side. That is, a good business strategy also requires a new type of generational knowledge. In addition, it is essential to be aware of the evolution of consumer society. How households can spend money is changing. What’s more, it doesn’t hurt to be aware both locally and regionally if we want to produce a truly successful business strategy. Traditional market research is essential, but modern business strategy must now include three elements: decision-making mechanisms, generational classifications, and household solvency data—we can build successful strategies from this data.

Types of modern business strategy

Every functional strategic system defines strategic routes by grouping people. Very few people know that business strategy and its style are most affected by the personality of the creator of the strategy. Of course, this does not mean that every strategy created by a particular strategist will be the same for every client in every case, but a strategy of theirs will bear hallmarks of its creator. This strategy, in turn, will only work if the personality of the strategy is the same, or at least similar to the personality of those implementing the strategy. If this match does not exist, there could be severe fallout. Thus, business strategies can be grouped according to their characteristics. One well-known system is RISE, which is composed of the Ruler (who targets immediate success, is offensive and dominant), the Individual, (unique person who enters the market with distinctive knowledge, with intensive, influential communication, and abounds in ad-hoc turns) the Supporter (who builds towards the market both stably and slowly, primarily based on emotions and empathy) and the Expert (who focuses on professional knowledge and does not place much emphasis on communication and profit, but prefers strategic directions that provide a prominent professional position). These strategic directions also form personality type groups, i.e., a given strategist usually produces a strategy that fits their own personality due to their intrinsic motivation.

The biggest strategic business challenge for COVID-19, as with any major economic crisis, is that while in peacetime each strategic direction can be successful and the discrepancy is between the timing and magnitude of success, in a crisis, there is usually only one strategic direction that can work. Others have no chance of success at all. That is, in many cases, it is now up to companies to decide whether to sacrifice business success for the next 4-5 years for the sake of their strategic and human identity, or to adapt to the clear strategic direction dictated by COVID-19. Which direction is successful? The Offensive Ruler, the Influential Individual, the Steadily-Building but Slow Supporter, or the Cold, Professional Expert? We will discuss the answers to these questions in upcoming episodes!

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