The Entrepreneurial Imperative by Carl J. Schramm PhD

Author:Carl J. Schramm, PhD
Language: eng
Format: epub
Publisher: HarperCollins

The Fourth Conversation

Managing within a system of entrepreneurial capitalism requires firms of both sizes to be continuously engaged in strategy considerations. All businesses engage in three discussions. First, they worry about their customers and the direction of movement among their customers’ needs and tastes. This is the sales conversation.

Second, every company, no matter what its size, worries about its capacity to please its customers and to win more customers. This is the production/logistics conversation.

Third, every company engages in a continuous discussion regarding its financial resources. Without the ability to make money by selling at more than the cost of goods or services sold, the company is out of business. This internal discussion also looks at whether the company possesses sufficient capital and debt capacity to remake its future.

To those three conversations that occur in business every day, we must add a fourth: as the future unfolds, the issue of strategy will take on much greater importance.

We are reaching a point of constant innovation. Unlike past periods in which innovation was a herky-jerky process, coming in compressed lumps of time, now we enjoy a continuous flow of innovation. Not only is the velocity of technological change increasing in every industry, but the lines between where the technology is best applied are blurring. Thus, the strategy problem is more and more intense. As a result, there must be a fourth conversation inside every organization that is as ubiquitous as the other three.

In many established firms, strategy is a once-a-year meeting involving senior staff only. The discussion is often held at a resort where strategy is the topic in the morning—usually with outsiders being brought in to give their perspective of what is going on in the business universe—and sports, often golf, is the pastime in the afternoon. In this environment, strategy is necessarily thought of as a discrete event, with no one—except perhaps the CEO—owning the outcome.

In contrast, the fourth conversation presumes that strategy is a constant discussion, taking place throughout the organization on an ongoing basis. This approach creates a continuous strategy dialogue characterized by three elements.

First, for the delegation of strategic decision making to be truly effective, management must absolutely articulate the goals of the company. But these goals should be presented as just the general direction of the company, with the understanding that management will make continuous adjustments to capture new opportunities as well as deal with various threats and challenges. These adjustments must be openly discussed throughout the organization as they are made.

Opening up the process is the right way to go. Today, when there is continuous technology development, it is folly to expect that just one person can accumulate all the facts that will yield the appropriate insight. By distributing strategy on a continuous basis company-wide, the CEO and senior managers gain more perspective; they deal with people who (a) are closer to the marketplace and (b) have differing perspectives about what needs to be done. And since this process is iterative, the company can move faster, decreasing its chances of being blindsided by rapid changes in the marketplace.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.