He has heard it many times and in multiple forms, but Jeffrey D. Sherman has his doubts about any business leader who says they would rather have first-rate execution of a second-rate strategy than a brilliant idea and mediocre management.
“They aren’t really advocating for a mediocre strategy,” Sherman, the author of The Strategy and Planning Toolkit for Small and Medium Business, said during a recent webinar hosted by the Chartered Professional Accountants of Canada. Instead, most companies actually want a strong strategy, but particularly for CIOs working at small and medium-sized businesses, it’s work that gets pushed to the back burner.
“In small companies, nobody has time for strategy. It’s often ignored,” said Sherman, who is also a former adjunct professor at York University and the CFO of Atrium Mortgage Investment Corp. “Strategy is often focused inwardly, it’s incremental and subject to game-play and politics. Because it’s hard to do, we pretend it doesn’t matter.”
Vision, Mission and Values
As a starting point, Sherman said executives should rethink concepts like “vision,” “mission” and “values.” Although they’re all common-sense terms, he suggested many business owners don’t really define them properly, any more than they do strategy itself.
A vision, according to Sherman, is an aspirational statement about where or what a business wants to be. The mission statement should be about how a company will achieve that vision, and values represent the fundamental beliefs that underlie the culture of the organization.
Sherman said all these elements provide a framework for making strategic decisions, which he described as “some advantage, perhaps not an obvious one, that will let us succeed.” It may not always be a piece of technology, but the way CIOs use technology to solve particular business problems could be the foundation for that strategy.
Focus Goals And Operational Goals
Increasing sales by 10 percent, for example, “is not a strategy, it’s an objective,” Sherman said. Instead, developing a mobile app that will increase sales by 10 percent over a six-month period is specific, measurable and combines both focus goals (what to achieve) with operating goals (how to do it). Budgeting and then conducting a “rolling forecast” of what might change as the strategy rolls out should be part of every organization’s business plan, Sherman said. It should be a part every CIO’s business plan, too.
“There are too many companies that treat budgeting and planning as busywork. The budget may be prepared because a bank or investor wants one,” he said. “What we want is to make sure the budget is a value-added process, not a fill-in-the-blanks process.”
Of course, a lot of CIOs may know all this already, but Sherman’s talk was a good refresher, and might even be a guide for IT leaders who run their department as a sort of SMB that works within a larger organization. As they get more comfortable with these tools, Sherman predicted executives will be better able to weather economic storms and chart a more realistic path to grow over the long term. It’s a process that has to become part of day-to-day life for business owners, where vision, mission and values are frequently revisited and reviewed.
“Despite it’s pedigree, strategy and execution actually go together,” he said. “It’s a focusing of energy and resources on a few key objectives.”