Having a physical strategy is a non-negotiable for automotive companies
The automotive industry is changing at an unforgiving pace, and companies who don’t have a strategic 5- to 10-year vision could quickly find themselves at the losing end of a constantly transforming industry. Further, a c-suite understanding of a strategy isn’t the only part of the strategic process. It’s equally important that those ideas live outside of your head. Strategies that are not adequately documented and never leave the boardroom are futile and could create inconsistencies, chaos, and misdirection within your company—something which cannot be afforded in the rapid transition to electric, autonomous vehicles.
Here are some of the reasons why documenting your strategy is a must:
Guides decision-making
There are many decisions to be made over the next decade for automotive companies—scale back, ramp up, merge, acquire, sell, change. Having a clear, well-documented strategy will aid you in making those tough decisions, help you identify and take advantage of new opportunities, and prevent you from steering off course. Having your strategy on paper lets you quickly assess and compare opportunities and challenges as they arise to your strategy. If it fits the vision, implement it. If it doesn’t, overcome it or pass.
Essentially, a well-documented strategy backed by in-depth industry knowledge and smart predictions prevents your company from scattering its energies and focusing on areas or things that don’t serve its overall higher purpose.
Gives you something to measure against
It’s hard to measure success without knowing what success looks like. A strategy provides you with a clear vision that you can then set measurable and actionable goals and objectives to. It drives all of your business plans and helps every part of your team understand what they are working toward by hitting their targets. It’s important to realize that your strategic plan is not your strategy, but is a valuable offset of a well-defined strategy. Otherwise, a strategic plan without a strategy is just a guess.
Helps you better understand your business and competition
Developing and documenting a strategy forces companies to understand the reality of their market and their position in it. If your strategy is only understood in your head or in boardroom discussions, it could be possible that you are working from prior experience and assumptions, something that won’t serve you or business any good in a dramatically changing industry.
Proper strategy documentation requires the authors to justify their vision with facts, trends, and in-depth market insights that support their plan of action. With these insights, companies can create visions based on realities rather than running on hope or biases.
Holds accountability
How can you hold someone accountable for a plan that they are unaware of? A strategy document gives your entire company a guideline and vision to abide by, making it easier to call out people, projects, programs, or initiatives that don’t align with that vision. It can also help you identify internal challenges, such as lack of funding, resources, or training. This type of accountability can empower employees to make vision-oriented decisions and help companies save time, money, and resources that would otherwise be wasted on unaligned actions and efforts.
Top-down and vertical alignment
If your strategy is in your head, relaying that message to other managers and direct reports can eventually become like a game of telephone. As the message is carried from senior leadership down to front-line workers or even vertically to other business units, essential parts of that message get lost, skewed, or changed altogether. This miscommunication can lead to various functions of your business aiming for the wrong goal. It can even create tension between business units that need to work together but have conflicting visions.
Physically documenting your strategy prevents the message from getting muddled and ensures everyone—from the c-suite down—are all working under the same strategic vision.
How to document your strategy
Putting your strategic thoughts down on paper can be a tedious task, which is why many businesses end up skipping that part. However, failing to communicate every aspect of your strategy on paper clearly could lead to a whole lot of unnecessary work that doesn’t align with the principle vision.
When documenting your strategy, you should include:
- In-depth market research to uncover market trends, facts, and predictions that will fuel your strategic thinking
- A clear explanation of the strategy, including the strategy itself and the strategic thought process that brought you to that conclusion
- A big-picture outlook for the next 5+ years; a strategy should always focus on a long-term vision
- An accompanying strategy plan that highlights the phases of the strategic vision, specific objectives, and desired actions and targets
Creating a company strategy shouldn’t be a simple or easy task. It is the roadmap for your business and is what will determine the success or failure of your company, so why would you not invest time and energy into building a great one.
A strategic consultant can help
If you are having trouble translating your strategy to paper, we can help. At Paul Eichenberg Strategic Consulting, we work exclusively with companies within or attached to the automotive industry to help them gain and maintain a competitive advantage in a constantly evolving marketplace. We can help you build smart strategies based on comprehensive market insights.
If you have questions specific to your company and its strategy, contact us today. We look forward to talking to you.