Strategic Setup

There are so many schools of strategy in the world that one

would imagine there is no correct way to develop a strategic plan for any

organisation which would be approved for its rigour and robustness by all the

strategy pundits of the world. One reason for this lack of convergence is

probably the fact that there are so many ways to even approach a business

strategy articulation problem.

Bob Simons, one of the most articulate professors at the Harvard

Business School and an expert in the area of Organisation Design has a simple

hypothesis which says that an organisation must build its strategy on four

simple Ps — Perspective, Position, Plan and Patterns and then find ways to

communicate and practice the key elements it decides to incorporate in its

strategy. The amazing success story of Siebel in the nineties is a case study of

how an organisation with a near obsessive focus on its customers can make a fine

art of this approach.

Set up by Tom Siebel in the early nineties, here is a company

that even today holds the record of being the fastest business to hit a billion

dollars in revenue - just seven years after its founding compared to fifteen by

Microsoft, fourteen by Oracle and eleven by Peoplesoft, and all achieved by

making the customer's success the sole measure of the company's success!

Viewed with the focus of the Four P strategic model, the company succeeded by

choosing the following model

Perspective: An obsession with customer service with the highest

levels of professionalism and a clear mandate that the needs of the existing

customer took precedence for all its people over new sales and any other

activities.

Position: A choice made to only focus on product development and

build an alliance strategy to handle all implementation needs and avoid all

conflict with their alliance partner channel. And that too only the product area

of CRM and having the maturity to say No to any other business opportunity,

however lucrative.

Plans: A decision to focus on hiring only experienced people who

could hit the ground running, design the organisation for scalability and invest

heavily in internal IT and Performance Management Systems to enable the goals to

be achieved.

Patterns: Clear demonstration of intent by having a culture of

frequent communications and transparency, with even the founder's key result

areas published on the company intranet and a total engineering approach to all

their initiatives including alliance and employee procedures and systems.

One could argue that such single minded focus on customer

satisfaction could result in loss of flexibility and could have been the reason

for Siebel to lose momentum post the Dot Com crash and its eventual recent

acquisition by Oracle. But that would take away from the spectacular success

achieved by the company by embracing the virtues of a focused and fully

integrated strategy. How many of the companies in our nascent industry are able

to show such focus?

And finally, on the theme of different approaches to developing and

presenting strategies for organisations, comes a simple five point formula for

business plan presentations from Sanjay Anantram the very intelligent and

articulate venture capital specialist from JumpStartups in Bangalore. Speaking

after an intense session at the NASSCOM Innovation selection process, he

counseled the young CEOs that however good the product or service or strategy,

the five key things that needed to emerge in an entrepreneur's presentation

were — Who are you, What is the problem you are trying to solve, Who else is

out there, How will you compete and beat them and finally How will you make

money? The moral here is that whatever the approach and rigour of a strategic

plan, unless these five questions find defensible answers no strategy can ever

succeed.