Case Study: Formulating Strategy by Top Management

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World renowned businesses need to keep moving, they need to stay fluid, if they’re going to retain their dominant positions within their markets. The need for maintaining a steady stream of innovative thinking and openness to coming trends is even more important for companies which are in the process of growing and haven’t achieved a top position within their market just yet. The burden of formulating strategies which will ensure a company’s bright future lies upon that organization’s top management. Futurist speaker Mike Walsh has recently expounded upon the issue of how top management can formulate an effective strategy for the future of their company, while illuminating a huge issue many management professionals run into when trying to do just that.

As Mike explains it, top management runs into a huge problem when they attempt to innovate their organization and plan for its future- what will be profitable in the future is often the opposite of what’s profitable in the moment. This paradox places businesses in a difficult position. On the one hand they need to plan for the future and reorganize their structures and strategies to ensure they remain profitable and can continue to grow as their industry changes. On the other hand these new avenues are rarely profitable in the present moment, and abandoning what is currently profitable will ensure an organization’s failure faster than failing to innovate for the future. How can top management construct a strategy which takes into account both the present cash-flow needs of an organization while still making sure they are well set up for the future?

Mike simplifies this problem with a solution he calls the “Dual Horizon” approach. With the Dual Horizon approach top management creates strategies which take into account two goals and sets of needs- those in the present moment and those yet to come. The first horizon all top management professionals need to consider is what lies ahead for their organization and what their present business model is already equipped to handle. The second horizon lies down the line, beyond your organization’s present modes of concrete perception and relates to educated guesses over where your industry is going.

Focusing entirely on one horizon to the exclusion of the other is destined for failure, states Walsh. Citing HP, Walsh demonstrates how an organization will lose consumer and shareholder confidence when it completely abandons its presently profitable divisions in order to reorganize to meet a future trend within their industry. Walsh explains how IBM acted appropriately when working to meet the same future trend by maintaining a controlling share of their presently profitable divisions while gradually shifting their focus to the industry’s long term.

Top management need to take IBM’s lead and gracefully transition from their present business plan to their future models instead of following HP’s lead and completely restructuring their organization for the sake of an industry trend which hasn’t arrived yet. While balancing these two needs is hardly easy, it’s the only way Top Management can successfully maintain an eye on both horizons.

Mike has been repeated engaged by top managements of major global corporations on formulating their next strategy. Contact us today at Speakers Connect to engage Mike for your upcoming disruptive change!