MAY 2013 FORBES INDONESIA | 63
GUEST COLUMNMATTHEW TICE
The first step in the process was to formulate a winning
strategy based on a deep understanding of the market and the
strengths of the company relative to the competition. By leveraging
its vast distribution network, focusing on great customer service,
investing in new capacity and introducing new product categories in
underserved niches, the company was able to significantly
outperform the market growing at more up to three times the market
growth rate for several years.
Having the strategy was only part of the story. The company
realized that unless every employee from the top to the bottom
understood the strat-egy and their role in implementing
it, it would be impossible to maintain the growth. To achieve
this, the strat-egy itself was focused down to a few major
priorities that everyone could understand and contribute to. Each
priority was measured to ensure that the organization would do the
right things right and discussions about performance against the
strategy were held at every level assisted by simple, but powerful
reporting. The plan itself was flexible and dynamic, and
adjust-
ments were made continuously to ensure that the company was
focused on the right set of initia-tives to drive results.
Without this focus the results would not have been possible. To
sustain the results year after year, the company also invested in
leadership, helping leaders at multiple levels to improve their
ability
to execute, enhance core leadership skills and at the same time
to build the next generation of leaders. As the competition started
to catch up, this leadership investment was understood to be the
key source of long-term competitive advantage. It is relatively
easy to copy strategy, systems and processes. However, good
leadership, with a passion for execution, is not easy to
replicate.
As Indonesian companies evolve into regional and global
competitors (and as more global competitors come to Indonesia), the
discipline of manag-ing strategy will become more impor-tant.
Todays entrepreneurs will need to build these capabilities into
their business models to ensure sustained performance, maintain
their competi-tive edge and long-term survival. F
Great strategies are the ones that work. In hindsight we can
always look back and judge the successful strategies against the
ones that failed. What can we learn from both the successes and the
failures? It is useful to first draw a distinction between two
essential elements of strategy, strategy formulation and strategy
execution. Strategy formulation is about knowing where to compete
and how to win in the marketplace. Strategy execution is about
making it happen once the key choices are made concerning where to
play and how to win.
Most organizational strategies fail on at least one of these
dimensions. Twenty years ago, the consensus was that strategy
formulation is far more important than execution, which was
considered by many to be a trivial af-terthought. Today the
consensus has shifted and strategy execution is rec-ognized to be
the far more challenging and important part of the equation. The
simple fact is that you need both. The results can be impressive
when these two elements come together.
Consider one Indonesian phar-maceutical company that was able to
deliver nearly eight-fold growth in just over five years from
approximately Rp 500 billion to Rp 3.6 trillion in revenue growth,
whilst doubling market share. To achieve these results, this
orga-nization implemented a disciplined approach to formulating and
manag-ing strategy, based on the Balanced Scorecard as developed by
Drs. Robert Kaplan and David Norton.
MANAGING STRATEGY IN INDONESIA
MATTHEW TICE IS MANAGING DIRECTOR AND FOUNDING PARTNER FOR
ASIA-PACIFIC AT THE PALLADIUM GROUP.
IT IS RELATIVELY EASY TO COPY STRATEGY, SYSTEMS AND PROCESSES.
HOWEVER, GOOD LEADERSHIP, WITH A PASSION FOR EXECUTION, IS NOT EASY
TO REPLICATE.
