Strategic Thinking

By ROBERTO B. ORTIZ

November 28, 2012, 5:41pm

In 1982, strategic management guru, Dr. Kenichi Ohmae wrote an article that is still very much relevant in business strategy today as it was at the time of its writing. What got me interested in sharing his thoughts with you are that his views on strategy development is not what most of us learned from Western approaches to business strategy crafting. His ideas on how to develop a business strategy is much closer to the ground and more practical than theoretical. It is also interesting because it is this time of the year when most of us are preparing our business plans for the coming year.
He wrote that all strategies require intuitive elements and “without it, strategies disintegrate into stereotypes.” In this article, I would like to share with you some insights I learned from his essay on the mind of a strategist.
ENJOY GOOD LIFE + INVESTMENT, CLICK HERE   
Dr. Ohmae says that all sound strategies are grounded on three elements, what he calls the 3Rs: reality, ripeness and resources. Very simple truths and concepts that are quite easy to grasp. The 3Rs are the main constraints and considerations that someone must face in crafting a business strategy for his company.
Reality: All business strategies must be grounded on reality. That’s quite obvious. The three realities are customers, competition and the company’s field of competence. This is akin to what we normally call SWOT analysis when developing strategies.  The difference is that I think that Dr. Ohmae’s approach is more grounded in reality. Much like what we want to achieve when we conduct as SWOT analysis, we must always craft our startegies by first considering the customer in mind. But crafting a strategy based on only one dimension is a recipe for failure. All the reality dimensions must be considered as a interrelated whole. In Dr. Ohmae’s article, he cites a light bulb manufacturer who addresses product quality traits solely from the perspective of the customer. The company creates an everlasting light bulb. Surely, your shareholders will not be happy with your strategy because there will be no repeat buys but your customer will surely be happy. Reality is also situation-specific. What might be reality for one country may not be true in another country.
Ripeness: The timing of your strategy must be perfect. Too early or too late will spell disaster. There were many product strategies in business history that failed because the product was too early for its time or even in some cases too late to market. Take for example the introduction of the electric tricycles in the major cities by our Department of Energy. The product is conceptually and environmentally sound. It has been proven in Europe to be economical and a financially sound investment. Yet for the past few years, it has failed to take off even with government support. The problem lies in not having enough investments in the support structure such as battery recharging systems.
Resources: Dr. Ohmae says: “the third R constitutes such a obvious constraint that it is amazing that they should be ignored or neglected by strategists.” Take for example a retail business growth strategy based on company-owned door expansion. While this is a common strategy used by many retail chain stores and sounds pretty straightforward, it is an internal resource-heavy strategy. Resources here include human, financial, business processes, experience, and all others that are put to bear in carrying out the business. All these must be considered because any strategy will always use resources, some more than others.
There is really no magic formula in craft successful and winning strategies. In the final analysis, only by making yourself close to the battlefield and understanding your limitations as well as your strengths will get you closer to winning in the marketplace. Taking heed the mode of thnking proposed by Dr. Ohmae is certainly a big step forward. rbo811@yahoo.com
The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of FINEX.