Solution Management Thought Library 2 - Defining Strategy

Author: Jia Yongxuan
Publisher:
Publish Date: 2005-06-01
Features: I have two jobs: one is as Chairman of the Board, where I set the goals for GE and formulate its strategy, and the other is as CEO, where my other main responsibility is to be responsible for business operations. – Chairman and CEO of General Electric Company, Immelt
Management Three Elements: Building a team, setting strategy, leading a team. – Chairman of Legend Holdings, Liu Chuanzhi
My Role at Haier: First, to play the role of a designer, formulating development strategies and implementing strategic management for the company; second, to play the role of a pastor, like a pastor preaching, to permeate corporate culture into every employee’s mind. – CEO of Haier Group, Zhang Ruimin
Whether we think from a global perspective or analyze from the perspective of the Chinese domestic market, a company must set strategy to develop. If the strategy is not set accurately and the direction is unclear, we often take detours or even go back. – Chairman of Dongfang Group, Zhang Hongwei
Strategic management is about doing the right things and doing things right. Doing the right things means setting strategy, and doing things right means emphasizing execution. The key to doing the right things and doing things right lies in the results. Therefore, simply put, strategic management is about setting strategy, emphasizing execution, and focusing on results. – Chairman of Beijing Suorong Management Consulting Co., Ltd., Jia Yongxuan
The book "Setting Strategy" has three "setting" issues: setting direction, setting goals, and setting methods:
Setting Direction: Setting direction means determining the development direction of the enterprise. The direction of the enterprise includes field direction, geographical direction, temporal direction, and positional direction, etc. These four strategic directions constitute the "Four-Dimensional Strategic Map of the Enterprise." The key to setting direction is to determine your own combination direction within this four-dimensional strategic map. Setting direction is about the route and strategy. A wrong route is the biggest mistake, and a strategic error is the biggest mistake. Going in the opposite direction is like climbing a tree to catch a fish; it not only wastes your money and time but also makes you lose confidence, energy, and popularity.
Setting Goals: Setting goals means determining the development goals of the enterprise. The goals of the enterprise include the goal of becoming larger, the goal of becoming stronger in competition, and the goal of a longer lifespan. "Becoming bigger, stronger, and longer" is the ideal that every enterprise longs for, but it is precisely because too many enterprises fail to grow, become strong, or survive long. The key to setting goals is the "Three Combinatorial Strategic Goals" of becoming bigger, stronger, and longer, rather than single goals. Because becoming bigger does not equal becoming stronger, and becoming stronger does not equal becoming longer. The current goal of Chinese enterprises should be to pursue long-term sustainability while striving to grow and become strong.
Setting Methods: Setting methods means determining the development methods of the enterprise. The growth methods of the enterprise include technological progress, management upgrade, industrial-financial integration, and core capabilities. Becoming bigger, stronger, and longer is the dream and pursuit of every enterprise, but how to become bigger, stronger, and longer, and how to win in competition, are the fundamental issues of the enterprise. Michael Porter proposed the competitive methods of overall cost leadership, differentiation, and focus from the perspective of general competitive strategy; I proposed the methods of technological progress, management upgrade, industrial-financial integration, and core capabilities from the perspective of China’s strategic competitive implementation methods, that is, enterprises rely on technological progress, management upgrade, industrial-financial integration, and core capabilities to become bigger, stronger, and longer. We believe that the strategic direction and strategic goals of the enterprise must also be realized through the "Four Strategic Pillars" method.
Setting direction determines what to do and what not to do. Setting direction is the prerequisite; without direction, it is like a headless fly. Setting direction is about continuity; wavering between three in the morning and four in the evening is difficult to achieve great enterprise achievements. Mao Zedong said, "The route is the framework; once the framework is raised, the details will fall into place."
Setting goals is the pursuit of the enterprise, determining what to achieve. Are you content with small wealth or striving for greatness and strength? Are you wavering or pursuing long-term sustainability? Are you self-fulfilling or dedicated to serving the country and taking the nation’s prosperity as one’s own responsibility? I say, "The higher the heart reaches, the broader the sky is; the enterprise and the heart are one."
Setting methods are about means, methods, and strategies, determining how to do things. That is, when the route and direction are set and the goals are pursued, how to achieve, execute, and win in competition, how to become bigger, stronger, and longer. Therefore, what to do (setting direction), what to achieve (setting goals), and how to do it (setting methods) combined together are the three "setting" issues of setting strategy. These three aspects support, influence, and interact with each other.
This book uses the "Four-Dimensional Strategic Map" to set direction, the "Three Strategic Pursuits" to set goals, and the "Four Strategic Pillars" to set methods, closely combining direction and methods, purpose and goals, strategy and tactics, and systematically thinking, solving, and setting strategy.