![\"myer-david-jones\"](\"https:\/\/sidewaysthoughts.com\/blog\/wp-content\/uploads\/2012\/09\/myer-david-jones-710x247.jpg\")
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I follow on my recent post on strategic planning<\/a>\u00a0with a practical question: What does strategy look like?<\/p>\n My focus on strategy started when I read an article in the Australian Financial Review<\/a> where Bernie Brookes, the\u00a0CEO of Australian department store Myer, quoted his five strategic initiatives for the future of the company. It struck me how a clear strategy makes the challenges of business become succinct and focused.<\/p>\n A strategy clearly outlines what you are going to do as well as what you are not going to do.\u00a0 This may seem like simple stuff, but a surprisingly large number of organisations do not have a strategy<\/a>. To see what strategy actually looks like, it can help to compare two companies that are slightly different flavours in the same industry.<\/p>\n Australian retailers Myer and David Jones\u00a0provide a convenient case study as both have similar offerings and markets with easily understandable business models.\u00a0 They are also required to provide reporting to investors, making information easily accessible.<\/p>\n The review is based on:<\/p>\n This is by no means a deep analysis nor am I a financial analyst. \u00a0Rather, this is a brief review of the strategies stated by both companies to see if there are common attributes to consider when creating strategy for other\u00a0organisations.<\/p>\n For example, it appears to be important to limit the…<\/p>\n The number of strategic initiatives needs to be enough to cover the broad spectrum of the business without being overwhelming. Myer presents it strategy in seven areas, whereas David Jones lists twelve initiatives in three categories. There are\u00a0obviously\u00a0several strategic\u00a0initiatives\u00a0under each statement. It is easier, however, to rally behind five areas of focus rather than keeping in mind thirty priorities. This may mean a few pet projects are not included, and also requires a balance between…<\/p>\n Strategies that are general can encompass several initiatives, but if too vague can lack accountability and effectiveness. Myer plans for \u201cnew stores growth and refurbishments\u201d while David Jones will \u201copen six new department stores\u201d.\u00a0 Listing specifics in a strategic statement can be good to rally the troops and contain the target, but it can also limit initiative and introduce unnecessary risk of a visible recant if the target is not hit. What is and is not included can be based on the degree of…<\/p>\n Decisions need to be made whether a strategy stands on its own or whether it is part of a wider strategy.\u00a0 David Jones is intent on \u201cbecoming an omni channel retailer\u201d while the company is also \u201cinvesting in technology\u201d. I would assume technology investment is assumed in Myer\u2019s strategy to \u201cdeliver a flexible omni-channel offer\u201d. Some organisations group strategies into priority areas, as is the case with David Jones, while others may create sub-strategies. The impact of these strategies can be based on the use of…<\/p>\n A strategy typically involves a powerful action verb.\u00a0 Myer and David Jones commit to grow, build, improve, deliver, reduce, become, invest, align, open, and restore aspects of their business.\u00a0 Other verbs not as compelling include ensure, address, and offer.\u00a0 The way the strategy is written can be compelling and helps the direction of the company to be…<\/p>\n Strategies can be written in the newspaper, posted online, announced at staff meetings, delivered to investors, and shared in client presentations. Strategies will be interpreted differently to various stakeholder groups, but the underlying meaning will be consistent.\u00a0 Both Myer and David Jones feel it is more important to cast a strong strategic direction than risk the other discovering any strategic secrets. On the contrary, a comparison between each organisation\u2019s strategies shows similar approaches.<\/p>\n Both Myer and David Jones operate in a similar context, so it would make sense they would have very similar strategies. To use a sporting metaphor, two runners may have similar strategies to win a race, but one may focus on strength and the other on breathing.<\/p>\n Both department stores focus on costs through appropriate product mix, although Myer\u2019s statement to \u201censure product mix and floor selling space delivers optimal returns\u201d has a more positive spin. Both companies will focus on customer service and store growth.\u00a0 Both companies have latched onto the concept of being \u201comni channel\u201d<\/a>\u00a0(as compared to multi-channel as referenced by similar companies in the US such as Nordstrom<\/a>\u00a0and Sears<\/a>).<\/p>\n The difference between the strategies is in the detail and in what is not mentioned.\u00a0 Myer is in a position to \u201cgrow our Myer Exclusive brands\u201d, which was at 50 at 2011 reporting time complementing the other 2,400 brands for a \u201cwhole of home\u201d solution. David Jones does not stipulate the total number of brands in 2011 apart from adding 90 brands for a \u201cHome of Brands\u201d strategy supported by the strategy to \u201coffer the best National & International brands\u201d. It is this \u201cHome of Brands\u201d strategy it articulates as the primary differentiator.<\/p>\n Strategy is measured by outcomes, which are typically financial in nature in our commercial world. Myer makes a note of saying they are the largest, pulling in total sales over $3.1 billion to David Jones\u2019 $1.9 billion. Size does not always matter, however, with David Jones reporting a higher earnings before income and tax (EBIT) margin of 8.26 percent compared to Myer\u2019s 7.37 percent.<\/p>\n Immediate returns are not always an indicator of strategy success, depending on whether the strategy is designed to have short or long-term impacts. As Myer CEO Brooks says in response to a drop in share price: \u201cIf we hadn’t invested in customer service, we would have lost our customer franchise and exposed ourselves even more to the world wide web. We had to take our medicine and balance that against the long term view.\u201d<\/p>\n Strategy is a key consideration for both companies. The word strategy or strategic is mentioned 50 times in David Jones\u2019 2011 annual report, 51 times in Myer\u2019s.\u00a0 Both annual reports are very clear as to who takes responsibility for strategy in the organisation. This is important to understand when assigning ownership and accountability in the structure of your organisation.<\/p>\n Myer notes the Executive General Manager<\/a>\u00a0is responsible for the development of Myer\u2018s strategic planning framework, as well as all aspects of human resources. Other executive roles are responsible for functional-specific aspects of strategy, such as the Executive General Manager Stores<\/a>\u00a0for delivery of operational strategies and the Group General Manager Marketing and Brand Development<\/a>\u00a0for the brand strategy responsibility.<\/p>\n Myer\u2019s CEO relies on others to provide the strategy framework as well as the execution of strategy in their areas of speciality.\u00a0 David Jones distributes the responsibility across the Executive Committee to implement group policy, manage corporate processes and review strategy and resources. Clear lines of ownership and accountability are critical.<\/p>\n Both organisations also clearly define the relationship between the board and the CEO.\u00a0 The Board has a responsibility to:<\/p>\n The Board is ultimately responsible for identifying and assessing internal and external risks that may impact the Company in achieving its strategic objectives. The Board then delegates the implementation of the strategic objectives, plans and budgets approved by the Board to the CEO and management.<\/p>\n The CEO is then responsible for:<\/p>\n The approach to strategy, the strategy itself, and the delivery of strategy can be performed by leadership team. The Board is responsible for the outcomes of the strategy and the CEO is responsible for ensuring the strategy is implemented. The CEO is also\u00a0accountable\u00a0for ensuring a strategy exists and that her or his actions align with that strategy.<\/p>\n A comparison between the strategies of Myer and David Jones confirms in part what strategy looks like and who is responsible within an organisation.\u00a0 I respect the target audience of this post is limited to those in a similar role to my current gig where there is a need to clarify, define, and execute strategy.<\/p>\n If this is you and it helped or if there are other observations to be made, drop me a comment or like below. If this is not you, then you probably\u00a0didn’t\u00a0get this far down the post, so all good.\u00a0 Either way, I trust your response will be part of your well-defined strategy.<\/p>\n","protected":false},"excerpt":{"rendered":"What does a Strategy look like?<\/h2>\n
![\"Myer](\"https:\/\/sidewaysthoughts.com\/blog\/wp-content\/uploads\/2012\/09\/myer-david-jones-strategy1.jpg\" "\\"Myer")
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Number of strategies<\/h3>\n
Detail versus generality<\/h3>\n
Strategy overlap<\/h3>\n
The action verb<\/h3>\n
Understood by everyone<\/h3>\n
The comparison<\/h2>\n
Who does strategy?<\/h2>\n
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An academic case study with practical application<\/h2>\n