Bidco Africa, Safaricom & Equity Bank: Three Strategic Approaches to Success

Strategy is one of those words that are in every manager’s lips or resume worth their salt. Most often than not, most corporate strategies are viewed as either to simple or too complex.

In this article we shall view strategy from the lenses of successful companies based on the latest strategic practices.
There is no shortage of definitions of strategy, but there is often a gap between its theory and its practice. This is because the theory of strategy attempts to explain why companies succeed or fail, whereas the practice of strategy seeks to identify specific courses of action to solve problems and take advantage of opportunities on the ground.

At the core of strategy is often about logic behind making choices. But while logic may seem intrinsic to an individual, it often comes from very distinct areas, which can cause friction in company strategy.

Many experts believe there are three strategic logics that govern most organizations: analytical, institutional and systemic:

1-Analytical logic deals with cause and effect. For example, “an increase in customer satisfaction of 10 percent leads to a 6 percent increase in market share.”

2-Institutional logic considers a company’s values, and applies them to the situation to make a decision. While it might be expected that analytic logic would play a far greater role in strategy, thinking about appropriateness and the organizational identity is also very significant in practice.

3-Systemic logic employs a mixture of experience and intuition. It can fly in the face of hard data, but it is also often used by professionals with many years’ experience in the sector. An example would be the idea that “the key to success in the automotive sector is having a strong brand.”

These three logics go a long way to understanding how three experts in a company, based on the same facts and figures, can arrive to three entirely different conclusions about a strategy going forward.

It also explains how star companies may have taken vastly different roads to reach their success.

Bidco’s success can be seen as a product of analytical logic, Safaricom’s as coming from their values (institutional logic) and Equity Bank’s as an example of systemic logic taking a central role.

Each of the three logics pertains to a larger strategic perspective, which represents how the practice of strategy develops.

1-Analytical perspective is developed deliberately through reasoning and is based on hard data, economic trends and market forces. The strategies derived from this perspective are simple, specific and prescriptive. The analytical perspective, broadly speaking, has two dimensions: external — business environment, sector, market, threats and internal resources and capabilities.

2-The institutional perspective is usually expressed through tools such as the company’s mission statement, but this is just a symbolic representation of it. This is largely a subconscious perspective and becomes a default when the company does not explicitly define its own strategy. It is the institutional perspective, moreover, which inspires people to place the company’s interests ahead of their own. It also fosters a long-term view.

3-The systemic perspective is developed through a profound knowledge of the real world of any given business. It often develops in an uncontrolled or unplanned way as events unfold, and influences strategy in the business model.

No one perspective is enough to make a company successful, even the examples above of Bidco, Safaricom and Equity Bank. In fact, while each can be seen to excel at a certain perspective, it is the integration of all three that creates strong businesses.

In practice Viffa Consult team worked with a management team within a regional retail company applying the balanced Systematic, Institutional and Analytical model as a means to reflect on strategy. They defined the company’s business model and those of its main competitors, then redefined the mission and values and reviewed objectives and budgets. By the time the process was complete, appetite for change and evolution was high in the management team.

The speed and agility in implementing the planned changes surprised both the Viffa team and the participating managers. The difference had arisen from the method: rather than just defining strategy and informing the team, the strategy had been defined taking the different skill sets and strategic logics within the company into account.

We can say for sure that in that  company, the gap between strategic thinking and action had narrowed dramatically.