GUEST COLUMN

MATTHEW TICE

MANAGING STRATEGY
IN INDONESIA

it, it would be impossible to maintain

the growth. To achieve this, the strategy 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 adjustments were made continuously
to ensure that the company was
focused on the right set of initiaIT IS RELATIVELY EASY TO
tives to drive results.
COPY STRATEGY, SYSTEMS
Without this focus the
AND PROCESSES. HOWEVER, results would not have been
GOOD LEADERSHIP, WITH A
possible. To sustain the results
PASSION FOR EXECUTION, IS year after year, the company
NOT EASY TO REPLICATE.
also invested in leadership,
helping leaders at multiple
levels to improve their ability
to execute, enhance core leadership
The first step in the process was
skills and at the same time to build
to formulate a winning strategy
the next generation of leaders. As the
based on a deep understanding of
competition started to catch up, this
the market and the strengths of the
leadership investment was understood
company relative to the competition.
to be the key source of long-term
By leveraging its vast distribution
competitive advantage. It is relatively
network, focusing on great customer
easy to copy strategy, systems and
service, investing in new capacity and
processes. However, good leadership,
introducing new product categories
with a passion for execution, is not
in underserved niches, the company
easy to replicate.
was able to significantly outperform
As Indonesian companies evolve
the market growing at more up to
three times the market growth rate for into regional and global competitors
(and as more global competitors come
several years.
to Indonesia), the discipline of managHaving the strategy was only part
of the story. The company realized that ing strategy will become more important. Todays entrepreneurs will need
unless every employee from the top
to build these capabilities into their
to the bottom understood the stratbusiness models to ensure sustained
egy and their role in implementing
performance, maintain their competiMATTHEW TICE IS MANAGING DIRECTOR AND FOUNDING PARTNER FOR ASIA-PACIFIC AT THE PALLADIUM GROUP.
tive edge and long-term survival. F
reat 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 afterthought. Today the consensus has
shifted and strategy execution is recognized 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 pharmaceutical 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 organization implemented a disciplined
approach to formulating and managing strategy, based on the Balanced
Scorecard as developed by Drs. Robert
Kaplan and David Norton.

MAY 2013 FORBES INDONESIA | 63