Strategy definition – and different ”schools” or approaches

29th June, 2011

Anders Birch

What is Strategy ?

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• Strategy is a plan that aims to give the organisation a sustainable competitive advantage through preserving and developing what is distinctive, positioning and differentiation

• Strategy is about understanding what you do, what you want to become, and – most importantly – focusing on how you plan to get there

• Likewise, strategy is also about trade-offs and what you don’t do…

• Strategy is all about alignment and creating a ‘fit’ among a company’s resources and activities

• Strategy is not the same as ‘operational effectiveness’ – that is production, faster, or with fewer inputs and defects than rivals/benchmarks

” What fantastic hot dish is this company bringing

to the table?”

The classical elements of a strategy process

Strategic Analysis

Mega trends

in society

Market and

compe-titors

Customer

develop-ment

Analysis and reflections based on data and insight of what impacts

the strategy

Internal resources and

capabili-ties

Structure

processes

systems

Share-holder

or owner

expecta-tions

External factors

Internal factors

Strategic change agenda(SWOT)

Mission(Why we

exist)

Vision(What we

want to be)

Values(What’s

important to us)

Aspiration Strategize

Strategic targets

(How good?)

Strategy plan

(What to do?)

Execution plan

(When and who?)

Execution, follow up

and adjust

Execute

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Why is it so difficult?

”What often happens is, that companies fail in

translating the corporate strategic ambition into relevant initiatives on

business unit, team and individual level”

• According to research and a variety of surveys only 40-to-60 % of companies succeed implementing their strategies…

• A recent study by Booz&Co shows every 2nd executive (52%) do not feel his/hers company’s strategy will lead to success

But why is strategy execution so difficult?

• Too much data, analysis and planning – too little ‘doing things’?

• Unclear roles and responsibilities?• Not enough time and resources… more short-

termed operational issues are getting all the attention?

• Too many conflicting agenda’s – no alignment?

• Strategy is not being translated and communicated?

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Different approaches to strategy…

The traditional ”prescriptive” approach

The ”emergent” approach

Rationale A systematised and deterministic process where analysis of the organisation, its performance and external environment leads to the formation of a rational, long-term plan.

Strategy is unplanned, developing incrementally over time as a businesses actions adapt to a changing reality. Instead of meeting a premeditated plan, strategy evolves through a process of learning, adjustment and experimentation.

Approach Systematic, step-by-step rational plan and execution in order to achieve financial results

No mistakes are allowed

Strategizing and implementation are ongoing parallel creative processes aiming at creating value

Trial and error. Fail fast, fail cheap…

External Static view on external factors Everything is changing

Internal Top-down approach

Control is everything

Bottom-up approach

Control is an illusion

Involved…

Expert driven, involving only CXO’s (and external consultants)

Managers and employees at multiple organisational levels have a key input 

”Any intelligent fool can make things bigger and more complex. It takes a touch of genius – and

a lot of courage – to move in the opposite

direction”

- Albert Einstein

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Strategic leadership: What is the key issue?

”The challenge for future leaders?- how to get every mind into the game! ”

Jack WelchFormer CEO of GE

“Great leaders are very self-confident people with extraordinary capacity to make decisions when other people crumble! ”

John Kotter, professor at Harvard Business School 6

Strategic leadership? What to do exactly?

Strategic Analysis

Aspiration Strategize Execute

Pre

scri

pti

ve

Em

erg

en

t

Organizing and mastering the data –using business insights and customer knowledge to define the right strategic agenda

Building capacity for strategic thinking in the organization.Design the strategy process in which people can contribute with ideas and knowledge

Develop the arguments and communicate the ambition and targets. Leaders are the visionary experts!

Create meaningfulness Build a sense of citizenship. Involve many in developing the aspiration. Coordinate and facilitate the process.

Invite for broad participation. Facilitate the search of positive deviances – and the translation of strategy into relevant level.

The guiding coalition. A small group of key persons who make most of the decisions. Define goals, initiatives and execution plan

Continuous process:Define experiments and small wins. Check-in rather than check-out. Being present and in dialogue. Facilitate progress and communicate process.

Linear plan: Follow up on milestones, communicating results, allocate resources.

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Contact information

Anders Birch, Management ConsultantFocus on implementation of strategy, change and organizational development in both private and public sectors.Anders is an experienced management consultant who also has practical management experience from the telco business, with responsibility for group strategy, efficiency and process improvements and strategic procurement.

Mobile: + 45 53 39 40 20E-mail: abc@resonans.dkTwitter: http://twitter.com/AndersBirch2800LinkedIN: http://dk.linkedin.com/in/andersbirch