Strategy formulation can take place in completely different ways. There is apparently no ‘one best way’. The strategy schools with their four quadrants urge managers to make a choice themselves depending on their own situation. Despite the differences, I think that conclusions can also be drawn that are applicable to almost all situations. With these conclusions, I indicate how strategy formulation in an organization can be carried out more effectively.
How can you maximize the impact of strategy formulation?
Carefully choose a particular method of strategy formulation. Strategy formulation is the way top management deals with uncertainty. Whether you choose the deliberate or spontaneous approach, strategy formulation remains an elusive process. Responsibility for the method of strategy formulation cannot be delegated. It is the responsibility of the top management.
Always define the next strategic step
Some managers have a long-term orientation and try to look ahead a few years. However, the predictability of the future is highly questionable and therefore a multi-annual plan is not always possible. This, however, makes a picture of the way value is to be created in the future no less relevant. Clarity about the next step gives the organization focus.
Play the ball, with a flexible and agile approach
The environment is changing rapidly and is also complex and quite unpredictable. The management, however, can determine which developments in the environment are the one that matter now. The organization must therefore be properly engaged with these and involve those developments in the strategy formulation.
In every approach, there is a large interrelationship between the strategic choices and the operational decisions. Within the organization, there needs to be interaction between functions and departments in order to be able to achieve the strategy. Major strategic alterations in course will bring radical changes to the organization. The leadership must coordinate these changes well and try to obtain cooperation with them, in particular by setting up a well designed business intelligence platform for example Yellowfin.
Polish up the skill set
Skills are the gold of the organization. These core strengths need to be continuously improved. Organizations that are increasingly getting better at the things they are already good at are very difficult to overtake.
Get the commitment of employees
Social and community motives play an increasingly role in strategy formulation. By involving not only economic motives but also social drivers, there are increasing opportunities to develop support.
Regularly assess the extent to which the internal capabilities of the organization match the demands of the external environment. A strategic gap can thus be determined, alternatives are generated and, as a result, new search fields are initiated.
Make the strategy measurable with KPIs
In other words, create the conditions to monitor and adjust progress. Determining the strategic search fields (KPIs) is the first step towards making the strategy measurable. A practical way to do this is with strategy mapping.