Fixing common issues of corporate strategy
Why is strategy so hard to define, even harder to validate let alone hard to cascade and execute? Let us have a look at some of the reasons that leave strategy professionals puzzled and how to solve them. The solutions relate to numerous other posts describing the solution.
What are the issues with strategy?
Besides a low level of automation for strategy tasks, here are common issues:
Using the right scope
platforms and ecosystems
business model canvas and blind spots
sanity and completeness of strategies
cascading and executing strategies
Using the right scope for strategies
What is the right scope for a corporate strategy? There often is a multitude of different strategy types, for example corporate strategy and competitive strategy. In large organizations, there might even be different departments in charge of the different types of strategy. This might lead to numerous issues like conflicts between strategies, strategy inconsistency and strategy failure. This type of issues has to be addressed in our approach here. We need a model with a holistic scope that covers corporate strategy and ecosystem strategy which includes customers, partners, competitors alike.
In addition, M&A strategy is not separate from corporate strategy, it is part of corporate strategy. At the same time, it is a means to execute portfolio changes and additions and to support other strategic goals, e.g. as part of the growth strategy.
Corporate strategy in the age of platforms and ecosystems
While many corporate strategies are focused on a specific corporation, we take a different approach in this book. In the age of platforms and ecosystems of customers, partners and suppliers, it is paramount to make these external entities part of the strategy, too.
Strategies, business model canvas and blind spots
In start-ups but also in large corporates, business models are part of strategy discussions. It is crucial to look at the corporate portfolio of business models and to revise and update it regularly. In addition, M&A activity might complement the set of business models with new business models from acquired companies.
Creating business models using the business model canvas is very popular. A striking blind spot of the business model canvas is information about markets and competitors. But modelling strategy involves looking at the ecosystem of a company beyond partners and suppliers covered in the business model canvas.
We will fix this in our model by relating strategy to strategic entities in the ecosystem, like markets, competitors, customers etc. We can already leverage the existing relationships in our data model to describe the link between markets and competitors and business model elements. By doing that, we are able to define what a complete strategy is, and we can define rules to test the consistency of a strategy model.
Checking sanity and completeness of strategies
Does the strategy at hand make sense? Can it be properly executed? Is the strategy complete? These and other questions puzzle managers when defining and executing strategies. The answers to these questions are usually created by manual work and evaluated with human judgement. This calls for an increase in the level of automation in checking strategies for sanity and completeness, which is possible using our approach.
Cascading strategies
Cascading strategies throughout organizations has been a pain for many years. By using the concept of strategic entities which consist of a data schema made up of data objects and relationships we try to ease this pain. Our approach allows formulation of strategic goals on a coarse and on a fine layer and provides a means to start defining strategies on a high level (strategic entities) and on a detailed level (data objects, their attributes and attribute values) with the advantage that both levels are consistent with each other.
Executing strategies
Achieving change is always tough. Executing strategy leveraging change is not different. Letting an organization know about new strategic goals and measures is not sufficient. You must communicate and explain and also set enticing goals to drive the change. You also must detail the strategic goals to the right level of detail that the audience that you communicate can understand and assimilate the new strategy in the corresponding context.
More to come. This is an excerpt of my upcoming book Automation of M&A. Strategy tasks and automation
