Developing Organizational Strategies

Part of the strategic planning process is developing organization wide strategies. These strategies express how you will compete in your market.

According to strategy guru Michael Porter, “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.”

In this step of the planning process, you are using the synthesized information in the SWOT, your mission, vision and competitive advantages to articulate the organization-wide strategy or strategies that will guide goal and action planning – from where you are now to your vision.

Richard Rumelt, the author of “Good Strategy/Bad Strategy,” helps us apply Porter’s definition and summarizes the kernel of strategy like this:

  1. Diagnosis of the situation. What is going on here? A good strategic diagnosis does more than explain the situation; it also defines the domain of action. You accomplished this during the SWOT process.
  2. Choice of an overall guiding strategy to address the “diagnosis.” Like guardrails on a highway – it directs and constrains action without fully defining its containment. It tackles the obstacles identified in the diagnosis by creating or drawing upon sources of advantage. This is the intended outcome during this phase of the planning process.
  3. Design of coherent, coordinated action. The key word here is “coordinated.” Goals and actions at various levels of the organization are developed in concert with the guiding strategy. You will develop these in subsequent steps.

Examples of good strategies:

  • Starbucks: To build the brand one cup at a time, based on three key ingredients: the quality of the coffee, the retail stores, and selective brand extensions.
  • The Boy Scouts of America: Consistently delivering the youth experience to a growing membership base.
  • The Economic Development Authority of Western Nevada: To move toward economic development and to increase the base of companies contributing to the region’s measurable quality of life to ensure long-term vitality of the community.

How to Develop Organizational Strategies with Your Team

This step in the process can be confusing and tough for individuals to understand. The smaller the group the better to think through the following exercise:

1. Write a diagnosis, which is basically a summary of the SWOT. If you had to describe your current situation to an outside Board of Directors, what would you say in 2 minutes?
2. Review your competitive advantages and vision. Clarify if needed.
3. Develop a statement that explains your approach or method addressing the current situation to achieve your vision. Good strategy is not just what you are trying to do, but it is also why and how you are doing it.

The Bottom Line

The word “strategy” is often confused and overused. It is helpful to think about it in the following three levels:

  • Overall Strategy: This level answers the foundational question of what you want to achieve. Is it growth, stability, or retrenchment? Ultimately, this is why you are putting a plan together in the first place.
  • Organization-Wide Strategy: This level focuses on how you’re going to compete. Will it be through customer intimacy, product or service leadership, or lowest total cost? What’s the differentiation based on? This is the level addressed in this step of the planning process.
  • Market-Level Strategy: This strategy level focuses on how you’re going to grow. Will it be through market penetration, market development, product or service development, or diversification? We’ll address this during goal setting.

For a more in depth look at how you can identify your unique organization-wide strategy, watch this video.

Comments

One Comment

  1. Derek says:

    Very helpful indeed…thanks for sharing

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