The Strategy Process - what is it?

Today I have been...

Reading u1s4p29 - 4.1 What is the strategy process.

Why?

Required reading

So What?

We already mentioned the analyse-choose-implement cycle.

Analysis is assessment of the organisation and its environment.

Choosing is where you design and select a pattern of activities that maximises your chance of successfully meeting your objectives (activity fit is important here according to Porter)

Implementing is where you, er, implement your activities (easiest to describe, but hardest to do?)

It is very important however to revisit and reassess analysis and choice as you implement, to ensure that you deal with any changing situations, as assumptions prove/disprove themselves and to ensure you have an emergent approach (organisational learning).

We are reminded of the B820 definition of strategy

the pattern of activities followed by an organisation in pursuit of its long-term objectives

What factors could affect your ability to conceive and implement the activities? Well you need an ability to be able to understand which internal and external issues are relevant and important, and which are not. Making sense of madness! I wonder if this is why strategy consultants are popular. They can arrive with no pre-conceived ideas and take a holistic view. And of course, you must know which are strategic issues, and which are operational issues, and how they relate. This is clarity in defining what is a strategic issue.

You also need to think about the skills required to analyse, choose, implement. In particular, they need to be logical and disciplined as well as imaginative and creative. I guess this may be where you think carefully about who is on your strategy team. These skill sets tend to be polarised in people, so you may need more than one person to perform the "strategy" role. The logic and discipline are required skills for applying the relevant analytical frameworks, and the imagination and creativity are needed for "thinking outside the box" and coming up with new and original ideas. If you as a manager can be logical and creative you have significant and valuable skills. Strategy requires the maanger to apply both logical and creative thinking and skills... - the ability to make fast, widely supported, and high-quality strategic decisions on a frequent basis...is the fundamental dynamic capability in excellent firms. (So says Eisenhardt, cited on p31 u1s4).

You need to know what layer you're working at. Strategy in most firms is layered. Corporate strategy is at the top, Business strategy in the middle and Functional Strategy at the bottom.

• Corporate Strategy - defines the industries and markets in which the business competes, including investments, diversifications, mergers etc. I think this would sit with the definitions of objectives at the top of the pyramid of purposes.
• Business strategy - defines how the organisation (eg a single business unit) should compete within the industry/market chosen by the corporate strategy. The answer may be, for example, to be internally or externally focused. External - market position relative to customers/competitors/suppliers. Internal - market position related to core capabilities and resources.
• Functional strategy - relates to the internal areas within a business unit, eg HR strategy, R&D strategy, IT strategy etc.

B820 focuses more on the first two than the latter, but all are important. They all overlap however, and depending on the size of the firm, may be managed by one person, one group or multiple groups. So, strategy operates at different levels within an organisation

The world is always changing. Is your firm in a static context; that is - is its environment stable or controllable? Unlikely, there are changes all around, regulatory, technological, resource supply and demand etc. etc. So strategy occurs in a dynamic context.

Your strategy would be different if you were based in the Middle East or Africa rather than Europe, right? In fact, your strategy may well be different if you were based in rural north Scotland, rather than London. Record companies have had to adopt different strategies to cope with and try and exploit the arrival of the "soft" record - ie the digital download. So strategy is highly dependent on context.

 
How will I use it?

Remember Strategy:-

requires clarity in defining what is a strategic issue.
requires the manger to apply both logical and creative thinking and skills
operates at different levels within an organisation (corporate, business, functional)
occurs in a dynamic context
is highly dependent on context.