Elements of an Organizational Strategy

In the first part of this blog published in August, I discussed Michael Porter’s three generic strategies: Cost leadership, Differentiation, and Focus. The three main takeaways I wish to highlight before tackling this month’s main topic are:

• The ultimate purpose of any strategy is to remain competitive by creating value. Moreover, your strategy will help you stay aligned with the market, mitigate risks and optimize resources.

• Any strategy needs to be flexible enough for you to be able to adapt to your changing environment.

• A strategy can be one of or a combination of Porter’s strategies and/or the ones which will be discussed in this blog.

In this blog, I will discuss additional strategies which need to be developed and combined as part of your ultimate organizational strategy.

With each monthly blog, our goal is to provide you with the basics and to build upon the On Strategy – Blog’s Roadmap which, when completed, will hopefully provide an overall picture of the elements necessary to build and execute business strategies [1].

1 Eliminating the noise

The term “strategy” is frequently used to refer to various concepts – all you need to do is Google “top business strategies” and you will be faced with a myriad of lists and results including, but not limited to growth, customer intimacy, functional, niche, request-based, quality, innovation, etc. This creates enough noise to confuse the most seasoned professionals.

One of our hopes for this blog is to clarify some of the basic concepts, help eliminate the noise and put forward our approach of strategic development and execution by maximizing our ability to marry the research (real, actual, academic research!) with the practical.

2 The three levels of organizational strategies

Consider the three levels of the organization shown below. Depending on your role and the size of the organization, you will have to design and execute a strategy. Of course, each of these levels needs to be aligned with the one above and to the ultimate organization’s mission, vision, and culture [2].

One of the first things that you need to do is identify who your client is. Keeping in mind that everyone has a client, this could be your end user (patients, practitioners, consumers, etc.) or another function within the organizational value chain.

When building a strategy, your clients’ needs and expectations must be at the center of your reflections. Some of the “strategies” which will come up if you do decide to look up “top business strategies” online is “customer focus strategy” or “customer centric strategy” – these are not strategies; these are someone stating the obvious and taking up your precious time by presenting it as a strategy! Of course you need to be customer focused, why else would you exist if not to address a need that someone (a customer) has?

The strategies you develop are applicable for each level of the organization; it’s the tools and degree of assessment that change depending on your role and where it sits in the organization. The combination of all those strategies composes the overall organizational strategy [3]

2.1 Corporate Strategy

This is the top-level strategy, and it focuses on:

1. Focus on growth and/or survival

2. Organizational experience

3. Customer experience

4. Employee experience

5. Global strategies include:

a) Expansion – mergers and/or acquisitions

b) Diversification

c) Integration

d) Cooperation

e) Retrenchment – letting go of some services/products

f) Restructuring

g) Research/innovation/technology

h) Combination

2.2 Business Strategy

A business strategy level is best suited for the division-level and decentralized functions; it focuses on:

1. Focus on the competitive environment

2. Customer experience

3. Customer employee experience

4. Organization employee experience

5. Business strategies include:

   a) Cost

   b) Differentiation

   c) Focus

2.3 Functional Strategy

This is, by far, the most commonly neglected level of strategy, and it's often the root cause of operations going off track and causing significant damage. This damage manifests in poor morale, misalignment, and wasted time and energy. It focuses on:

1. Operationalization of the higher-level strategies

2. Effectiveness and efficiency of processes

3. Employee experience

4. Customer employee experience – this is when you consider that the different functions surrounding yours are also your (internal) customers

5. Organization employee experience

6. Strategies:

a) Operational strategy

b) Marketing strategy

c) HR strategy

d) Financial strategy

e) IT strategy

f) Sales strategy

g) R&D strategy

h) Etc.

Now, I need to specify that there is only ONE corporate strategy. But it’s important to specify the criticality functional strategies. Even though every function in the organization is aligned and thriving towards the one corporate and business strategies, each of these functions fills different roles and will help the organization achieve its strategy differently. It is imperative for the various functions to understand their position in the value chain and to develop their strategies to fully and efficiently fulfill that responsibility. Every functional leader has the responsibility to align their teams with the corporate and business strategies, to mitigate their risks, to optimize their resources, and to do so in the most efficient way possible (competitive advantage).

3 Final Words and Advice

Developing a strategy, be it corporate, business or functional, requires know-how, finesse, the right data, asking the right questions, and using the appropriate tools for the appropriate level and at the right time. The information presented above which are researched, studied and proven.

One of our strengths at Cedar Strategies is to eliminate the noise and maximize our ability to marry the research with the practical therefore helping organization in developing the right strategy for them supported by realistic execution plans.

I will leave you with a few pointers to keep in mind:

• Growth, Customer Focus, Competitive strategies are not strategies – they are the guiding principles and goals that organizations strive for and accomplished through the development of the Porter three strategies and the ones I discussed above.

• Do not neglect the fact that each function of your organization must develop its own strategy on how to effectively and efficiently fulfill its role in the value chain while always aligned on the business and corporate overarching strategy, mission, vision, and culture.

• Using the right approach and appropriate tools for each level of the organizational strategy is essential – work with strategists and professionals to be effective, efficient, and focused.

• Eliminate the noise – focus on researched and proven ways of doing things while leveraging your own experiences, data, and organizational needs [4].

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  [1] Our blog addresses business strategies. Product development strategy is a discipline of its own with its own approach, mindset, and objectives.

  [2] Andrews, K.R. (1971) “The Concept of Corporate Strategy”, Third Edition, Dow Jones-Irwin, USA.

  [3] Various authors and Bergeron, P.G. (2001) “La Gestion Dynamique”, Gaetan Morin, Quebec, Canada

  [4] Cedar Strategies© (2024)