The Strategy-Focused Company

One of the challenges of contemporary executives/managers is to guide the company in terms of strategy. It is not enough to develop a strategic plan once a year, in a bureaucratic way, so that the company can consider itself strategy-driven. It takes much more than that.

Defining a strategy-focused company/organization succinctly is not easy, so let’s take a look at a few of the characteristics that an organization intending to use strategy to guide action must have.

If we consider the Eight Foundations of Excellence found in World-Class Companies (as advocated by the National Quality Foundation) as characteristics of strategy-focused companies, we see that they should be guided by: systemic thinking, organizational learning and innovation, transformative leadership, commitment to stakeholders, adaptability, sustainable development, process orientation, and value generation. These principles express very well what a strategy-focused company is.

In their book The Strategy-Focused Organization, the creators of the Balanced Scorecard, Kaplan and Norton, explain five critical principles needed to build “strategy-focused organizations,” based on case studies developed in large companies such as Mobil, CIGNA, Nova Scotia Power, and AT&T Canada, among others. They are translate the strategy into operational terms; align the organization to strategy; make strategy everyone’s everyday job; make strategy a continual process; and mobilize change through strong and effective leadership.

Figure 1 illustrates the principles of a strategy-focused organization.

In addition, it can be said that a strategy-focused company believes that the ability to execute a strategy is more relevant than the content of a strategy. The psychology of its executives / managers is oriented towards performance, thus results. They believe that the opportunities for creating and adding value to people and society are increasingly shifting from tangible to intangible assets, i.e., from facilities, machinery and equipment to management of knowledge. Moreover, employees understand that formulation and implementation of strategy is an ongoing process and should involve all employees. It is an organization that ensures that the strategy is described and communicated effectively. It monitors indicators from a broader perspective, not just financial. Finally, it is an organization where all resources and activities align with the strategy.

The strategy-focused company is one that directs people, knowledge, capital, and technological and material resources in pursuit of the objectives proposed by the strategy.

In the next Management Tips, we will present a check list that may be useful for you and your team to evaluate whether the company where you operate is strategy-focused.

See you later!

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