Businesses use organizational strategy to establish the priorities and set the direction for the business. Many organizations experience the gap between what they say and what they do and struggle to fill it.
Sometimes we need more than a big picture vision to guide the actions of a company. That’s where organizational strategy comes into place.
What is Organizational Strategy?
Organizational strategy is how a company’s mission is brought to life and in everyday operations. It is the direction an organization takes to achieve future business success.
An organizational strategy links mission, strategy, goals, and work and helps everyone perform at their best.
How does Organizational Strategy work?
An effective organizational strategy helps set direction and priorities, align teams and departments, simplify decision-making, and adapt to obstacles.
There are three levels of organizational strategies:
- Corporate-level strategy is the company’s long-term vision stating what businesses and the organization should be involved in, competitive advantages in the industry, and establishing optimal business practices.
- Business-level strategy: This step answers the “how-to” questions of the organization by understanding the business and the external environment.
- Functional-level strategy: It improves the internal efficiencies of each sub-segment like “Marketing”, “R&D”, etc. and aligns them to the corporate strategy.
How is Organizational Strategy implemented in business?
Businesses fail with a suitable strategy formulation but poor strategy execution. Dividing the entire strategy into different parts makes it much easier to execute it.
Take your long-term mission (10 years) and divide them into objectives for five years. The goals can then be divided into shorter-term projects and portfolios for the next 2-3 years. The projects are then divided into monthly, weekly, and daily tasks, making it easier to execute the organizational strategy.
There are a few key aspects one needs to consider to execute an organizational strategy successfully:
- Commitment to the Strategic plan
- Jobs-to-strategy alignment
- Clear communication to empower employees
- Measure and monitor performance to track progress
- Balance innovation and control
- Organizational strategy comes with its own set of skills and challenges for setting strategic goals, formulating a plan, and executing a strategy.
Future of Organizational Strategy
The future of organizational strategy is based on three pillars: Purpose, Value Agenda, and Organizational Culture.
Here’s what organizations should do to prepare for the future:
- Build data-rich agile tech platforms
- Flatten organizational structure by simplifying the organization
- Take an ecosystem perspective and collaborate with others
- Accelerate organizational learning by upskilling and reskilling
- Make faster and more powerful organizational decisions by adapting new models
- Treat talent more scarce than capital and introduce next-generation performance management
- Map talent and values and take employee experiences to the next level
Thus, the older organizational strategy formulation and implementation principles will become obsolete. Automation, rising interconnectivity, changes in career aspirations and employee motivations will shape the future of organizational strategy.