Strategy and execution are the 2 critical elements that drive a business. However, leaders often struggle even with defining—let alone devising and executing—an effective strategy. Many of those who are responsible to deal with it fall short of describing how they typically employ it. This failure takes its roots from the fact that there is no clear path associated with strategy.
Strategy is about making sound decisions about unforeseen problems. It’s about selecting the right options—about matters that are often quite ambiguous today but have great significance in the future—based on thorough contemplation, detailed analysis, and creative ideas. Broadly speaking, strategy encompasses these 3 main elements:
- A vision and direction
- A certain position or pattern
- A deliberated Strategic Plan to achieve strategic goals and vision
Great strategists execute their plans, analyze the results, evaluate their actions, and perform course correction based on the outcomes. They are not afraid of even revamping their approach entirely. Senior leaders should clarify their understanding of the concept of strategy and draw attention to the importance of differentiating between the 3 distinct types of strategies before formulating their own course of action:
- General Strategy
- Corporate Strategy
- Competitive Strategy
Let’s delve deeper into the 3 types of strategy.
General Strategy indicates how a specific objective will be achieved, with well-thought-out plans. The focus of this type of Strategy is on ends (objectives and results) and means (the resources we have to achieve the objectives). Strategy and tactics combined bridge the gap between ends and means; where Strategy deals with deploying the resources at our disposal while tactics govern their utilization. A pattern of decisions and actions marks progress from the starting point to achievement of objectives in General Strategy.
Senior executives need to deliberate on the following questions before devising their General Strategy:
- What do we do?
- Why are we here?
- What kind of business are we?
- What kind of business do we want to become?
- What is our purpose? What are the results we seek?
- What is our existing Strategy, is it explicit or tacit?
- What Strategy and plans may bring about the results we want?
- What resources we have at our disposal?
- Are there any constraints in terms of resources that limit our actions?
Corporate Strategy describes what a company does, the purpose of its existence, and what it aims to become. Corporate Strategy focuses on choices and commitments concerning the markets, business, and the organization. Corporate Strategy classifies the markets and the businesses in which a company will operate. This type of strategy is typically decided in the context of defining the company’s mission and vision.
A detailed assessment of the existing strategy, market, competition and environment is critical for devising the Corporate Strategy. Strategists indicate that there are critical elements that should be factored in while formulating Corporate Strategy. These elements include product or service offerings, resources, marketing and sales approaches, manufacturing capabilities / capacity, customers, distribution channels, technology, type of market and its requirements, and revenue and profit goals.
While formulating Corporate Strategy, senior executives should consider and seek answers to the following questions:
- What is our existing Corporate Strategy?
- Is our Corporate Strategy explicit or tacit?
- What are the critical assumptions that make our existing strategy viable?
- What is going on in the market—in terms of social, political, technical and financial environment?
- What do we seek to accomplish in terms of our growth, size, and profitability targets?
- What markets we are eyeing to compete in?
- What businesses we intend to operate in?
- What locations and geographies will we compete in?
Competitive or Business Strategy specifies for an enterprise the core reason on which it contests its rivals. It depends on an organization’s competences, advantages, and disadvantages compared to the market and the rivals.
Interested in learning more about the General, Corporate, and Competitive Strategies? You can download an editable PowerPoint on The 3 Distinctions of Strategy here on the Flevy documents marketplace.
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Organizations are continually searching for innovative ways of enhancing competitiveness. This is brought about by evolving external factors such as changing demographics, globalization, and technology. Because of changing dynamics, it has required managers to rapidly rethink and retool their organizational management strategies.
Coming up with the appropriate strategies calls for an increasing need for organizational diagnosis in developing and maintaining a competitive advantage. Researchers believe that in conducting organizational diagnosis, organizational effectiveness must be viewed from a systems perspective using a multidimensional approach in assessing the factors affecting enterprise performance management.
At this point wherein the role of organizational climate in business performance has become significant, there is a need for a business model that is most influential. To date, the Burke-Litwin Change Model is the best known and most influential model suitable when it comes to organizational climate.
A Quick Look at Burke-Litwin Change Model
The Burke-Litwin Change Model is seen as a conceptual framework that can best describe the relationships between different features of the organization, as well as its context and effectiveness.
According to Burke and Litwin (1992), Change Management models are not meant to be prescriptive. They are meant to provide a means to diagnose, plan, and manage change. Using the Burke-Litwin Change Model will provide organizations an effective diagnostic tool to improve overall organizational performance. It is a useful model for understanding the organizational change process.
The Burke-Litwin Change Model, as a change management tool, assumes 12 organizational elements that determine a change within an organization.
The Burke-Litwin Change Model 12 Drivers
The 12 key drivers of the Burke-Litwin Change Model interact with and affect each other. The change in the 12 key drivers brings about a series of changes in the structure, practices, and the system of the organization.
The 12 key drivers have been organized based on their specific roles within the organization.
- External Environment. The External Environment is the external influences important fo organizational changes. These are the economy, customer behavior, competition, politics, and legislation.
Throughput: Transformational Drivers. Transformational Drivers are those that make up the fundamental structure of an organization. It relates to the organization as a whole. There are 3 Transformational Drivers.
The 3 key drivers have over-riding importance of dealing with a change that is intended to share up “the way things are done around here.”
Throughput: Transactional Drivers
Transactional drivers are drivers that are more easily changed, but rarely have the same kind of impact on organization-wide performance. This concerns daily activities that take place in organizations and their mutual cohesion. There are 7 Transactional Drivers.
- Management Practices
- Work Climate
- Task and Individual Skills
- Individual Needs and Values
The Transactional Drivers can affect performance. However, performance can only be long-lasting if these key drivers are aligned. The 7 key drivers are critical in their role of supporting the change process.
Individual and Organizational Performance is the 12th key driver. It is the outcome of the change.
The 12th Key Driver: The Individual and Organizational Performance
The only thing that is constant is change. As output changes, so does the input and the factors of change. Individual and Organizational Performance is the measure of the effectiveness of the change. It measures the performance levels of both the individual employee and on the departmental and organizational level.
Individual and Organizational Performance can be measured on the basis of turnover, productivity, quality requirements, efficiency, and customer satisfaction. This is the key driver that impacts on the external environment.
Interested in gaining more understanding of the Burke-Litwin Change Model? You can learn more and download an editable PowerPoint about the Burke-Litwin Change Model here on the Flevy documents marketplace.
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