How clear does strategy need to be?

One issue that always comes up when doing work on business design or operating models is the question of a lack of clarity about the strategy. For example, the strategy says that the company will develop winning products and be closer to customers and be the lowest cost supplier. Or the strategy does not make clear whether the company is likely to diversify into new service areas or not. There are many ways in which the strategy can be unclear.

The text book advice is “you can’t make a plan until you know where you are going”. The implication is that you should stop work on operating models and processes and demand that more effort is put into clarifying the strategy.

This advice is usually unhelpful. The main reason is that it often takes a long time to clarify strategy. Not only does it involve a lot of analysis, but it is also often quite political. Managers need time to argue out differences of view. In addition, it is often necessary to experiment your way into a new strategy. In other words, most business design work or business architecture work needs to be done despite a lack of clarity about strategy.

My solution is to develop good design principles. Often it is not necessary to have all the strategy dilemmas solved to produce good design principles. Moreover, the process of producing good design principles will help move the strategy forward. Often the lack of clarity means that it is impossible to choose a precise point on one of the scales inherent in a design principle. This is OK. Often the strategy can at least define a direction of movement on the scale. But, the lack of clarity also has implications for the design: it should be flexible or easy to evolve and change, given the possible twists and turns of the strategy.

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About andrew campbell

Ashridge Strategic Management Centre Focus on strategy and organisation Currently working on group-level functions and group-level strategy
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