Strategy is a trigger word for many people. We tend to be very cynical about it – and often for good reason. It’s an annual ritual in many organizations – a box that needs to be checked off once a year. The development process is often disconnected from the messy reality of the real world. Writing is routinely delegated to specialists without meaningful input from the people who will have to make the strategy work. When it’s done, people justify what they are doing by making tenuous connections to lofty words in the strategy document. Then it is largely ignored until it’s time to create another one next year.
Real strategy is different. It’s not a process or a document. It’s the DNA of an organization – the genetic code that dictates who the organization is, and how it acts in the world. Strategy defines its role and purpose in a larger system and how it creates value for others.
Strategy comes alive in the flesh and blood of the business model that gives each organization a unique identity: its customers; its value proposition; the way it connects with its customers; the customer experience; what customers pay and how; assets needed to enable the business; activities required to function effectively; suppliers and partners; and the costs of working in the way it has chosen.
There are infinite choices for each of these elements of the business model, and in the ways they can be combined. However, only a few will be viable. It is the genius of entrepreneurship to find novel combinations that work.
Crafting and refining an organization’s business model is a creative design process. To be truly original, we have to avoid the temptation to copy others. While much of the economy is crowded and hyper-competitive, there will always be wide open spaces that welcome and reward pioneers. Organizations must innovate constantly in a rapidly changing world.
The most effective organizations see strategy development as a participative design process that, depending on the nature of the strategy, involves diverse stakeholders working across departmental boundaries, and at all levels. The process can also include customers, partners and suppliers. Many organizations now collaborate across sector boundaries. Business, government and NGOs work together to set shared goals and realize shared benefits. When strategies are created together in this way, every participant contributes their own unique perspective, and the process is purposeful, meaningful, and alive.