Why a clear strategy definition is so critical for the success of an organization?

The companies that do not have a clear strategy definition usually fail to execute their strategy and end up at a competitive disadvantage. Lack of clear definition of the corporate strategy hinders its employees from top down in making the right tactical and strategic decisions. They often end up making decisions that puts the business units on the path of divergence rather than convergence toward the corporate strategy. It makes the organization less agile to the fast changing needs of the business. It affects all aspects of the business units from hiring the right skilled professionals, developing the correct processes, and investing in IT systems that will add greater value to the overall organization’s goal.  Most organizations assume that the annual budgeting process and strategic-planning process companies go through is enough to ensure competitive success. Even a great strategy if not clearly defined will never get fully implemented due to lack of understanding and misinterpretation by the employees.

What are key aspects of the strategy definition that makes it crystal clear for its leadership team and employee? Here are few characteristics of a corporate strategy definition.  It should be precise, should not be more than 40 words. Everyone in the organization should be able to understand it and be able to apply it while making difficult decisions that will align with the corporate goals and direction of the company.  Strategy definition should be created based on careful analysis of the landscape which includes corporation’s capabilities, nearest competition’s capabilities and customer needs. The company should understand its customers, their wants and needs, and how to best serve them. The company should find its strategic spot which is where it meets its customer’s needs in way that the competition can’t, given the context it competes.  Strategy definition is not a mission statement; it does not define the value of an organization, or its vision. It describes the employees the organizations competitive game plan. What it wants o achieve as an organization, who are its customers, what makes its different from the competitors, what gives the organization the competitive edge. It should define and implement criteria on how to measure success towards its goals.  Strategy definition should act a guide that the employees can refer when making daily corporate decisions. Without clear strategy definition and proper guidance to the leadership and employees the strategy never gets fully implemented in an organization.

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