5 Levels of Strategy Implementation

How advanced is your company‘s Strategic process?

There is a big difference in the level of sophistication of the strategic process of companies. Having been involved in the strategic process, ranging from startups to public companies for two decades, I have a perspective on which level to strive for in corporate strategy and implementation. As a CEO I got the chance to build a system of methods and programs, utilising the strategic process to prioritise and synchronise the companies’ resources, and at the same time building a strong framework for both the management and the departments and individual teams of the company.

The strategic process can be the main competitive advantage of a company; a facilitator of value creation which helps to coordinate, prioritise, innovate and manage. This applies not least when managing modern companies, operating in dynamic market environments with human resources more important than ever. Where expert knowledge is spread around the organisation, making the old hierarchical style top down management insufficient to coordinate and prioritise resources.

I have however seen that companies differ radically in how advanced and developed their strategic process is. Here are my suggestion on 5 levels of sophistication of strategic processes within companies:

1. No strategy

Many companies have no formal strategy or strategic process. The company runs from some kind of tacit direction and ad hoc decisions. This could work for small companies, maybe operating with a strong visionary founder or culture, often with not too many changes in the external environment. However when companies grow in complexity, they usually need a formal strategic process to survive in competition, not least to co-ordinate and prioritise their resources.

2. Strategy as an office document — ticking the box

In some companies strategy has been put in a document of some form, but it is more like a tick in the box strategy to demonstrate a few times during the year in a company presentation. In some cases there is even a complete decoupling between what the document states and what the company does and most often there is no continuous process around the strategy implementation. This kind of strategy work has no value other than to make others believe that you “have a strategy”. This is in my view waste of resources and even damaging because it is understandably seldom popular with the people working within the company, that witness and are frustrated the decoupling between what the company says and what it does.

3. Top Down Strategy- Key projects implementation

Most companies have at least a “top down” strategy and implementation working for them. Typically there is an annual or bi annual strategic effort to discuss the external environment of the company and most important projects. The outcome from these sessions are often established as the key projects of the company — “the strategy”. These projects are then implemented from the top down — by the management and/or project managers or teams. This type of strategic top down implementation is often effective and important, but the downside is that it does usually not have relevance or draws input from large parts of the companies teams and employees. For a large part, of the employees and even managers, the strategy is not visible since they are not part of making it, motivated or guided by it. Therefore, although this top down approach is effective and necessary part of the strategic process, it does not in my view utilize the full potential of the strategic process.

4. 360 degrees Strategy Implementation — Company wide top down and bottom up

To my experience it is most value creating to have the strategic process involve all teams and employees working within the company. In modern companies a large part of the company’s knowledge and experience is spread around in the company in individual experts, managers and teams. It is a great opportunity to use the strategic process to build on unique insights from all the experts in the company and at the same time keep them, productive and motivated through participation.

To do this the strategic process needs to be continuously running throughout the company, both a top down effort by the management but also a bottom up push from the teams and employees. To be able to involve all employees the high level strategy needs first to be visible and clear to all the employees and teams. The company still runs it‘s projects top down, but encourages its teams to build on their unique perspective, position and knowledge to make their own goals and projects. There are various modern management techniques and programs to support building this process within companies, for example building on team oriented goals with implementation through regular meetings, visual management etc.

Building this kind of continuous company wide strategic implementation process can become the main driver of prioritisation, coordination and change management within the company. At the same time being the most important management process, helping the coordination of managers, teams and employees.

I have seen, adding a “bottom up” strategic process , transform the management of companies. Prioritisation and synchronisation of departments and motivation of employees increase, with company wide goals and at the same time top down and bottom up execution by the management, teams or even down to individual employees. It takes an effort to put in place in the beginning, but with continuous process over time, this type of strategic implementation becomes a deeper and more natural part of the daily operation.

5. Strategy is the culture — Strategic process is so strong that it becomes rooted in the culture of the company

Peter Drucker famously said that “Culture eats strategy for breakfast”. In fact culture is created by interactions and shared believes that are built over time within the company. Disciplined continuous company wide implementation of strategy, with the involvement of all employees, leads the strategic process to become, with time, rooted deep in the company culture. I believe this is something to strive for because this level of sophistication means that there is less effort in the implementation, it takes less resources since it has become the way of operating within the company. Every employee understands it‘s role and connection to the strategy of the company, where opportunities for revenue growth and efficiency are driven around the company, often without too much top down effort but more as an output of daily routines. This type of strategy implementation also fits well more decentralized modern companies that organize more and more in loosely coordinated teams.

At this level the strategic process can become the most important value creating process of the company. It drives the company forward and can even be seen to become an important pillar for the company’s competitive advantage.

Not running a strong company wide strategic process can at the same time be the largest waste and inefficiency of the company, which can be a very dangerous drawback in todays disruptive competitive environment.

Companies are different in terms of their management style and strategy work. However when companies reach certain size, complexity and building on teams of experts, they need to build a strong and clear strategic process and implementation, ensuring co-ordination and prioritisation of resources throughout the organisation. Strategic process that becomes rooted in the culture of the company is in my view the level to strive for. It takes vision, determination, time and effort to build but can be vital competitive advantage for modern companies.