Establish Company Focus by Setting a Strategic Foundation

Strategy Needs a Foundation

The difference between a strategy versus a list of objectives is that strategy is built off a solid foundation of analysis and coherent reasoning that sets directional focus. Companies that plan strategy without the right foundation will usually find themselves defining a multitude of objectives that sound like good things to do, but often create conflicting priorities, contradict company culture, and are incompatible with internal capabilities. Foundationless strategic objectives lack durability and will quickly get replaced with operational activities that command greater urgency. This pattern gives strategy planning a bad reputation amongst employees leaving them cynical and unenthused the next time strategic objectives are rolled out. Solid strategy planning can create a vastly different experience. When thorough strategic analysis is performed and a thoughtful strategic foundation is set, then a company strategy can be far more beneficial to the company and its employees. Priorities become clear, culture is reinforced, and core competencies are leveraged for strategic advantage. The Foundation block of the Strategy Whiteboard helps companies lay this foundation.

How to Set a Strategic Foundation

There are three steps to setting a strategic foundation. These are 1) Determine the Foundational Strategy, 2) Define a Unifying Objective, and 3) Compose a Core Competency Statement. Each of these steps build from the previous creating stacked layers. Once the Strategic Foundation is established, leaders can then decide on strategic focus and outcomes for employees to use as their focal points for guiding strategic actions. In a way, this is like navigational planning. The Foundational Strategy is the mode of transportation, the Unifying Objective is the destination, and the Core Competency Statement is the route to be taken.

1. Foundational Strategy

The Foundational Strategy describes the modality of the company’s strategy and is easily recognizable from an outside perspective. For example, an outside observer can readily distinguish the difference in strategies between brands like Walmart, Porsche, and Apple. All three surely have comprehensive strategic plans, objectives, and details that are not publicly visible. But even without seeing those details, an observer can tell that Walmart focuses on reducing cost to provide lower prices, Porsche focuses on quality to provide prestige, and Apple focuses on novelty to provide unique user experiences that can’t be replicated by other products. These are noticeable features characteristic of the companies’ foundational strategy. What is also evident is that these strategic differences are not cyclical choices that can be quickly changed. They are embedded into each company’s brand, operations, culture, and many other institutional qualities. Walmart can no more be a “quality” company than Porsche can be a “low cost” brand.

When determining the Foundational Strategy, a company must rely on its Internal Evaluation to see its Strengths and Weaknesses. With that context, a company can then determine how it scores on Quality, Cost, and Novelty. Based on how high or low a company scores on these three elements, the modality can be identified. There are seven modalities that can be selected for Foundational Strategy. These are:

– Cost Reducer

– Accelerator

– Pioneer

– Innovator

– Quality Leader

– Continuous Improver

– Disruptor

2. Unifying Objective

The Unifying Objective is that overarching quantifiable business-related outcome that serves as a tangible metric providing motivation and alignment for the entire organization.

3. Core Competency Statement

The Core Competency Statement pulls from the core competencies designated in the Internal Evaluation block creating a statement outlining what the company excels most at. This statement simply takes the core competencies and links them together in a sentence which becomes a guiding principle and foundational attribute of the company. It is also shared outside the company creating a level of accountability to core strengths for the organization to follow.