Are you ready to get started with corporate strategy?
If so, you’ve come to the right place.
An effective corporate strategy is a crucial component of any successful corporation. A well-crafted strategy has the potential to cause significant growth, an increase in profit, and long-term success. However, a poorly-planned corporate strategy can result in disaster.
So, the question is, how can you create a successful corporate strategy? Follow the experts.
In a recent query, we asked a number of CEOs with a background in corporate strategy these three questions:
- What tools/resources do you use to develop a powerful corporate strategy?
- Do you consult outside help for building a strategy? Why or why not?
- What tips do you have for individuals looking to improve their corporate strategy?
In this article, we will explore their answers to give you an in-depth look at what it takes to assemble a corporate strategy that will work in your favor. Before we begin, let’s address the basics of this subject. If you’re already well versed on the topic, feel free to skip to the good stuff.
What is Corporate Strategy and Why is it Important?
If you have earned the task of creating a goal-oriented strategy at the corporate level, or you’ve taken the responsibility upon yourself to improve your corporation, you may be wondering what exactly constitutes a corporate strategy.
In the simplest of terms, a corporate strategy is similar to a business strategy, but on a much larger scale. While a business strategy is used to acquire customers and turn a profit within the perimeters of a single business, a corporate-level strategy is used to oversee and improve several businesses, branches, and other entities under the same umbrella. Unlike a business strategy, a corporate strategy is created with a primary focus on managing and distributing resources, as well as predicting and preparing for risk and return across several business units.
What is the Benefit of a Corporate Strategy?
If a corporate strategy fulfills its purpose, then it will greatly improve the corporation. An effective corporate-level strategy can be used to accomplish a number of goals and provide several benefits. Such a strategy can accelerate growth, increase profits, reduce costs, eradicate counterproductive resources or individuals, distribute valuable resources effectively, and so much more.
The results of your strategy are limited only by your ability to create one. Use these tips from professional strategists to develop and fine-tune a killer corporate strategy.
Tip #1: Avoid Myopia
Myopia is the inability to see distant objects due to an unflinching focus on whatever is right in front of the eye.
In other words, myopia is a detrimental lack of foresight or a stifling case of narrow-mindedness. Brian, an entrepreneur and business consultant of more than 20 years, offered some advice to help avoid this problem: “I always like to start from the inside out to avoid corporate myopia. Myopia is #1 reason strategies fail.”
How can you sidestep this harmful mistake? With tip #2.
Tip #2: Research, Analyze, Repeat
The most common pieces of advice that we received from the CEOs who contributed to this post was to research and analyze extensively. When asked about the tools or resources that are used during corporate strategy development, Nicholas, a co-founder, and managing partner at Lumo Dash stated that “Market intelligence is the bedrock for your corporate strategy. Everything becomes easier when you have a clear understanding of the market movements and trends.”
So, what specifically should you analyze?
In short — everything.
As you develop your corporate strategy, you should gain a complete understanding of your corporation and the market from the inside out. Here are just a few factors to consider when conducting your studies:
- Market movements and trends
- Market opportunity
- Market segmentation
- Competitive forces
- Environmental factors
- Cost vs. Capital
This list could go on for much longer, depending on your industry and how specific you want to make it.
What tools or methods can you use for thorough analysis?
There is a great myriad of ways to accomplish a thorough and effective analysis, many of which came recommended by our participating candidates. Incorporate these methods and resources into your analysis for a detailed set of data that will be helpful to your corporate strategy.
1) Enlist the professional services of a market research firm.
2) Study and use Michael Porter’s Five Forces Model.
3) Create a checklist for both internal factors and external impacts.
4) Complete a SWOT analysis (an in-depth breakdown of your corporation’s strengths, weaknesses, opportunities, and threats.)
5) Use mind maps, a visual way to organize information.
David Trafford & Peter Boggis, authors and Strategic Management Consultants at Formicio, also highlighted the use of frameworks for corporate strategy:
“…Frameworks to help frame the strategic questions and guide strategic thinking… including: strategy as a tool for changing organizational trajectory; trajectories of strategic reality, opportunity and intent; exogenous and endogenous navigating forces; organizational capabilities vs individual competencies; strategic axes and strategic signature; operationalizing vs implementing strategy; operating and organizational design principles; and collective leadership.
Brian at ProStrategix shared a few favorite tools to use for external factors including: “market Opportunity Analysis (size, growth, competitive concentration), benefit need-gap within top markets, external force field analysis,” and “competitive assessment(s) in top markets.”
Making use of the right tools during the development of your corporate strategy can have a large impact on its overall success. And while you can accomplish a lot with the talent in your business, sometimes taking advantage of outside help can really drive the process to fruition.
Tip #3: Use Outside Help
The majority of the expert CEOs and corporate strategists we interviewed said that they rely on outside help to develop powerful and effective corporate-level strategies.
Nicholas, one of Lumo’s co-founders and managing partners, placed great value on seeking outside help from a variety of different sources. “Outside help is critical for moving into new markets or product spaces. It is simply impossible to stay up to date on the movements of multiple industries without it.”
But is it enough to seek outside help from one group of people?
Professional strategists value a complex variety of feedback in order to gain varying perspectives and outside point of views. Whether you choose to use reliable contacts or professional consultants, make sure you create a variety of sources.
Saatva’s CEO and Co-founder, Ricky Joshi, approaches the acquisition of outside help by taking into consideration the opinions of Saatva’s employees. “We gather feedback from employees to further solidify our corporate strategies because we feel it’s important for company policy to reflect the diversity of the employees present. If you’re looking to improve your corporate strategy, I suggest gathering ideas and feedback from employees first, as their input is imperative to driving the company forward.”
Extra Tips and Takeaways
In addition to the three tips outlined above, our participants provided some useful advice and takeaways that may help spark some ideas for your own corporate strategy.
Andrew, the CEO at Money Crashers, recommends branching out when it comes to tools: “play around with some of the many tools out there which are available for assistance when developing a corporate strategy. What works well for competitors may not for you, so a little research and test driving will be important. Stick with the resource that gives you the best results.”
Ricki Joshi places the focus on the mission: “when building a corporate strategy, we first look at our mission and create from the top down. What do we want to accomplish, and is it in line with our goals and vision?”
David Trafford & Peter Boggis, offer some key points to keep in mind when developing a corporate strategy:
1) “Remember that the purpose of the corporate strategy is to change the trajectory of the organization to one that takes it to an improved (as opposed to default) future. The default future is the place it’s currently headed.“
2) “Understand how exogenous navigating forces are changing your context and shaping your trajectory of strategic opportunity. Remember that you cannot control exogenous forces, only respond to them.“
3) “Understand how endogenous navigating forces are anchoring your organization to its current trajectory of strategic reality. From this understanding, make informed choices on your trajectory of strategic intent – which is within your trajectory of strategic opportunity.“
4) “Make your trajectory of strategic intent meaningful to all those who were not involved in its development.“
5) “Operationalize your strategy by pulling from the future, rather than pushing from the present.“
6) “Successful corporate strategy requires collective, as opposed to individual leadership.”
To conclude this section, we’d like to share a quote from Steven J. Stowell, Ph.D. author of The Art of Strategic Leadership: How Leaders at All Levels Prepare Themselves, Their Teams, and Organizations for the Future.
“Organizations now expect their leaders to be much more forward-thinking and proactive than they ever have been before.
There are a handful of important characteristics that differentiate strategic leaders from leaders of other types. Organizations need to have more long-term, proactive thinking occurring among leaders at all levels of their business. Remarkable effort goes into creating goals, plans, and strategies. Most of the time, the strategy or plans aren’t the problems; it’s the lack of strategic leadership that’s the bottleneck. Simply put, the thing that is missing the most often is the leadership necessary to translate strategic ideas into reality.”
It’s Time to Create a Successful Corporate Strategy
Now that you know how the corporate-level professionals are assembling their corporate strategies, you can apply their methods and resources to your own design.
By using the tips in this article, you can create a powerful corporate strategy that will be successful in accelerating the growth of your corporation, increasing profits, and reaching any number of corporate-level goals. All it takes is mindfulness of what’s to come, a thorough understanding of your foundation and surrounding factors, and a little help from the outside.
Are you ready to apply these expert tips to your corporate strategy? Get in touch with CMOE to learn more today.