Through readings and case studies, I have learned about strategy, leadership, change management, how personality types come into play with leadership and strategy, and strategic management. I have even learned how Six Sigma activities can be strategic, as a continuous approach to management and improvement. Most important of these are being able to define and manage strategy while understanding the different approaches and perspectives and being able to execute and manage the change in the implementation of the strategy.
Strategy, as Michael Porter defines it, is “obtaining a competitive position or series of competitive positions that lead to superior and sustainable financial performance” (Ritson, 2013, p.9). Michael Porter, the father of the positioning school of strategy, came up with the Porter’s Five Forces: threat of substitute, bargaining power of suppliers, rivalry among competitors, threats of new entrants, and bargaining power of buyers (Institute for Strategy & Competitiveness, n.d.).
Although Michael Porter has a good definition of strategy and is extremely influential with his Five Forces, I like the existentialist strategy definition by Kenneth Andrews in his 1971 book, The Concept of Corporate Strategy: “the pattern of objectives, purposes, or goals and the major policies and plans for achieving these goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be” (Ritson, 2013, p.10).
The other two schools of strategy besides Porter’s positioning school are the planning school of strategy, stemming from H. Igor Ansoff’s Corporate Strategy (Strategicthgr3, 2010) and the resource-based school of strategy, developed by Berger Wernerfelt in 1984 and Jay Barney in 1996 (Martin, 2015). The positioning school, by Porter, is good for most companies, in practicality. Academically, the resource-based school seems correct, but is not used much in the real world. The planning school is extremely thorough and bureaucratic, so it is used by large corporations (Martin, 2015).
Strategy may occur at the corporate level, the business level, or the functional level. While the functional level is clearly the functional organizations within a company, such as the sales, finance, or engineering departments, the separation between the corporate level and the business level takes more thinking. Roughly: Corporate strategy is the high-level strategic planning driven by financial target (or necessities for survival) and stakeholders. This is “What does the company need to do to be profitable and show value to our shareholders?” Business strategy is a step down in that it is considering competition, products, and markets.
Strategy should be derived from the mission, vision, values, and goals (or the mission and objectives in Ritson’s hierarchy of process) (Ritson, 2013, p.16). From the strategy, the tactics and tasks are derived. Strategy is often tied closely to the culture of a company and the politics within the company. This may not be a causal relationship, but the culture reflects the strategy and the strategy reflects the culture. Without cultural alignment to strategy, strategy cannot succeed.
Human resources departments play a huge role in enabling the success of corporate strategy. A strategy may require a certain amount of growth, sales, expansion, integration, or production that the company does not have staff to support. If talent, sufficient head count, skilled managers, or technical skills are lacking, the human resources team can build a talent pipeline and candidate pool that are in alignment with the strategy of the company. Companies that lack the funds to acquire talent or lack the regionally available talent needed run into a constraint at human resources.
Dr. Passenheim reminds business strategists that change management is crucial when considering human resources and the human element of strategic management and change. Lewin’s Change Theory discusses the necessity of unfreezing, changing, and refreezing the understanding of people in order to execute successful strategic changes (Passenheim, 2010, p.13). Bullock and Batten’s Phases of Planned Change explain deeper how to explore, plan, act, and integrate changes. It is worth noting that the planning stage includes a lot of communications and getting agreement from stakeholders, while the action and integration phases collect feedback and make adjustments (Passenheim, 2010, p.16). The communication and feedback loop in change management is crucial to use and acknowledge for successful strategic change.
In conclusion, strategic management is a huge can of worms and I admit that I am just scratching the surface. I have found that I am extremely good at identifying strategy and formulating tactical approaches to execution of strategy. I am also strong at seeing strategic options given a business case. Where I can improve the most is in implementation of change management. Change management needs to be an academic (or self-driven learning) foray that I wade into. Change management will allow me to be successful in executing the great ideas that I help architect.
Institute for Strategy & Competitiveness. (n.d.). The Five Forces. Retrieved from https://www.isc.hbs.edu/strategy/business-strategy/Pages/the-five-forces.aspx
Martin, R. (2015). Strategy Is About Both Resources and Positioning. Retrieved from https://hbr.org/2015/04/strategy-is-about-both-resources-and-positioning
Passenheim, O. (2010). Change Management. Book Boon. Retrieved from https://bookboon.com/en/change-management-ebook
Ritson, N. (2013). Strategic Management, 2nd Edition. Book Boon. Retrieved from http://bookboon.com/en/strategicmanagement-ebook
Strategicthgr3. (2010). Summary of the Planning School Model. Retrieved from https://strategicthgr3.wordpress.com/2010/01/21/summary-of-the-planning-school-model/