These pages abound in the Principles of Strategic Approach: how to get Advantage, how to Move the Field of Action. The most relevant Generic Strategies and their levels of application, corporate or for business units, are explained, offering a scheme that is useful when it comes to understanding the great diversity of strategic typologies that experts mention today. We will address the elaboration of the Strategic Objectives, a special tool: the Strategic Map and, we conclude with an analysis focused on Management by Objectives and its Implementation.
Introduction
On more than one occasion something interesting has happened to me: I am working in a company, and its specialists responsible for promoting and articulating Strategic Management, and even its managers, present the result of the Strategic Reflection (Internal-External Diagnosis) as if it will be the Strategy itself. When this happens, I interpret that they have not understood the meaning of the strategic exercise, perhaps they lost themselves in its complexity or have simply done it to please some interested and demanding party. A Strategic Diagnosis, it should be emphasized, is not the Strategy, it is just a means to reach it. Strategy is our victory scheme, which will then acquire dissimilar tactical expressions at every moment.About the Strategic-Tactical Approach itself is that it will deal with the work that is developed in the future.
Fundamental principles of the strategic approach
From strategic reflection we learn fundamental things: that the world is not at our disposal just because, that it is not offered to us without a significant cost, that it is not stable, that we need courage and the capacity for permanent self-improvement if we hope to consolidate our position, that we will also have to anticipate (and dislike) some achievements in pursuit of others to build with greater future probabilities. We know each other better and that offers us security, we know what we have and where threats can come from. Translating this knowledge into a coherent framework of actions that gives us a sustainable advantage is the end of the strategy itself. This strategy, essential to take it into account, will always be guided by two fundamental principles:
1. Get Competitive Advantage
This principle is essential, creating advantages is what distinguishes strategy from any other form of planning. According to the now classical theory of Competitive Forces by ME Porter (1980), the key to the growth of a company, and also its survival, is to install it in a position that is as less vulnerable as possible to the attacks of its opponents. direct and erosion that may be caused by customers with a lot of negotiating capacity, suppliers, new entrants or producers of substitutes. Strategy is looking for a way to take advantage of a position in the market. From other more current approaches such as the theories of Focus on Resources or Dynamic Capacities (Teece et al, 1997) the same principle is also fulfilled,The strategy pursues a competitive advantage, although from a different logic: it is useless if there are opportunities in the market, imbalance of forces, if I am not ready to take advantage of them. Having the necessary resources, especially those assets that are difficult to acquire - tacit knowledge and reputation, relational capital, core competencies - and the internal capacity to continue generating them, is what distinguishes me and will bring me the final victory.it is what distinguishes me and will bring me the final victory.it is what distinguishes me and will bring me the final victory.
2. Reconfigure the Field of Action
This principle is complementary to the previous one. The correct strategy is focused and implies taking the competition to the plane where we can be stronger. It is moving towards areas whose Critical Success Factors - CEF - are accessible to us and we can achieve superior performance in relation to them, where we combine our strengths and clearly defined market needs better than others. With strategy we always take the initiative to reconfigure the battlefield (areas of strategic activity) and come out winning. It is probable that we will have to adapt to the maneuvers and conditions imposed on us by our competitors, especially in oligopolistic markets where there is strong interdependence; We can be creative and innovative to survive this "strategic conflict" but,What will give us the advantage is to move to a terrain where our opponent cannot follow us, where the competition becomes irrelevant, whoever achieves this will have discovered the best way to serve the client's needs and will obtain a sufficiently profitable position. This is what “reconfiguring the field of action” consists of: concentrating on key factors, creatively using the degrees of freedom they offer us, seeking aggressive initiatives and building relative superiority (Ohmae, 1990).creatively use the degrees of freedom that they offer us, seek aggressive initiatives and build relative superiority (Ohmae, 1990).creatively use the degrees of freedom that they offer us, seek aggressive initiatives and build relative superiority (Ohmae, 1990).
Let's see, for a better illustration, some case studies where these principles are better applied and understood:
1. Honda defeated in its natural market the main manufacturer of motorcycles in North America, Harley Davidson, selling touring motorcycles, light equipment that they belittled in favor of large displacements. Honda took on the challenge of modifying the representation that existed about who used this type of vehicle, created new needs, altered the battlefield to leave Harley Davidson with a meager 5.7% of the market.
2. The Japanese Watch Industry (the Hattori Group: Seiko, Alba and Pulsar; along with Casio and Citizen) made Swiss watches almost completely disappear from the massive “C” market segment (a decrease of 20 million units between 1970 and 1980) thanks to its low price policies and incorporation of electronic technology. They went to a field of technological application that the others initially did not accept, moving prices in a timely manner.
3. Pepsi Cola, in 1970, launched an attack on Coca Cola trying to reposition it with its “Generation Pepsi” ads, which painted it as the drink of young people, while Coca Cola, by deduction, was for older people. This maneuver was very successful, Coca Cola could not be sold both as a classic and a drink for young people. Pepsi then concentrated its action on specific local markets and characteristic distribution channels where Coca Cola only reached diffusely since it had to cover all its positions. As might be expected, Pepsi Cola's share increased dramatically with these combined actions redefining each competitor's field of operations.
4. Novo Nordisk is a Danish insulin manufacturer company. Historically the insulin industry has focused its attention on physicians, who act as prescribers of the product. The purity and quality of insulin was the fundamental parameter that traditionally arbitrated competition between companies. However, the enormous progress achieved in the development of this compound meant that all the companies achieved practically the same quality standards, with which the differentiating element until that moment disintegrated.
Novo Nordisk envisioned the possibility of breaking away from traditional competition and preparing its own battlefield by directing its attention not to the doctors who prescribed the product, but to the patients themselves. Novo Nordisk noticed the many drawbacks that the administration of this medicine presented for diabetics: they had to always carry syringes, needles and their own insulin; and much more important still: its intravenous administration caused them an unpleasant feeling because this practice can have a social stigma.
This analysis led Novo Nordisk to design and market the NovoPen, a pen-shaped device for administering insulin, with various easily dispensable doses. Novo Nordisk's strategy transformed the boundaries of its industry, going from being an insulin-producing company to a company specializing in the treatment of diabetes. Currently, it controls more than 60% of the market in Europe and 80% in Japan, thanks to shifting its focus from insulin prescribers to the patients treated with it.
5. Nabi, a bus manufacturer from Hungary, observed that the price of each bus was not the most important cost that a buyer had to bear. The useful life of these vehicles can be up to twelve years. The most onerous are the fleet maintenance costs: repairs after accidents, constant wheel changes due to the high weight of the vehicles or the corrosion of the bodies. Yet all the manufacturers seemed to be fighting fiercely to reduce only manufacturing costs.
Nabi thought about finding a solution to the high maintenance costs and for this he designed a bus as it had not been seen before: he built the bodies with fiberglass instead of steel, as was the usual. The fiberglass prevents corrosion, allows a much faster dent repair, at a much lower price than steel and, as if that were not enough, its lightness reduces the total weight of the vehicle by around 35% and Consequently, much less fuel is consumed. Although Nabi charges slightly more than the industry average for each bus, it has managed to consolidate its market by reducing long-term maintenance cost and polluting emissions. All this, together with an avant-garde design, has made Clients have seen their Value grow.Not surprisingly, The Economist Intelligence Unit named Nabi one of the thirty most successful companies in the world.
6. Cirque du Soleil, created in Canada in 1984 by a group of actors, has reached more than 40 million people in 90 cities around the world. At first glance, few would consider it a good idea to start a company related to the world of circus. In fact, the circus, as a traditional concept, is in decline. Its natural audience, children, have long been more interested in electronic games than what happens under a tent. From a strategic point of view, the circus industry was clearly unattractive.
Before Cirque du Soleil emerged, circuses were immersed in a fierce competition to see who could attract the best clowns, the best trainers, in short, who could have the most stars among their cast. This caused costs to skyrocket amid a collapse in demand for these types of shows. This battle ceased to make sense for Cirque du Soleil, which could not be considered either a circus or a theatrical production. In fact, it managed to break the boundaries of the industry, as they were known until then, by offering people the fun and excitement of the circus (maintaining its traditional symbols, such as the tent,clowns and acrobatic exercises) along with the sophistication and intellectual richness of the theater (each performance has its own storyline, there is dance, music composed especially for the occasion, etc.)
On the other hand, Cirque du Soleil performances are aimed at audiences of all ages (not just children accompanied by their parents), which, together with the unique character of each of their tours, has dramatically increased demand. of this type of shows, with the addition that it can charge rates similar to those of the theaters (higher than the entrance to a traditional circus). Cirque du Soleil has managed to create a space characterized by the concept of an innovative show, clearly differentiated from the pre-existing industries (circus and theater), has reduced costs in those factors in which the industry had traditionally competed and has expanded the market frontiers by diversifying the target audience.
Generic strategies and application levels
With these basic principles in mind, well illustrated in the cases brought up, and what we already know from our diagnosis (Driving Force, FCE, Balance of Forces, etc.) we are ready to propose the general strategy of the company.
Each winning strategy is like the fingerprint of the organization is its time, it is the answer to a unique and unrepeatable combination of factors. It is possible, however, to speak of the existence of certain priority models that are established according to the conditions of the environment, product life, financial criteria, market position, internal capacities, access to resources, and that define strategic lines.
These alternatives are known by the name of Generic Strategies, a notion that was born in the 80's and guides us, given its descriptive power, about some of the most characteristic and successful types of strategies. These types of strategies can be divided into at least two levels of application2: Corporate Strategies and Business Strategies.
A corporate strategy considers the organization as a whole and defines its general direction. The strategy at the business unit level, on the other hand, focuses on building and sustaining a specific competitive advantage. It would be the way in which the Corporate Strategy becomes reality. Strategies at the level of the Business Unit or Areas of Strategic Activity We will see the two most consistent proposals that also summarize practically all the contributions on the subject.
Porter's typology
According to ME Porter (1985) we can identify three generic strategies to create a competitive position, make it defensible in the long term and stand out above the competitors in the sector. These are: General Leadership in Costs, Differentiation and High Segmentation or Focus
Cost Leadership: In a sector in which economic income is stagnant and the prices of raw materials tend to rise, it is likely to assume that maintaining a low cost position can enable the company to obtain higher than average returns. This will allow you to set your prices at the same level or below the competition. To achieve these ends, the structure and culture of the company, as well as the attention of the Directorate, should be oriented to cost control. The greatest risk is that technological changes quickly nullify the advantage gained and low-cost technology quickly diffuses among competitors.
Differentiation: It consists of making the company is perceived as unique in the market. Customer loyalty is pursued, achieving isolation from competitive rivalry with differentiation. The challenge is that when a product is no longer exclusive, it no longer serves the differentiation strategy. Imitations (so common) also reduce the impact of this strategy. RM Beal (2000) collects various qualifications about the differentiation strategy, concluding that there is a differentiation strategy based on innovation, marketing, quality and service.
High Segmentation: It is about focusing on a particular portion of the market. In this way, the company can better serve its strategic objectives, more effectively than competitors who do so generally.
Differentiation and Cost Leadership strategies are not incompatible, according to all the evidence they can be combined, there are positive correlations between both types of competitive advantage (Calori and Ardisson, 1988).In the same way, the efforts to differentiate and concentrate the attack a specific market segment can be an effective conjunction (case of Pepsi Cola) Combined strategies, in addition to being stronger, make it difficult to be deciphered and copied by competitors.
Miles and Snow typology
RE Miles and CC Snow (1978) concentrating on the conditions of the environment that surrounds the organization distinguish three strategic configurations: Prospective, Defensive and Analytical.
Prospective Organizations (explorers) carry out a process of innovation and continuous development of new products and markets, through a permanent search for opportunities within their framework of competencies. The organization responds quickly to the first signs of new opportunities. In general, companies that follow this strategy create changes to which the competition must react, they act in a dynamic and growing environment. They require a flexible internal structure and systems to facilitate innovation. This type of strategy is consistent with ME Porter's (1985) Differentiation Strategy.
Defensive Organizations have limited control over the products and markets where they operate, they basically try to defend their positions according to the criteria of efficiency. This strategy, contrary to the previous one, has to do with stability; Instead of making major changes in technology and structure, the defensive organization focuses on improving the efficiency and effectiveness of the methods it already has (Cabello y otros, Revista CEDE, No. 7). This strategy can to be equated many times with the Leadership in Costs proposed by ME Porter (1985).
The Analyzing Organizations are a symbiosis of the previous two by acting in a prospective or defensive way depending on the business units in question. The company in this case tends to maintain a stable business core while innovating at the perimeter, representing the middle ground between the other two strategies.
Corporate Strategies
A lot has been written about corporate strategies, on the verge of confusion, but a generalization can be drawn and say that the most commonly defined strategies at this level are: Maintenance, Expansion, Diversification, Sanitation, and Liquidation Strategies (García and Sabater, 2004).
Maintenance Strategies
A company or corporation undertakes a Maintenance Strategy when:
- It focuses on maintaining the market share achieved up to that point, doing the same as it has done up to now. (“Maintenance” Strategy by Buzzell et al., 1975. “Continuing” Strategy by Galbraith and Schendel, 1983) It mainly focuses on a single business (“Simple Business” Strategy by Rumelt, 1974) Seeks to achieve a good relationship between costs and prices, trying to maintain a position in the market (Herbert and Deresky's "Stability" Strategy, 1987).
Expansion Strategies
Growth generally refers to increased sales, market share, profit, or the size and structure of the organization. A company or corporation undertakes an Expansion Strategy when:
- Seeks greater market share for current products through increased marketing forces (Ansoff's "Expansion" Strategy, 1965; Mintzberg's "Elaboration" Strategy, 1988; Kotler's "Intensive Growth", 1992). geographic expansion, targeting a new market segment, entering a new distribution channel (Ditto) Seek higher sales by improving or modifying (developing) the current product, adding functions or features, expanding the product range, developing a new generation (Idem) It is proposed to acquire or increase control of the company's supply sources (Strategy of "Integrated Growth, Backward Integration" by Kotler, 1992; Strategy of "Expansion" of Mintzberg, 1988) It seeks to increase control over distributors or retailers,the commercialization channel (Strategy of "Integrated Growth, Forward Integration", by Kotler, 1992; Strategy of "Expansion" of Mintzberg, 1988) Seeks the greater control of competitors through absorption or other ways (Strategy of "Integrated Growth, Horizontal Integration ”, by Kotler, 1992; Strategy of“ Expansion ”by Mintzberg, 1988).
Diversification Strategies
A company or corporation undertakes a Diversification Strategy when:
- It is characterized by the acquisition of other assets and the development of markets (Ansoff's “Diversification” Strategy, 1965; Hofer and Schendel's “Profit” Strategy, 1978; Mintzberg's “Expansion” Strategy, 1988) Add new products but complementary to existing ones (Rumelt's "Related Diversification" Strategy, 1974; Kotler's "Concentric Diversification" Strategy, 1992; Mintzberg's "Expansion" Strategy, 1988) Develop activities without any relation to existing products or markets, creation of a conglomerate (Rumelt's "Unrelated Diversification" Strategy, 1974; Kotler's "Pure Diversification" Strategy, 1992; Mintzberg's "Expansion" Strategy, 1988)
Sanitation Strategies
The market has apparently stopped growing, matured and is now faced with the choice of saturating or regenerating. This is where the Sanitation Strategies are located. A company or corporation undertakes a Sanitation Strategy when:
- It is aimed at slowing down, stopping and rebuilding the activities carried out by the company (“Sanitation” Strategy by Herbert and Deresky, 1987) It introduces improvements that prevent the decline in profits (“Sanitation” Strategy by Hofer and Schendel, 1978). the business and transfers those activities that do not bring benefits (Strategy of «Concentrate» of Hofer and Schendel, 1978) Redevelop the first main activity developed by the company efficiently or reduce the business activity (Strategy of «Reconsideration» of Mintzberg, 1988) Attempts to extend the life of certain products, but without performing any improvement activities on them (Galbraith and Schendel's «Low Commitment» Strategy, 1983).
Settlement Strategies
These are some of the strategies when we operate in a declining market. A company or corporation undertakes a Settlement Strategy when:
- Their priority is to obtain high profits in a short time, usually dominating a market niche. Its goal is to liquidate (Buzzell's "Harvest" Strategy, 1975). It is responsible for producing a rapid divestment and going out of business (Galbraith and Schendel's "Harvesting" Strategy, 1983).
Strategic Goals
The strategy that we adopt is specified with the approach of Strategic Objectives and with them we conclude a great stage, fundamental within the strategic process.
If we had to choose a word to typify this moment, we could choose “coherence”, since the Strategic Objectives must first of all be a faithful translation of the Generic Strategy adopted, they are conditioned to the Mission-Vision-Values and the Balance of Forces of the company.
A Strategic Objective is that formulation of purpose that marks the position in which we want to be in the long term. It is, even more important, the commitment to something that we value decisive for the present and future of the organization. It involves a risk and a result. Together they are the victories that we need to achieve in order to conquer the desired position.
It is usual that with them we propose some radical changes of approach because, based on the Strategic Objectives, relevant decisions will be made (incomprehensible for those who do not know our strategy) We will normally commit significant resources and it will not be easy to return to the starting situation (Grant, nineteen ninety six).
Once defined, the Strategic Objectives constitute the lines of action of the company, they respond especially to the definition that we made of FCE and Driving Force of the company. If Intimacy with the Client, to cite an example, becomes for us a strategic factor through which any decision we can make passes, it is very sensible to assume that we will propose several long-range goals associated with this strategic factor-value.
Development of Objectives. Strategic map
Perhaps there is no better way to think and prioritize the Strategic Objectives of the company than the Strategic Map. This is the most important conceptual contribution of the Balanced Scorecard3 (Fernández, p. 2), a tool that we will have to use extensively in the future.
A Strategic Map helps to assess the importance of each Strategic Objective, as well as to understand the coherence and integration between them. You have the courage to present your goals grouped into fundamental perspectives. In this way, it makes the strategy more understandable and communicable, and reminds us of the importance of having Strategic Objectives in all key dimensions.
Commonly used perspectives, although more can be included if necessary, are:
- Financial Perspective: What should we do to meet the financial expectations of the company and stakeholders? Customer Perspective: What should we do to meet the needs of our customers? Internal Perspective: In what processes must we be excellent to meet those needs? Learning and Development Perspective: What aspects are critical to be able to maintain that excellence?
The Strategic Map, although it orders our Strategic Objectives in the aforementioned perspectives, it also defines the Strategic Lines in which they will move: Growth / Revitalization or Profitability / Optimization Strategies, recalling the typologies of ME Porter (1985) or RE Miles and CC Snow (1978), are the most helpful options but the idea is that the objectives must respond, first of all and in all their perspectives, to the strategy that has been chosen.
The following figure is quite illustrative. Let us appreciate how a Strategic Map integrates objectives within critical perspectives for most companies, distinguishes which strategic option they respond to and what causal or concatenation relationships exist between them, something important when making multiple decisions. These causal relationships are intuitive, based on knowledge of the organization and the sector. Figure 1: Strategic Map. Goals and their relationships
No less striking is the ability of these maps to, with a simple glance, offer us the strategic foundations of the organization. This tool admits to include details on the quality of the connections between objectives (mobile, permanent connections, etc.) only coding a type of arrow for each situation, and also which of these objectives are valued by us as in better or worse condition, it is enough define a color or other distinctive sign for each case.
No wonder RS Kaplan and DP Norton (2000) tell us: “Do you have problems with your Strategy? Take her to a Map ”(Kaplan and Norton, p. 167)
Some Strategic Objectives and their Perspectives
It is useful, even when we know the nature of the Strategic Objectives and how to work them through a map, to expose which ones are usually handled in each perspective. Everyone will remind us of the types of strategies that we defined earlier because their closeness and familiarity with them is enormous, as is to be expected.
Characteristic objectives from the Financial Perspective
- Growth Long-term sustainability Increase Profitability Maximize Return on Investments (ROI) Optimize Costs Ensure an appropriate Financial Structure Effective Asset Management.
Characteristic objectives from the Customer's Perspective
- Increase Participation in the Market and Acquisition of new clients Satisfaction and Loyalty of the strategic client Increase Profitability per client Optimize Delivery Times
Characteristic objectives from the perspective of internal processes
From this perspective we need to identify, in connection with the objectives of the previous perspectives, those internal processes relevant to the performance of the organization.
It can be the Production Control or the Logistics in a Plant, the Treasury Activity in a Corporation that grows and faces important commitments, the People Management of a service entity or Customer Service, etc., they will always be processes that support the main commercial and financial objectives of the company.
For each of these processes, we will establish strategic objectives mainly associated with increasing their effectiveness and operational excellence.
Characteristic objectives from the Learning and Development Perspective
This is a key perspective. The base, the roots, the trade, the organizational foundations are consolidated in this area. Aspects such as Technology, Organizational Culture, Strategic Alliances and Competencies of the company, are points of high degree of interest based on which we will probably have to pronounce several Strategic Objectives. These issues often remain secondary aspects with no strategic sense for the organization (see Implementation).
Objectives associated with Technology:
- Development of Information Technology and Information Systems Creation of Strategic Databases Implementation of Quality Systems and Systems Supervision
Objectives associated with Climate and Culture for Action:
- Increase Incentives and improve Retribution Promote Motivation, Training and Awareness Consolidate Delegation with meaning and efficiency (Empowerment) Create High Performance Teams.
Objectives associated with the creation of Alliances:
- Strengthen Strategic Alliances with Suppliers (Comakership) Create Strategic Alliances (commercial, technological, management)
Objectives associated with the Competences-Knowledge:
- Generate Value with the Nuclear Competencies of the company Multiply the Good Practices of the organization (competitive differential).
Tactical approach
Having defined the positions that we must conquer in the long term to ensure our existence, development and advantage, we now have the need to think about how we are going to achieve it over time. We enter the realm of Tactics, the moment to opt for concrete short-term actions and act.
A thought from the world of Chess can serve us all as an excellent guide at this stage: "Strategy is a matter of reflection, tactics is a matter of perception" (Euwe, 1901-1981)
The Tactical Approach is a matter of "perceiving" how, in the present conditions, we can build an advantage, even if it is small, that brings us closer to the fulfillment of our Strategic Objectives. It is to propose short and medium term objectives consistent with future goals, forces and key factors for the success of the company; it is an acute sense of opportunity, making the most of the conjunctures in which we find ourselves involved.
Management by Objectives
The Tactical Approach, it is inferred, finds its support in the correct establishment of short and medium term objectives.
"Objectives - PF Drucker would say - are necessary in any area where performance and results directly and vitally affect the survival and prosperity of the company" (Drucker, 1954. Cit. By Weihrich, p. 150) "Without objectives there is no success », GS Odiorne quickly completes (Odiorne2, p. 72).
About objectives, and Management by Objectives4 (DPO) a lot has been written. Here we are going to treat only a synthesis of relevant aspects to successfully tackle the task of establishing objectives with a near horizon of fulfillment.
Begin by recognizing the obvious: objective is goal, arrival point, neither desires nor job functions, it is an achievement to be achieved. It will never be too stressed when it is repeated that they must be:
- Concretes: What are we going to achieve? Measurable: What performance criteria will we use? How will we know if we succeed? Defined in time: When will we achieve it? In how many stages will we divide the path? Compatible: Do they contradict each other or do they express a healthy coordination of efforts? Hierarchical: Do I know the priorities?
Without these requirements, an objective does not give us what we want, rather it becomes a possibility open to justification and complacency. When they are concrete, objectively measurable, linked together and constantly monitored over time, something else happens: they yield results.
The objectives, bringing us closer to the concept, do not imply working by functions but by commitment. The emphasis on doing the job correctly (FD Taylor's "best way") becomes the emphasis on doing the right job, offering the contribution focused on the organization's objectives in order to be more effective.
The worker, as a result of this new way of assuming responsibility, should be encouraged and be able to say: "I understand what we want to achieve, I know we will have to fight but it is possible, and it is worth the effort." The corollary of this approach is intuited that it continues to be revolutionary and fails only when it is applied badly; By working for objectives, the control function changes, we evaluate results, we support in a fair measure and with authenticity.
“The individual who is driven by objectives - knowing what to achieve and how to do it - feels motivated and committed to the future drawn for his company; feels that his own objectives clearly contribute to the achievement of those of the community; He feels equally aligned with the culture (values, styles of action, etc.) of the organization; has progress information (feedback); he knows himself to be a participant in decisions in his environment he sees in Management by Objectives a means for his realization and professional and personal development ”(Enebral, 2006)
This technique, used by us as useful for the Tactical Approach, implies a true cultural change in the leader-collaborator relationships. Ultimately, it must be very clear, "it is the people, and not the objectives, who lead us to the goal" (J. Welch, former CEO of General Motors)
But along with its facet aimed at modeling an effective relationship between boss and subordinate (Odiorne1, p. 220), Management by Objectives is also defined, and it is what interests us now, for its determination to align efforts and energies of the company with the designed strategy. In this sense, it becomes a “manifestation of Strategic Thinking” (Reiff and Bassfold, 1996) although, unfortunately, “experience shows that this harmony or alignment does not always occur, which, however, is so clearly inexcusable” (Enebral, 2006).
Alignment with the strategy is achieved by taking the strategy itself as a starting point, and then starting a process or Vertical Dynamics that closely coordinates the objectives. In this way, from our operating principles, diagnosis, fundamental decision criteria, a set of long-term objectives are derived that acquire a strategic character. They are general formulations located, as a good practice, in the four aforementioned perspectives.
The Corporation or Company will establish from them the achievements to be achieved in the short and medium term; they are the steps we will have to take to get closer to the vision. These objectives include more specific purposes, which can be measured according to the result. They are usually translated into Key Result Areas (ARC. Drucker, 1954)
Each Process, Business Unit or Functional Area will make a careful reading of these Corporate Objectives to adapt its efforts. It is normal that these have an even higher level of precision, establishing the conditions, means of action and elementary actions that are required.
Does it mean that in the business unit or functional direction we only subordinate ourselves to the Corporate Objectives? Obviously we subordinate ourselves, but before we necessarily participate, we contribute, we enrich the corporate formulation with the contributions that we understand we can make from our particular work fronts.
Implementation
Apply the strategy, implement it, implement it; all these expressions can be used to express the intention to execute or test the strategy that we design. To this end, we have advanced to a fairly high point of concretion, from a qualitative Mission statement to framed and measurable Short-Term Objectives.
Despite this, as M. Godet (2000) recognizes, “a good course is not enough for strategy; You also need prepared and motivated luggage for the maneuver. For this reason, for the company, the external front and the internal front constitute one and the same strategic segment. The battle can only be won on both fronts at the same time; or else it gets lost in both ”(Godet, p. 62.)
This thinking highlights the importance of the management gap, and equates it with the strategic gap. Good implementation calls for that key resource: human motivation. We do nothing with market opportunities, returning to the idea of the Resource Centered Theory (see Strategic Approach) if we do not have the capacity to take advantage of them.
Implementation must necessarily mobilize the human resource, but this is a sui generis asset, which poses in itself a possible problem because, we know, “we are often reluctant to push to the limit of our capacities, to try or experiment new things. On the contrary, we resist, avoid, rationalize and shore up our self-deception that things are fine the way they are (…) we become self-protective, accusing and suspicious and prefer to withdraw with our false ideas intact than to climb "the cross of the moment »And let our comforting illusions die (…) We resist the loss of what is familiar, the uncertainty that surrounds anything new, the insecurity about who we are when the things with which we have identified no longer define us” (Goldsmith and Cloke1, p. 23-24)
We can, in fact, be frankly anti-strategic, and even spawn countercultures and defeatist cliques that subtly summon discouragement within the organization, nothing to do with the Strategic Attitude outlined at the beginning. Implementing the strategy implies exactly overcoming these levels of resistance, the greater the less we participate in its conception and we feel our current position within the company is threatened.
Let's go in search of a general cause for so much resistance, we will find three negative and retrograde features present in today's company: Hierarchy, Bureaucracy and Autocracy that, J. Goldsmith and K. Cloke (2001) warn, “put people to sleep and makes it difficult for organizational behavior to be intelligent, strategic, integrated, and collaborative. Under these conditions it is difficult to take advantage of hidden opportunities, react quickly to changes in the environment, extirpate systemic conflicts, accept new paradigms or solve complex problems ”(Goldsmith and Cloke2, p. 167)
Implementing the strategy begins with an authentic participation scheme that transforms the culture, structures and work systems of the company. We must understand the implementation of the strategy as a continuous process of organizational awakening.
The team or Committee committed to carrying out the strategic vision (see section 2.2) will have to work consistently, much more from now on, to obtain significant transformations in everyone's thinking, attitude and behavior. A strategy without this process of revolution on the home front is a dead letter. The action of the strategist is manifested now more than ever.
The change that is required when we are involved in emerging and establishing ourselves in the market requires us to move from “… criticizing people to supporting their development, from solving problems to learning from them, from giving answers to asking questions, and from enforcing the rules to encourage values… from passivity to participation, from individual responsibility to team responsibility, from managerial decision-making to consensus, from competition to collaboration, and from direction to self-direction ”(Goldsmith and Cloke2, p.167).
There is no doubt about the energizing effect that the strategy receives when we infuse its implementation with this cultural shift in the relationships and ways of working of the company. Implementing is not just not so much about monitoring achievement of goals, this task taken in isolation ends up being alienating, because we forget an essential truth: the process of walking towards the goal must be meaningful and enjoyable. Implementing the strategy is then to strengthen in the organization a shared strategic sense, a habit of giving the best as the only possibility of success.
Going from good intentions to obtaining results is the baptism of all philosophy. To this end, I propose to formulate, in addition to the objectives oriented to the external front, concrete objectives that can measure the quality of our implementation. In this sense, it is valid to synthesize the thinking of J. Goldsmith and K. Cloke (2001) and summarize the following set of objectives for an effective implementation of the strategy (see figure 2) Figure 2: Keys to a solid change process and implementation
The eight proposed objectives will have the value of functioning as an incentive and a source of continuous learning. They can perfectly become feedback indicators within the Learning and Development Perspective of our Balanced Scorecard, complementing the analysis of the rest of the traditional indicators. These goals are themselves a profound challenge posed only to "good players", genuine strategists in action.
Bibliography
- Amit, R. and P. Schoemaker: "Strategic Assets and Organizational Rent" in Strategic Management Journal, Vol. 14, 1993. pp. 33-46.Beal, RM: “Competing effectively: environmental scanning, competitive strategy, and organizational performance in small manufacturing firms” in Journal of Small Business Management, Vol. 38, 2000. pp. 27-47 Buzzell, RD, BT Gale and RM Sultan: "Market share: a key to profitability" in Harvard Business Review, vol. 53, No. 1, 1975. pp. 97-106.Cabello, C. and others: "Miles and Snow's strategic typology and competitive factors: an empirical analysis" in CEDE Magazine, No. 7, Scientific Association of Economics and Business Management. Available in: Calori, R., and JM Ardisson: "Differentiation Strategies in StalemateIndustries" in Strategic Management Journal, No. 9, 1988. pp. 255-269 Chan Kim, W. and R. Mauborgne:Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. Harvard Business School Press. Boston, 2005Dierickx, I. and K. Cool: “Asset Stock, Accumulation and Sustainability of Competitive Advantage” in Management Science, Vol. 35, 1989. pp. 1504-1511.Drucker, PF: Management for the Future. The 1990s and beyond. NORMA Editorial Group. Colombia, 1993. Enebral, J.: Fifty Years of Management by Objectives. October, 2006. Available at: http://www.gestiopolis.com/teoria-direccion-objetivos/Fernández, A.: “El Balanced Scorecard. Helping to Implant the Strategy ”in Alumni Magazine, IESE, March 2001. Available at: www.ee-iese.com/81/afondo4.html Galbraith, C. and D. Schendel:« An empirical analysis of strategy types »in Strategic Management Journal, vol. 4, 1983. pp. 153-173.García, M. and R.Sabater: "Relations between Strategy and the Life Cycle of the Company" in Strategy, Knowledge and Innovation Magazine, No. 20, December 2003-January 2004. Available at: Godet, M.: The Strategic Prospective Toolbox. GERPA, fourth updated edition. Paris, 2000. Goldsmith, J. and K. Cloke1: The Art of Waking People. Cultivating Authenticity and Awareness at Work. Published by the Coordinating Center for Management Studies (CCED) Ministry of Higher Education. Havana, 2002. Goldsmith, J. and K. Cloke2: The End of Management… and the Emergence of Organizational Democracy. Published by the Coordinating Center for Management Studies (CCED) Ministry of Higher Education. Havana, 2001. Grant, RM: Strategic Direction. Concepts, Techniques and Applications, Civitas, Madrid, 1996. Hax, AC and NS Majluf:Strategies for competitive leadership. Granica. Buenos Aires, 1997. Herbert, T and H. Deresky: "Generic strategies: an empirical investigation of typology validity and strategy content" in Strategic Management Journal, vol. 8, 1987. pp. 135-147.Hofer, CW and D. Schendel: Strategy Formulation: Analytical Concepts. Ed. West Publishing Co., St. Paul, 1978. Kamoche, K.: "Strategic Human Resource Management within a Resource-Capability View of the Firm" in Journal of Management Studies, vol. 33, No. 12, March, 1996. pp. 213-233.Kaplan, RS and DP Norton: “Having trouble with your Strategy? Then Map It ”in Harvard Business Review, September-October, 2000. pp 167-176.Kotler, P.: Marketing Management. Analysis, Planning, Management and Control. 7th Edition, Prentice Hall, Madrid, 1992. Lorange, P.:"A Strategic Human Resource Perspective Applied to Multinational Cooperative Ventures" in International Studies of Management and Organization, Vol. 26, No.11, 1996. pp. 87-103.Mintzberg, H.: "Generic Strategies: Toward a comprehensive framework" in Advances in Strategic Management, vol. 5, 1988. pp. 1-67.Mintzberg, H. and JA Waters: "Of Strategies deliberate and emergent" in Strategic Management Journal, 1985. pp. 257-272.Mueller, F.: "Human Resources as Strategic Assets: An Evolutionary Resource-based Theory" in Journal of Management Studies, vol. 33, No. 16, November, 1996. pp. 757-785.Odiorne, GS1: Management by Objectives: new system for management. Limusa, Mexico, 1994. Odiorne, GS2: The Human Side of Management. Díaz de Santos, Madrid, 1990. Ohmae, K.: The Mind of the Strategist. McGraw-Hill / Interamericana de España SA1990. Porter, ME: Competitive Advantage. The Free Press, New York, 1985 Reiff, WE and G. Bassford: “What Really is PDO ?: The Managerial Functions” in From Strategy to Results. Management Integration. Labor SA, Barcelona, 1996. pp. 99-111 Rumelt, RP: Strategy, Structure and Economic Performance. Harvard University Press, Boston, 1974. Teece, DJ, G. Pisano and A. Shuen: “Dynamic Capabilities and Strategic Management” in Strategic Management Journal, No. 18, 1997. pp. 509-533. Weihrich, H.: Administrative Excellence. Productivity through Management by Objectives. University of San Francisco, 1995.Barcelona, 1996. pp. 99-111 Rumelt, RP: Strategy, Structure and Economic Performance. Harvard University Press, Boston, 1974. Teece, DJ, G. Pisano and A. Shuen: “Dynamic Capabilities and Strategic Management” in Strategic Management Journal, No. 18, 1997. pp. 509-533. Weihrich, H.: Administrative Excellence. Productivity through Management by Objectives. University of San Francisco, 1995.Barcelona, 1996. pp. 99-111 Rumelt, RP: Strategy, Structure and Economic Performance. Harvard University Press, Boston, 1974. Teece, DJ, G. Pisano and A. Shuen: “Dynamic Capabilities and Strategic Management” in Strategic Management Journal, No. 18, 1997. pp. 509-533. Weihrich, H.: Administrative Excellence. Productivity through Management by Objectives. University of San Francisco, 1995.
