Transforming Corner Office Strategy into

Frontline Action

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 Strategic Principle
 Introduction
 What is Strategic Principle
 A memorable and actionable phrase that distils a company’s corporate strategy
into its unique essence and communicates it throughout the organization.

 Why it is needed
 Fast changing customer preference.
 Employees needs to be motivated to innovate and take risk.
 It is necessary where need is to have decentralized decision making and
coherent strategic action.
 Maintain strategic focus while maintaining flexibility among the employees.

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 Strategic Principle

Why we exists How to What we want

Conduct to be in the
Business future
(Guidelines

Strategic Principle
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 Strategic Principle
 Distillation and Communication
 Why Important
 80-100 Rule: A strategy can be 80% right, but must be implemented 100%.
 It become easier for managers to take action.

 Difference from Mission Statement

 Mission is about culture and aspiration
 Strategic Principle is more action oriented and inspirational.

 Example: GE (Mission Statement): “Always with unyielding integrity” – to be

“Passionately focussed on driving customer success” and to “create an
environment of ‘stretch’, ‘excitement’, ‘informality’ and ‘trust’ among other
things.
 GE Principle: “Be number one or number two in every industry in which we
compete or get out”.

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 Strategic Principle
 Three Defining Attributes
 It Forces Trade-Offs between competing resource demand

 It tests the strategic soundness of particular action

 It defines boundaries within which employees must operate.

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 Strategic Principle
 Now More Than Ever
 Decentralization: Example diversified companies.

 Rapid Growth: Start Up Firms

 Technological Change: Example Dell

 Organizational Turmoil (CEO may change, but not strategic

principle)

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 Strategic Principle
 Strategic Principles in Action
 Forcing Trade-Off at Southwest Airlines

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 Strategic Principle
 Creating a Strategic Principles
 Finding out the essence of the strategy that can be translated into
simple, memorable phase.

 It is similar to find out your DNA.

 It should capture the essence of your company’s point of

differentiation.

 It should be consistent, simplicity, and repetitive.

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 Strategic Principle
 When Re-Thinking is Required
 Big shift in economics and opportunity in market, but there is only
need to re-define or expand the strategic principle.

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 Strategic Principle
It’s All in a Phrase
Company Strategic
Principle
American Online Consumer, Connectivity First – Anything,
Anywhere

Dell Be Direct

eBay Focus on trading communities

General Electric Be number one or two in every industry in

which we compete. Or get out

Southwest Airlines Meet customer’s short-haul travel needs

at fares competitive with the cost of
automotive travel
Wal-Mart Low prices, every day
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 Strategic Principle
Traditional Computer Manufacturer

Research and Manufacturing

Development (FMS etc.)

Wholesaler/
Retailer

Customer

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 Strategic Principle
DELL

Research and Manufacturing

Development (FMS etc.)

Wholesaler/
Retailer

Customer

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Strategic Principle
DELL

Manufacturing
(FMS etc.)

Customer

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 From Strategy to Implementation
 Support Activities

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 From Strategy to Implementation
 Support Activities

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