The Strategy Formulation Process

Chapter 6 Overview

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Importance of Strategy Formulation Process Causes strategic Thinking Mechanism to ease the communication of ideas Co-ordinate the efforts of those involved in the process Inject structure into the thinking without rigidity
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Characteristics of good strategy

 

Judged by the results achieved NOT by the process Process must match:
  

business needs Culture Specific issues of the context Original Creative Easy to implement
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Process must be:

  

Nature of the formulation process

 Can

be both:

 formal

and informal  simple and complex  Analytical and qualitative  Involve many people or just a few

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Strategic Thinking Should

  

 

Consider the enterprise as a whole Be about the long term and not the immediate Address the organisations relationship with the environment and its capabilities and resources Be based on fact and reality with some imagination Have a good understanding of the present Be able to think imaginatively about the future
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The 3 Interlocking aspects of the Strategy Formulation Process

Strategic Intent

Strategic Assessment

Strategic Choice

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The 3 Aspects of Strategy Formulation Strategic Intent

Driver of Strategy Formulation Process Provides direction for strategy Answers question Where do we want to go?

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The 3 Aspects of Strategy Formulation Strategic Assessment



Provides relevant knowledge of strategic context Anchors future strategies in reality Answers question Where are we now?

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The 3 Aspects of Strategy Formulation Strategic Choice

If no choice - no strategy needed The link to action Answers question How to get from where we are to where we want to be?

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Activities and Results of Process

Activities in Process Intending Assessing Choosing

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Results from Process Intent Assessment Choice

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Effective strategy formulation processes

          

Customer awareness Supplier relationships Stakeholder influences Understanding of competence Awareness of technological change and innovation Mix of people involved in process Encouragement and understanding of top management Communication of results and reaction to feedback Sound logic and balance to the process Process design but not over-design Considered role of external support
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Results from the strategy formulation process Goals that are simple, consistent and long term.  Profound understanding of the competitive environment  Objective appraisal of resources  Effective implementation

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Source: Robert Grant 1995 Contemporary Strategy Analysis
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