Setting the discussion
In order to encourage our clients and partners to reflect on their practices with regards to their strategy, we have designed an exploratory framework that relies on the 20/80 Pareto principle to discuss the strategy anatomy.
Let’s start with a short review from recent research:
The whole strategic planning process includes environmental analysis, strategy formulation, implementation and control “(Tripes, Komarkova, Pirozek and Dvorak, 2014, p 332).
There are five building blocks to the strategic management process: vision and mission statements, external and internal analysis, strategy formulation, implementation and performance evaluation. (Rajasekar, 2013, p. 132).
We observe that although vocabulary differs, a consistency of thoughts emerges around two core activities: formulation and execution.
The Merriam-Webster dictionary reminds us that to formulate is to create, invent, or produce (something) by careful thought and effort. This definition implies that there is an activity of design and an activity of articulation. To execute, the same Merriam-Webster tells us to do or perform (something that you have planned to do or been told to do). This definition implies there is an activity of doing or implementing and reviewing how it is done according to plan, i.e. controlling.
We propose that formulating a strategy is the result of two core activities: designing and articulating, and that executing a strategy consists of implementing and controlling.
When considering the 20/80 Pareto principle to formulating and executing a strategy, empirical common sense observation lead us to think that 20 % of efforts should focus on formulating a strategy and 80 % of efforts should be on executing a strategy. This is highlighted by Bossidy « execution is the major job of a business leader » and Collins « There is the necessity to spend most of the time on creating alignment ». When looking more deeply into each strategy dimension using the same 20/80 Pareto principle, we can propose that for formulating a strategy, designing occurs for 80 % and articulating for 20 % while, as regards execution, we can state that implementing occurs for 80 % and controlling for 20%. This simple high level observation enables to explore and illustrate a « big picture » distribution of the core effort with regard to strategy.
Frank Rouault Dba,
Découvrez Construire les Succès, la méthodologie qui détaille la formalisation de la stratégie sous cet angle.
What is your point of view on this ?