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Why is it important to improve your business strategy?



Strategy has become, for many organizations, a buzzword, a cliché that everyone has heard about and whose importance is broadly acknowledged, but not everyone can actually name what are the benefits of a good strategy and why the organization should pay attention to them.

In order to understand the benefits of a good strategy, we must first understand what exactly it refers to. According to Henry Mintzberg, strategy can be defined by using the 5 P’s:

  • Perspective – Vision, mission, values and goals;
  • Plan/ Ploy – Objectives, KPIs and Initiatives;
  • Pattern – A set of actions;
  • Position – Results.

After understanding what the strategy is, we now proceed to a deeper analysis of the benefits of improving the business strategy:

1. Develop a clear strategy for your organization

By analyzing the external and internal environment, a sound strategy can be formulated, which will furtherly be cascaded across all level of the organization, so that each employee can understand it and benefit from it.

2. Achieve your organization’ goals

According to Michael Mankins and Richard Steele, less than 15% of the companies compare the actual business results with the performance forecasted for each unit in its prior years’ strategic plans.

In this case, an analysis is required, in order to avoid wasting resources on a strategy which is underperforming, and changing obsolete objectives and initiatives becomes a must.

3. Improving the business strategy will result in efficient communication

Sometimes, managers are not informed regarding the best means to execute the strategy. A good practice is to take into account the communication possibilities across all sectors of the organization. The communication between departments can be improved by having all processes mapped.

4. Strategy means setting the right objectives for each employee

It is essential for managers to be able to set effective and efficient goals. Problems in this area can be avoided by involving the managers in a community of practice and by having strategy meetings and training programs.

5. Strategy offers a clear direction

According to Robert Kaplan and David Norton, only 7% of employees today fully understand their company’s business strategy and what is expected from them in order to help achieve the company goals. This means employees are working in silos and the majority of them go different directions.

Knowing the vision, mission, values and goals of the organization is important and should be expected of every employee. Moreover, cascading the organizational objectives to departmental and individual level is a must in order to achieve alignment across all sectors of the organization, for the employees to have a clear direction and to know where they are heading.

6. A good strategy takes into account how to measure performance

Measuring the performance of an organization is vital in order to make relevant decisions, based on facts. A solution to this problem is implementing a Performance Management System within the organization.

7. Strategy will offer alignment between initiatives and objectives

Initiatives have the role to ensure that the organization’s objective are met. Allocating the resources of the organization in the opposite direction of the strategic plan, will lead to different results compared to the ones which are expected.

In conclusion, there are many benefits in which a sound strategy provides, but the main point is that a strategy should to take into account all the factors relevant for an organization to succeed: strategy should offer a clear direction by having the right goals and objectives, cascaded across all level of the organization the right initiatives should be implemented in order to achieve them.

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Comments (7)

  • Reem Alqnayah


    strategy can be defined by using the 5 P’s:
    Perspective – Vision, mission, values and goals;
    Plan/ Ploy – Objectives, KPIs and Initiatives;
    Pattern – A set of actions;
    Position – Results.


  • Jamel Bousbih


    I would like to refer to the concept of emergent strategy developped by Minzberg. Strategy is rarely a determined exercise. Agility is a main quality of any strategic planning work.


  • Jamel Bousbih


    I think corporations need to set a metric on how to measure the effectiveness of their strategy. In my opinion it should be assessed vs the degree of achievement of the corporate goals.


  • Jamel Bousbih


    The strategy shift requires as well a dense effort of change management. Corporations should set the scene to get get prepared for any new move. Tech companies showed a great example here of fast redeployment.


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