Lawrence Abeln

What do successful companies like Amazon, Starbucks, Microsoft, McDonalds, or Google have in common? They are exceptional at developing, executing, and adapting their strategy to find opportunities for growth among competitors and to expand their global footprint. 

 My definition of strategy is a non-static and continuous plan that evaluates challenges, threats, and opportunities. It is adapted at times to ensure the organization achieves key outcomes, integrates mission, vision, and values, and helps align people and processes to goals.

 For large-scale enterprises to small- or medium-size enterprises, strategy is an important tool that provides a framework to achieve goals, measure success, create value, and serve as a steering wheel toward a common path within the organizational culture.

 Strategy is critical for success because it gives the organization and key stakeholders commonality of purpose: a common ground to stand on, goals to work toward, and standards to uphold. Strategy also sets an organization apart from competition. 

 There are thousands of textbooks and articles written on strategy every year, popular cases based on best practices, including scientific studies to help guide us to make better strategic decisions. However, despite the literature, many companies have not mastered it as an art. Guiding any successful strategy requires a visionary leader who provides direction and motivates teams to translate strategic priorities into effective implementation.


Energizing people toward common goals

 In 25 years of leadership experience, I have learned that many of the key obstacles in strategic management are core issues related to people. Communication, companywide buy-in, training and reskilling, and alignment can be particularly challenging.

 People are often the biggest obstacle in effective strategic planning and implementation, mainly because getting people to work together around a shared vision, values, and common purpose is challenging. This is something my former MIT colleague Loredana Padurean wrote about in her book The Job is Easy, The People Are Not.” Today, the complexity of strategic management has increased with the diversity of the workforce and people's strong sense of individualism. Individual values may at times conflict with corporate values. 

 The 2024 workforce comprises people from different backgrounds, cultures, religions, geographies, genders, experiences, and generations, often with a strong association and pride to distinct identities. Four or five generations may now work in the same company for the first time in our history. Additionally, with technology and globalization building electronic bridges in organizations, people can now work together worldwide in the same organization and be together in the same meetings more easily across regions and continents. This has made it essential for many to navigate different languages, cultures, and beliefs, and recognize the sensitivities that come with their communication. 

 Strategy requires collective decision making and alignment. Developing and implementing an effective strategy can be challenging with a diverse workforce that values individualism. These factors also make strategy more important than ever.


Five key lessons about organizational strategy

 Business school students have studied strategy as a discipline for decades and it is often a core part of any MBA curriculum. However, learning how to embed strategy into the practice of management as a way of improving organizational effectiveness is still a challenge. Here are five important lessons about organizational strategy: 

 1. Strategy often fails in the implementation phase, not the planning or development phase. While planning and development are important, implementation and follow-through are essential to success. 

 2. Organizations need leaders who can effectively communicate strategy. Leaders must learn how to communicate companywide strategy to multiple audiences, which is more challenging with today's highly diverse workforce. Leaders must possess good communication skills, a global mindset, and cross-cultural and cross-disciplinary skills. The good news is that these skills can all be learned. 

 3. Organizations need the right people. They need inspirational leaders and people and teams with the right tools and skills for strategic planning and implementation. Often, companies are too focused on day-to-day operations, just trying to keep our heads above the water. A clearly articulated strategy will help employees across levels and skills see the whole picture—and their role within it—and enable the organization to further develop capabilities to compete in the future.

 4. Strategy serves as a road map, but like everything else, it sometimes goes differently than planned. The rules change along the route, and companies must adapt. A strategy sometimes emerges along the way.

 5. Strategy is neither just a business plan nor a budget. In some organizations, the strategy revolves around the budget, the extent of resources available for the fiscal year. Although the business plan and budget are very important factors within strategy, they are separate key steps. 


Strategy must evolve 

 Strategy must evolve as things change in the world and within an organization. For example, Henry Ford once famously said, “Any customer can have a car painted any color that he wants, so long as it is black.” Until he realized he was wrong. Ford originally produced one model in one color, black. 

 As the company grew and consumer demands became more sophisticated, Ford started producing a variety of car models in a variety of colors. Ford changed its strategy to focus not only on production but also on customer needs and preferences. While the color of one's car may be inconsequential, if Ford had not adapted its strategy, it likely would not have succeeded. That was not the first time it evolved its strategy over the last 120 years. Today, it is one of the leaders of the S&P500. In fact, it has been on the S&P500 for over 75 years, while the average tenure is 25 years.


COVID forced many to evolve

 More recently, the COVID era forced many companies to evolve their strategies. Many had to pivot and move their products or services online and learn to effectively work together remotely. Universities had to provide online classes, hospitals online healthcare, and retailers online platforms for consumers. We saw many examples of companies that succeeded in this.

• Target, Walmart, and many others started online ordering and curbside pickup.

• Even many traditional universities, including Ivy League schools, Oxford, and Cambridge, adapted their curriculum for online delivery. 

• Recreation and travel companies and even gyms delivered online experiences like classes and tours.

 Many of these changes were long-lasting, as people realized the value of these online services and the easy access they provided. Many organizations that did not adapt their strategy either failed or are still recovering. 


Pitfalls to avoid in strategic management 

 Many organizations create exceptionally long PDF strategy documents that have all the fine trimmings of a Christmas tree but fail to execute their strategic plans effectively. The reasons for failed strategies are varied, but most hinge on implementation being too resource-intensive.


Other challenges to strategic management include:

 • Building strategy around a budget: While a budget can impact strategy—something seen often in the public sector—strategy should not be built around a budget.

 • Weak strategy: A weak strategy often assigns unclear responsibilities, gets caught up in buzzwords, overwhelms departments with too much too fast, or has no timetable. On the other hand, a strong strategy clearly lays out responsibilities for everyone, is driven by the mission, vision, and values, has a strategic implementation rollout, and has clear timelines. 

 • Ineffective training: For strategic initiatives to be successful, an organization must adequately train its employees. Finding the right training option helps strengthen skills, teach new skills, and ensure employees execute tasks to support the strategy in their daily workflows.

 • Lack of follow-through: Follow-through is critical to success. Having a clear plan and timeline, a strong strategy, and training will help with follow-through, but leaders should perform regular check-ins and evaluations to ensure they are still on the right path. This will help identify any areas of weakness and inform changes. 


Themes of modern strategy

 Today, many organizations, universities, and those in the public sector are shifting aspects of their strategy to integrate these three components: globalization, digitalization, and sustainability; artificial intelligence (AI); and diversity, equity, and inclusion (DEI).


Globalization, digitalization, sustainability

 Numerous large U.S. S&P 500 and UK FTSE 100 companies prioritize the United Nations' 17 Sustainable Development Goals (SDGs). These goals serve as "a shared blueprint for peace and prosperity for people and the planet, now and into the future." Many companies have made commitments to achieve net-zero emissions as part of their strategy. They are also taking steps and initiatives to address social justice issues and income inequality, provide quality education and healthcare, prevent and reverse planetary damage, and reduce inequalities. 


Artificial Intelligence

 AI is another topic that many companies are prioritizing in their strategy, as the global AI market is expected to reach over $2 trillion by 2030. AI can help automate processes and tasks, provide better customer experience, improve marketing, create content, and more. Many studies have shown that organizations are implementing AI at increasing rates, but there are still those that are struggling to do so. Moreover, companies are trying to balance the benefits of AI with perceived risks—one of those being bias and inclusion.


Diversity, equity, and inclusion

 DEI has become an essential topic for businesses, employees, and consumers. We see this theme increasingly embedded in the strategy of large organizations. Many not only recognize this shift to build awareness of people's individualism, but a respect within their organizations and tolerance of differences, and a view that diversity can be a strength.

 Because of this awareness, there is more emphasis on being understanding and inclusive of people who are different from us. DEI is becoming an integral part of many companies’ strategies, not only for the progress and success of an organization but also for the well-being of its employees and consumers.

 Diversity brigs fresh perspectives, equity fosters a fair and just environment that can create opportunities for all, and inclusion helps employees feel valued, heard, and respected. DEI has shifted the golden rule to "treat others how they want to be treated,”, from the traditional notion that we should treat others “the way we want to be treated.”


Successful strategy does not happen by chance; it requires strong leadership

 Strategy requires leaders who are guided by values, driven by purpose, and direct with a vision. We strive to develop these kinds of leaders at Thunderbird School of Global Management in our programs, curriculum, and activities both within and outside the classroom.


Lawrence Abeln

Deputy Dean of Thunderbird Executive Education and Clinical Professor of Global Management

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