What is strategy, exactly? And are you aware that you need different types of strategy at different levels within your organization? In this article, we're looking at some common definitions of strategy, focusing on three strategic levels - corporate strategy, business unit strategy, and team strategy.
Strategy has been studied for years by business leaders and by business theorists. There is no definitive answer about what strategy really is. One reason for this is that people think about strategy in different ways. Some people believe that you must analyze the present carefully, anticipate changes in your market or industry, and, from this, plan how you'll succeed in the future. Others think that the future is just too difficult to predict, and they prefer to evolve their strategies organically. While there will always be some evolved element of strategy, at MakesSense we believe that planning for success in the marketplace is important; and that, to take full advantage of the opportunities open to them, organizations need to anticipate and prepare for the future at all levels.
Many successful and productive organizations have a corporate strategy to guide the big picture. Each business unit within the organization then has a business unit strategy, which its leaders use to determine how they will compete in their individual markets. In turn, each team should have its own strategy to ensure that its day-to-day activities help move the organization in the right direction. And what are a corporate, business unit, and team strategy?
In business, corporate strategy refers to the overall strategy of an organization. It determines how the corporation supports and enhances the value of the business units within it, and it answers the question, "How do we structure the overall business, so that all of its parts create more value together than they would individually?" Corporations can do this by building strong internal competences, by sharing technologies and resources between units, by raising capital cost-effectively, by developing and nurturing a strong corporate brand, and so on.
Business unit strategy is more concerned with thinking about how the business units within the corporation should fit together and understanding how resources should be deployed to create the greatest possible value. Strategy at the business unit level is concerned with competing successfully in individual markets, and it addresses the question, "How do we win in this market?" However, this strategy should be linked to the corporate level strategy. Your business unit strategy will likely be the most visible level of strategy within each business area. People working within each unit should be able to draw direct links between this strategy and the work that they're doing. When people understand how they can help their business unit "win," you have the basis for a highly productive and motivated workforce.
Then there’s the team strategy. To execute your corporate and business unit strategies successfully, you need teams throughout your organization to work together. Each of these teams has a different contribution to make, meaning that each team needs to have its own team-level strategy, however simple. This team strategy must lead directly to the achievement of business unit and corporate strategies, meaning that all levels of strategy support and enhance each other to ensure that the organization is successful.