If the words ‘organisational strategy’ are unfamiliar or confusing to you, you are not alone. Many people struggle to understand precisely what an organisational strategy is. Not only what it means, but also how it might benefit their business and how to create and implement one. In this article, we will provide an organisational strategy definition, outline the benefits of using one and offer some best practice tips and examples.
Organisational Strategy Definition
An organisational strategy is a long-term, detailed plan that companies use to ensure their resources and processes meet their business objectives. You may hear it referred to as strategic management, corporate strategy or company strategy.
An organisational strategy ensures a company has a plan to achieve its goals. It can help to think of an organisational strategy as a roadmap that guides the entire company in decision-making, prioritisation, and communication.
An organisational strategy should be:
- Flexible: a strategy may need to be adapted to changing economic circumstances, evolving industry standards, or technological shifts.
- Measurable: it’s essential that the business can track its progress through quantifiable milestones.
- Regularly reviewed: companies should revisit their organisational strategy on an agreed-upon timeframe to align it with current business goals.
- Realistic but challenging: an organisational strategy should be based on what is achievable, but with stretch goals to motivate and inspire the workforce.
- Intentional: the strategy should be focused and specific, allowing employees to easily understand what they need to do and how to do it.
Types of Organisational Strategy
There are different types of organisational strategy, but the key ones are:
Corporate level: covers the whole organisation’s scope and direction.
Business level: outlines how the organisation will work commercially, including how it will compete externally.
Functional or operational level: focuses on the day-to-day work of the business.
Developing an Organisational Strategy
Developing an organisational strategy can be an intensive process that requires considerable effort, attention, and planning. When you begin thinking about creating an organizational strategy, it can feel overwhelming. The following four areas offer a solid starting point for your work:
- Ensure you understand your current situation, including the broader industry landscape and the company’s values, vision, and mission.
- Define your goals: be clear on where you want to be in a specific number of years, including any changes you wish to make to the corporate culture or brand.
- Investigate the resources needed to achieve the company’s goals so you can determine what is required for your roadmap to be practical.
- Determine who is accountable for different areas of the organisational strategy to ensure that the workforce is clear on expectations and requirements.
- Agree on timeframes for the work involved in creating, monitoring and reviewing the organisational strategy.
Organisational Strategy Benefits
An organizational strategy primarily helps you achieve your business goals by making the most of your available resources. As you put the strategy into action, you’ll quickly notice additional benefits.
Better Priorisation
An organizational strategy provides a clear framework that guides the business on what to prioritize. It helps prevent teams from wasting energy on the wrong areas.
Simplified Decision-Making
Similarly, having a roadmap for what needs to be done can provide clarity and focus regarding the decision-making process.
Improves Communication
When a company has a strategic framework, communication becomes easier because the workforce understands the reasons behind decisions. This clarity helps avoid misunderstandings that could impact productivity.
Supports A Flexible Culture
When leaders implement an organizational strategy, they make it easier for the company to adapt to challenges. A clear strategy helps the workforce understand their goals, which encourages them to think creatively and find new solutions.
Motivates And Unifies The Workforce
Having a strategic framework can be a significant tool in encouraging teamwork because everyone understands what they need to achieve together. It can also be motivating to have the challenge of goals and a plan to achieve them, which you know and are invested in.
HR’s Role In Organisational Strategy
With its crucial role in overseeing and understanding the workforce, HR plays an essential role in creating, delivering and monitoring the ‘people’ aspect’ of an organisational strategy in the following ways:
- Workforce planning: HR teams help forecast the business’s future people needs, based on the organisation’s goals.
- Performance: HR teams are involved in running performance management within companies, so they know the strengths and weaknesses of the workforce, which is essential information to feed into an organisational strategy.
- Recruitment and retention: HR teams are involved in ensuring the company has the right people in the correct roles to meet the goals of the organisational strategy.
- Leadership and succession planning: HR teams support businesses with high-performing senior leaders and contingency plans to fill senior and key roles as necessary to meet the business objectives.
- Employee engagement: HR teams play a key role in improving employee engagement and supporting employee wellbeing, both of which are essential to having an organisational strategy that succeeds.
- Change management: if the organisational strategy involves significant changes to how people work, HR will develop a programme to support the required changes.
Best Practices in Organisational Strategy
The following tips will help you create, execute and monitor an organisational strategy for your business:
Have A Vision
Before you start, be clear on your vision (where the organisation wants to go) and mission (its purpose). Knowing where the organisation wants to go and its purpose provides a guiding light for strategic decisions.
Use Data
Where possible, use data to drive your plans. Ideally, you will have information on your financial situation, competitive landscape, customer base and future trends. Tools such as PESTLE and SWOT can help you identify the factors impacting your business.
Breakdown The Planning
Break the strategy into manageable phases, assign achievable timelines to each, and give the right people responsibility for specific areas.
Engage Your Team
Engage key stakeholders early to build their investment in the process and help them understand its importance.
Set The Right Goals
Set SMART goals (specific, measurable, achievable, realistic, and time-bound), and ensure all departments align so everyone clearly understands what’s expected and works toward the same objectives. This work includes carefully considering the resources required to meet the goals, including people, technology and operational systems.
Organise How To Monitor And Review
Implement a review system so that the organisational strategy you create is monitored regularly, with time allocated for changes to be discussed and implemented and achievements celebrated.
Focus On Communication
Keep communicating to ensure that everyone in the workforce understands the strategy and how their work contributes to it. Using different formats, such as meetings and forums, as well as digital tools such as dashboards, supports an inclusive approach.
Create A Strategically-Focused Culture
Create a culture where strategic thinking is embedded throughout the organization. Support this by offering targeted training sessions and helping senior leaders incorporate strategic goals into team meetings and decision-making processes.
Organisational Strategy Examples
If you are thinking about creating an organisational strategy or adapting an existing one, it can be helpful to learn from examples. One common approach is for companies to develop an organisational strategy with a specific purpose, such as the following examples:
- Innovation: an organizational strategy focused on generating growth through innovation might involve investing in R&D, protecting the brand and copyright, and updating processes to be more user-focused.
- Growth: if a company is focused purely on growth, its organisational strategy might include phases for entering new markets and ways to diversify its current portfolio.
- Digital transformation: an organisational strategy aimed at a technological transition that might include sections for new investment, changes in the company culture, and testing of new products and markets.
Another common approach is to create an operational strategy for each department that feeds into an overall corporate strategy. For example, a company might create a strategy to increase customer retention and translate it into an operational plan for the customer service team. The plan could focus on reducing response times by 20% through the introduction of a new digital call-handling system. It would also include training staff on product knowledge and customer interaction, as well as setting up a feedback system to quickly identify and address issues.
How Factorial Can Help With Your Organisational Strategy
Factorial is a business management software that can help your company develop, monitor and review an organisational strategy. Its platform ensures you have up-to-date and immediate data on the workforce. By providing information on employee performance, turnover trends, and engagement, Factorial can support businesses in understanding the current state of their workforce and forecasting future trends. This knowledge is essential for creating an organisational strategy.
Factorial’s system also reduces the time spent on administrative and repetitive tasks, freeing up your teams to focus on the strategic impact of their role, such as using data insights to inform an organisational strategy.
