Every business owner wants their business to succeed. If your business doesn’t have any clear directions and plans, it’s more likely to go the wrong way, which degrades your and your employees’ morale.
To achieve long-term goals, you need an organizational strategy. It is the key to open new doors for your business and eventually leads it to success.
So, what is organizational strategy? And how can you create one for your business?
What is Organizational Strategy?
Organizational strategy is the set of plans that your company needs to develop to achieve a specific long-term goal.
It is usually written in the form of a strategic plan. This plan includes different important factors, such as workforce, money, finance, marketing implementation, etc. will be taken into consideration.
This strategic plan can be used for almost every type of business, from big companies to small coffee shops.
With a proper plan, you know exactly what your company needs to achieve, implement, change, and improve. At the end of the day, it’s all about long-term achievement!
Levels of Organizational Strategy
There are three different types of organizational strategy, depending on the size and development of your business.
Here’s a brief explanation of each type and how it can be implemented into different businesses.
Corporate strategy deals with the firm overall. In other words, it is at the top of the pyramid when it comes to planning. It involves various steps of evaluation depending on what type of business and industry your company is in.
Corporate-level strategy will help you, as the company’s leader, to identify the goals that keep your company running and developing in the industry. It involves diversification, liquidation, and many more, which requires you to think about your business capabilities and environment.
One of the most important things to work on when it comes to corporate-level strategy is realizing the missions and vision of your company. Then you need to set the main objectives and goals to help your company achieve those missions.
The second level of an organizational strategy is business-level strategy. It is the bridge that connects the plans in the corporate-level strategy and the functional-strategy (we’ll talk about this in the section below). To put it simply, a business-level strategy turns your business plans into action.
Business-level strategy requires more detailed tasks such as marketing, expanding your company’s presence, rebranding, investigating a new market, and so forth.
Business-level strategy will help you evaluate the benefits and costs of different departments within your company so that you can make decisions on how to utilize your business resources.
Functional-level strategy requires each department of your company to support and facilitate the work towards the final goals.
It comes down to strategies for specific actions that each unit of your company has to fulfill. For example, the marketing department will have their strategies to run a marketing campaign, based on the main missions given at the corporate level, and the initiatives using business-level strategy.
Functional-level strategy is the most detailed among the three levels of organizational strategy. Each department leader has to initiate different projects with specific steps to achieve the main goal.
It is also important to align the goals set at the corporate level with the functional level. As the corporate goals are set by the senior leaders of the company; therefore, it’s important to set the functional-level strategy to fit with what your company wants and aspires to be.
Why Does Your Business Need an Organizational Strategy?
There are various reasons why your business should have an organizational strategy no matter how big or small it is.
Identify problems and priorities
Having a clear strategy with transparent goals allows you to figure out what your company needs, the problems your company is facing, the obstacles that keep your company from accomplishing its mission.
An organizational strategy helps company leaders know which step or which change they should prioritize first and with that order, they can move their business towards the final goals.
Everyone is on the same page
An organizational strategy makes sure that everybody in your business is on the same page, all working together towards the same mission.
The organizational strategy creates alignment with different departments and teams in your company. Contributing ideas and negotiating specific changes or improvements are also easier.
Easier decision making
With a detailed and strategic plan, you can save time making decisions for your company’s activities.
From manufacturing to marketing implementations, with a list of set goals, priorities and initiatives, you are no longer distracted or bothered by different dimensions of ideas and spontaneous changes.
The more detailed your organizational strategy can be, the easier the decision-making process will become.
Some employees simply might not align with your company’s requirements, thus making it hard to reach goals and accomplish company missions.
With an organizational strategy, leaders can choose and keep the right labor and resources to maximize the company productivity.
Key Features of an Organizational Strategy
The most important and foremost factor in making an organizational strategy is to be realistic. You have to identify the real problems and the situation that the company is at, as well as the condition of your company.
With a realistic mindset, you can set realistic goals, rather than vague and overarching missions that require over-capacity that might put a lot more pressure on you and your business.
Budget is like the gasoline that keeps your business going. An organizational strategy should be measurable in terms of how much you spend and how better you get through a certain period of time. You can track your success with metrics and numbers.
Your business focus should be focused and narrow. With relevant objectives, you will know exactly which target audience your company wants to pursue and which steps you need to take, rather than making overarching plans following your own passion.
The objectives and missions of your business should be analyzed thoroughly, considering the market and other factors; therefore, the steps taken in the organizational strategy will be successfully fulfilled.
Each task should have a deadline to keep everybody to work with efficiency. Time-bound objectives will set the goals for the years ahead and make everybody focus on that goal.
Most businesses usually set a five-year-period to achieve a specific goal. A clear period of time for an organizational strategy is essential to allocate the work and resources of your business.
Examples of Common Organizational Strategies
There are various examples of successful businesses that utilize organizational strategies in achieving their long-term goals.
Here are some examples that can help you visualize the effects of organizational strategies:
Increasing the value and exposure of the company sounds like an ideal goal that every leader has to set. With organizational strategies, managers can pursue various growth directions such as expanding the companies in terms of geography, size, range of products or even acquiring a competitor.
This requires corporate-level strategy or diversification as it is important to evaluate and consider the number of costs spent to achieve the growth. The organizational strategy will become the driving force for you and your company to plan the priorities regarding finance and budget to reach the goals.
Setting your company apart from the crowd is one of the main points that helped different businesses such as Uber or Airbnb become successful.
They have changed the way people think about taxis and accommodation. This can be adapted through improving the products or even inventing new benefits that haven’t been seen on the market.
Rebranding or differentiating your company from others need a lot of steps, trials, and sometimes, errors. You need to implement strategic plans and objectives to achieve differentiation.
How to Develop an Organizational Strategy?
Various steps can be taken to identify problems and set missions for your company using an organizational strategy.
Here’s how you can develop an organizational strategy:
Know your business
It’s hard to find out where you are and who you are in the market. You have to view it from the standpoints of others, such as your customers and your competitors.
You need to realize where your business is on the marketplace, what makes it stand out, the problems it’s facing, and what it needs to work on.
Prioritize the importance and set goals
The next step is to think about the future direction of your business. This means you have to prioritize what’s the most important to follow and what requires your and your employees’ full attention.
Once you set the goal of what you want to achieve, you will have to break it down into smaller chunks, rate them in terms of importance and milestones. The goals can follow the S.M.A.R.T format, which are:
- Agreed upon/achievable
Without determining accountability, you will never know where you’re going. You have to consider your budget, action plans, and strategies to allocate your resources and utilize them efficiently.
This means you have to communicate with those in charge of these factors—your staff. Talk, discuss, and figure out necessary numbers and steps. Decide who’s accountable for what, and when. Schedule shifts, assign tasks, and necessary missions for your employees.
You can read more about scheduling strategies here if you’re running a shift-based business.
Develop business culture
The environment and the relationships between you and your employees will decide how your employees will work to achieve the mutual goals, and how people look at your business.
It is important to let people know about your company’s culture and what you have done to build them. What would your employees tell people when asked about your company? How to create a positive impression when people mention the name of your company? How to keep talented and hard-working workers and boost their morale?
It all lies in building a unique and positive business culture for your company.
Review your plan
It’s important to know that making an organizational strategy does not stop at making a list of what you have to do and how you would do to achieve your goals. There exist changes and many other unexpected factors.
You need to evaluate and review your strategy periodically to find out what’s working and what’s not. Discuss with your teams and departments to optimize your business plans and make them better.
Implementing an organizational strategy is a useful way for your company to realize your goals and lead your business to success.
It also helps you and your staff focus on your path and solve problems without being distracted and demotivated by difficulties and problems that arise all the time.
If you haven’t develop an organizational strategy for your business, do it now and you won’t regret it!