What Is An Organizational Strategy and Why is it Important?

Aug 14, 2017

The Benefits of a Well-Defined Organizational Strategy

In business, you need a well-defined plan in order to succeed. Without an organizational strategy, it’s impossible to set up milestones and know when you’re achieving your goals.

Whether you’re a brand new business, you’re looking to start a business, or you’ve been in business for some time, it’s imperative that you develop an organizational strategy.

Read on to learn why it’s so important, and how you can implement an organizational strategy into your business this year.

What Is An Organizational Strategy?

Organizational strategies sum up all of the actions you intend to take in order to achieve your long-term business goals.

Your organizational strategy will arise from your company’s mission – the reason you’re in business. Every action you take should seek to fill that one purpose, with that mission guiding all of your strategic decisions.

Many businesses aim to put together an organizational strategy, but without paying attention to the best practices surrounding it your strategy may not go as planned. Here are some common reasons why organizational strategies fail:

Lack of understanding of individual, team, and organization capabilities
Insufficient resources and assets to actually execute the strategy
Inadequate time allocation to the tasks involved
Poor financing decisions (failure to appreciate cash-flow needs or under-budgeting)
Insufficient control and project planning

When the above issues arise, this can quickly lead to business burn out while costing you time and money.

Developing an organizational strategy takes resources and time, but there are many reasons why you should take the time to develop a well-defined plan:

To Set Priorities And Direction

By creating an organizational strategy, you’re establishing the priorities and setting the direction for your business. It defines your view of success and also prioritizes the types of activities that will make that view a reality.

Once you’ve defined your strategy, your team will always know what they’re supposed to be working on. And they’ll also know which activities are the most important.

So Everyone Is On The Same Page

As your business grows, you’ll naturally hire more talent. And it’s not uncommon to find that you have teams going in different directions or working to achieve different goals.

Once you’ve created your organizational strategy, you can get your manufacturing, administration, marketing, sales, and operations teams all working together to achieve the same goals.

To Simplify And Clarify Your Decision Making

If you or your leadership team have trouble saying no to potential initiatives or new ideas it’s important to develop a strategy. This is because when you have an organizational strategy, you’ve already prioritized the types of activities you need to complete in order to succeed.

When you have well-defined priorities, you can easily say no to distracting ideas or initiatives.

To Drive Alignment In Your Business

Many companies have smart, hard-working people. Unfortunately, they’re often putting their best efforts into actions and areas that have little effect on actual strategic success.

This is a waste of time and can lead to frustration amongst staff members. Imagine working hard, only to realize that your activities aren’t even aligned with the company’s priorities.

Your organizational strategy allows you to align all of your resources and maximize your strategic success.

So You Can Communicate Your Message

Many business owners are operating with a virtual strategy in their heads. Sure, they know where their business needs to go and the activities that will lead them there, but no one else does.

When your strategy isn’t down in black and white, and you haven’t communicated it thoroughly to your team, no one can really act on it.

When you, your suppliers, and your staff know where your business is going, you have more opportunities for people to help you get there.

Developing Your Organizational Strategy

Your organizational strategy looks at all the things your business could be doing and narrows it down to the things it’s best at. It also helps you determine where to spend your money, human capital, and time.

Developing your strategic plan may seem overwhelming, but by breaking it down into a few steps, it’s much easier to tackle.

Here’s how you can develop your own organizational strategy:

Figure Out Where You Are

This is often more difficult than it sounds. It’s easy to see your business how you want to see it, and not how it actually appears to others.

For an accurate picture of where you and your business actually are, you’ll need to conduct internal and external audits. This will give you a clear understanding of:

Your customers
The marketplace
Your competencies
Your competitors
Your weaknesses

Know What’s Most Important

The next step is to think about where you want to take your business over time. This helps you set the direction of the organization over the long term while clearly defining your vision and missions.

This analysis will allow you to determine your priority issues. These are the issues so important to the overall well-being of your business that you and/or your entire management team must give them your full and immediate attention.

You’ll also need to define what it is you want to achieve. This includes creating milestones along the way, so you and your team will know when you’re on the road for success.

Without knowing what you need to achieve to address these issues, you won’t be able to address them.

As you set your goals, focus on making them S.M.A.R.T. Smart goals are:

Specific
Measurable
Agreed upon/achievable
Realistic
Time-based

Determine Accountability

Without knowing who is accountable, you won’t be able to get to where you need to go.

The budgets, action plans, and strategies are all steps. These steps communicate how you’ll allocate your resources. These include time, money, and employees to address your priorities and achieve your objectives.

That means clearly communicating who is in charge of each step. Employees need to have KPIs, regular reviews, and should be able to come to you with any questions or concerns along the way.

Consider Corporate Culture

A company is only as strong as its people and even if you’re in the process of starting your business your corporate culture needs to be a priority.

The decisions you make early on, before you begin hiring, will impact the type of people who work with you and the success of your business.

Let’s look at some positive examples of corporate culture:

Google supports strategies that depend on constant innovation and development
Pricewaterhouse Coopers has a culture in which employees across many generations band together and overcome differences
General Electric has been going strong for 130 years and has always emphasized a culture of agility

When developing your company culture, consider what you want your company to be known for. What do you want your employees to tell their friends and family members when they ask about your company? What do you want customers to think of your company?

Continually Review

Developing an organizational strategy is never over. In order to ensure your strategy performs the way you designed it, you need to be constantly reviewing it.

That means holding regularly scheduled reviews so you can see what’s working and what’s not. That way you can adjust and refine your plans as necessary.

Every quarter get your team together and take a look at your goals. Discuss whether you’re meeting those goals or if you need to take a new approach. This will ensure that you can remain agile and easily switch to a new plan if necessary.

Once you have your organizational strategy ready to go make sure it’s easily accessible. Often, business plans and strategies end up on a PDF on someone’s computer. Instead, incorporate it into every aspect of your business.

Conclusion

An organizational strategy is a wonderful thing for your business. Regardless of your size, focusing on a strong business plan can help you take your business to the next level.

If you haven’t already started, it’s time to lay out your own organizational strategy. Not only will it help keep your business on track, but you and your team will remain focused on the future and avoid distractions along the way.

Need help registering your business? Don’t forget to check if your business name is available first. Our Free NUANS Preliminary Search searches across Canada so you can be sure your business name is available.