Too many strategies can sink your ship!

Crafting an effective strategy is pivotal for organizational success, motivating leaders and employees, and for making decisions. However, the question arises: How many strategies does an organization truly need, and what are the advantages and disadvantages of sub-strategies? Let’s explore this.

A sub-strategy, also known as a functional strategy, pertains to a specific function such as IT, HR, sales, or a particular area like sustainability or Diversity & Inclusion. It can also target a specific country, segment, or business division.

The advantage of a sub/functional strategy is evident—it provides a more detailed and elaborate plan. Such a strategy can encompass various aspects of the specific area, fostering engagement and ownership within the producing unit. Ownership simply tends to be higher when the strategy is internally developed.

However, a word of caution is necessary regarding the proliferation of strategies that sometimes occurs in organizations. There is a potential danger that functional strategies, if not managed properly, can drift in different directions, and divert attention from the organization’s main strategy, common strategic focus areas, vision, and objectives. This can contribute to the formation of silos, sub-optimization, and an additional “strategic layer” in the organization.

Two main reasons often contribute to the myriad of sub-strategies within organizations. Firstly, there might be a genuine need for them as they provide clarity, content, and detail. As organizations grow in size and complexity, the demand for more strategies in specific, functions or markets arises.

Secondly, there’s a less rational aspect related to the prestige and excitement of working with strategies — the perceived importance of having “our own strategy for our area” and the joy of engaging in strategic work.

Nevertheless, I propose questioning the need for functional strategies and considering a direct leap to execution. Some may argue that it’s merely a matter of semantics, whether we call it a functional strategy or a plan for a specific area. However, I disagree.

Transitioning directly from the organization’s main strategy (e.g., specific strategic focus areas) to execution in functions, areas, and markets can be accomplished using various tools such as project plans, action plans, behavioral design, tailored communication, change management initiatives, or local/functional objective setting. This approach can significantly enhance the speed and efficiency of the organization’s strategy execution by bypassing an additional strategic layer.

Execution should focus on achieving the organization’s strategic objectives as swiftly, fast and efficiently as possible. Therefore, it’s crucial to carefully evaluate each instance where the development of a sub-strategy is proposed. Does it genuinely add value to your overall strategic landscape, or does it introduce unnecessary confusion?