STRATEGY IN ORGANIZATIONS

Original article published in catalan on 02/24/24

What is the strategy an organization? We could define it as the plan that an organization decides to follow over a set period. It is the direction, the map that allows us to look beyond and set long-term goals. Therefore, developing a strategy is highly recommended for any organization aiming to fulfill its mission effectively.

The mission is the reason for existence, the reason why organizations are established, and it usually remains stable over time, or at least for several years. In contrast, the strategy is set for a much shorter term, typically between three and five years.

Not all organizations question and reevaluate their strategy. I would venture to say that organizations that do not engage in periodic strategic reflection processes can be explained by two main reasons:

Organizations in delicate or critical economic situations that focus all their energy and efforts on reversing this situation.

Organizations that believe they can continue working "without lifting their eyes from the ground, without looking a bit beyond their own steps," and who think that if they keep working as they always have, they will fulfill their mission.

The first case is entirely reasonable. In critical moments, efforts are focused on "survival," reversing financial losses, and ensuring cash flow, the "oxygen."

The second case involves organizations that do not value or are unaware of the importance of defining and setting a strategy. These organizations are likely to become outdated, archaic, and therefore not contribute optimally to achieving their mission.

Once the strategy is defined and approved, there will be two main plans/levels of work: the strategic plan and the operational plan.

The strategic plan is one that requires us to step back slightly from day-to-day activities to drive and guide the organization towards the approved plan, while the operational plan deals with the daily activities and development of the entity.

Here we encounter two main challenges: On one hand, it is important that the strategic and operational levels maintain a connection. The strategy should guide and direct the operations, so it must be aware of the current status, capabilities, and needs to move forward. Similarly, operations should understand the strategy and align with the outlined path. If these two plans do not remain connected, the strategy will not effectively advance the organization according to the decided direction.

On the other hand, it is necessary to balance efforts and resources between these two plans, as they feed into each other. Finding and maintaining this balance could be likened to what Peter Senge refers to in "The Fifth Discipline" as the point of creative tension: "This is the space between vision and reality and is also a source of energy. If this gap did not exist, there would be no need for action to move toward the vision (or strategy). The gap is a source of creative energy."

To conclude, one way to address these two challenges is to conduct participatory strategic reflection processes. These processes seek to listen to the different voices within the organization and build the strategy collectively. Strategies designed and approved solely by management or governing teams tend to be more disconnected from day-to-day operations, making it harder to connect and balance the strategic and operational plans.

Additionally, it is also beneficial for organizational models to be explicitly designed to facilitate strategy emergence from any part of the organization. This way, we further strengthen the connection between daily operations and strategic deployment.