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People icons linked together depicting organisational strategy

What is organisational strategy and why does it matter?

Organisational strategy is key for any business, whether it’s an established multinational organisation or even a new business like a small start-up. Strategic planning takes into account business needs and allocation of resources across all teams, meaning that decision-making stakeholders have access to a roadmap that is aligned across the business. Having this roadmap and a defined set of criteria makes decision making more straightforward and helps the entire team reach strategic goals.

The most successful organisational strategies are built on a solid ‘Vision, Mission and Values’ (VMV) for the business. It’s increasingly important to have the company VMV outlined for all to access because it defines why the company exists and what its long-term goals are. Stakeholders can then make strategic decisions that are in line with the mission. The vision encompasses how the business plan will be carried out to achieve those goals – essentially an action plan for getting the company to where it wants to be. Values communicate what the business stands for in terms of ethics and sustainability. The VMV must be authentic to the business in order for it to be truly useful in creating the building blocks of a business strategy.

How is organisational strategy developed?

Organisational objectives are decided at leadership level giving an overarching, new strategy for the business (sometimes called corporate strategy). This is then divided between teams and trickles down to senior and middle management who will help define business goals with focused directives. The long-term goal will be broken down into short-term functional goals which are attainable in weeks and months (rather than years), acting as milestones along the way.

In the past, organisational strategy was much more rigid, with plans being created annually as well as longer-term business plans, which looked five years into the future. However, we live in a time of rapid change, so any company that takes a more flexible and dynamic approach to planning and strategic management will have a competitive advantage. This still requires a business plan that takes into account the needs of the business annually, it just needs reviewing more regularly and there’s more potential for a change in direction. New products, new markets and diversification are all potential routes to responding to changing business needs.

What is a SWOT analysis?

It’s important for the leadership team in a business to be honest about what the strengths and weaknesses of the business are, taking into account competencies and skill gaps. Questions to ask include what did we get right and what did we get wrong? Were we lucky or did our planning contribute to success? SWOT stands for strengths, weaknesses, opportunities and threats. It’s a well-known tool for assessing a business’s capabilities and helping to identify potentially problematic factors when strategic planning.

What is a PEST analysis?

The external environment should also always be taken into account when developing strategy. This means looking at the factors outside of the business that may have an impact, not just the measurable factors within the organisation. The PEST analysis tool allows for political, economic, social and technological changes. These are often not within our control so having sufficient tolerance for risk written into a corporate strategy can provide a safety net in times of flux. Variations on this include PESTLE, which includes legal and environmental variation, and PEST-C which considers cultural change.

How to achieve organisational goals

It’s one thing to write and plan an organisational strategy but actually implementing it successfully is a whole other exercise. In order to achieve the vision, each goal should be stress-tested to ensure that it is:

  • Specific
  • Measurable
  • Achievable
  • Realistic
  • Time-bound

These criteria are often referred to as SMART. Specific means it is tangible; if the organisation wants to be considered as thought leaders in their field, how can that be made a reality? Measurability requires metrics and quantifiable data to show that the goals were achieved. Following on from that, the goals being set need to be actually achievable. Being realistic helps with this last point and asks that factors like budget and talent are taken into consideration before committing. Setting time limits helps ensure that things get done rather than simply being a set of idealistic but unrealistic aims.

How does HR support organisational strategy?

Involving HR at a strategic level is often overlooked, but it’s vital for HR to be on board with long-term business goals so they can support with resourcing effectively and communicating the mission and vision. HR also have insight into skill gaps across the business and can spot potential issues in reaching the organisation’s long-term goals because of staffing. Team dynamics and company culture are also key to reaching a common goal, something that HR can help assess and cultivate. 

Just one way of boosting productivity when it comes to reaching targets is by celebrating milestones as a team and acknowledging the team effort that has gone into making progress.

How to manage communication in an organisation

Alongside the HR team, the marketing and communications team is crucial to help articulate the corporate strategy, business strategy, and functional strategy, so that everyone knows what their goals are day-to-day. Keeping these communications as plain-speaking and jargon-free as possible helps people understand what the longer-term goals in say, a five-year plan, actually mean for them on a practical, everyday level. 

Marketing and communications teams can support leadership in aligning culture with strategy, ensuring that messages are articulated in a way that’s in line with the brand’s DNA and motivating for staff rather than overwhelming. They can also support HR on internal communications that mark milestones in the roadmap and in messaging around rewards for teams or individuals that hit their targets.

Understanding organisational strategy with a Management MSc

Learning about organisational strategy in context is a key element of the Management MSc at the University of Lincoln. Whether you’re new to business and management studies or experienced and want to add to your qualifications, a Management MSc is the ideal course of study.