Questions you need to ask to develop an effective strategy office

It’s vital that companies develop an agile strategy to maintain pace with digital transformations and other market disruptors, but in creating such a strategy you must also execute it in a way that ensures value creation.

This is never going to be a one-size-fits-all proposition, but you can use the ISC framework to guide your strategy formulation and execution. This framework comprises three different diagnostic points.

Industry dynamics assessment

Following the method from this book, you must identify the business environment for strategy selection by looking at:

• Environment of industry: Is it predictable? If the environment is certain, long-term plans based on analysis and predictions work well. But if the environment is highly uncertain, your strategy needs to be adaptive and flexible. 
• Industry structure: Can single organizations significantly influence industry structure and easily disrupt it? If the industry can be easily influenced and disrupted, short to medium-term planning is recommended and agility is required. 
• Speed of industry dynamics: Is this an industry of continuous change? How quickly are changes apparent? If the industry is changing rapidly and frequently, building adaptive capabilities and change is important for the long term. Strategies need to be adapted fast to react to competitive moves, innovation speed, or changing customer demands. 

Strategy development assessment

• Strategic approach: What is your strategic time horizon and are you taking a more homogeneous or heterogeneous approach to your strategy (one size fits all for all Bus, or do you allow for variation in the approach)?
• Strategic making: Are you developing strategies deliberately (i.e. an analytical and plan-driven approach focusing on the overall direction and viability of the firm for a given time horizon), or rather in an emergent process (i.e. a design-led approach based on new insights, changed market developments or other changed circumstances that warrant a shift in conducting business)? To what degree do you involve a small part (i.e. top-down with C-suite and top management) or a larger part of the organization (i.e. bottom-up in collaboration with BUs, geographies and functions) in your engagement process?

Choices for operating model of the strategy office

• Activity scope: What is the involvement of the strategy office in the formulation and implementation of the strategy?
• Strategic growth: Is the strategy office involved only in organic growth, or also in mergers and acquisitions?
• Role of strategy officer: Is the role of the strategy officer more of an internal consultant, or a change agent?

Weighing your answers to each of these questions will help you find a balance from which you can create an effective strategy process and a strategy office that is responsive enough to change with your company and your industry’s needs in a transformational environment.