FINAL PERIOD ----- LESSON 1---CBME 2
WHAT IS STRATEGY FORMULATION?
Strategy formulation is the process of using available knowledge to document the intended
direction of a business and the actionable steps to reach its goals.
This process is used for resource allocation, prioritization, organization-wide alignment, and
validation of business goals.
A successful strategy can allow your organization to share one clear vision, catch biases by
examining the reasoning behind goals, and track performance with measurable key
performance indicators (KPIs).
Here are five tips to leverage when formulating a successful strategy for your organization.
5 TIPS FOR SUCCESSFUL STRATEGY FORMULATION
1. Start With Purpose
When setting out to create a winning strategy, organizations need a clear understanding of
their mission and core values. Start by asking, “What’s my organization’s purpose?”
In the online course Sustainable Business Strategy, Harvard Business School Professor
Rebecca Henderson discusses the importance of starting with purpose when building your
business strategy.
“We see this pattern in a wide range of firms,” Henderson says. “The leaders and firms who
are driving real change and often reaping the benefits of being first-movers are motivated as
often by the driving desire to make a difference as they are to make money.”
One example of a company that formulated its strategy using purpose is Unilever’s Lipton
brand.
“It started with the feeling that, for communities, we could do a better job,” says Kevin
Havelock, president of refreshment at Unilever, in Sustainable Business Strategy. “It didn’t
start with the business case. We then said, ‘Hang on—how do we bring this to life?’ If it’s the
right thing to do for these people and for the planet, then we should bring it to life for the
brands.”
Instead of jumping right into logistics, Unilever put its values and mission of producing
sustainable tea at the center of its developing strategy, enabling the organization to take
steps to reach that vision.
Henderson notes that this intersection of “doing good” and “doing well”—often referred to as
the process of creating shared value—has the potential to be a highly lucrative space. If the
purpose at the center of your strategy is rooted in sustainability or helping others, there’s
value in pursuing the goal, especially if your organization is the first to do it.
2. Consider Current Events
Another organization that took a purpose-driven leap is L’Oréal. Its response to
the coronavirus (COVID-19) pandemic demonstrates the importance of considering current
events when strategizing.
Earlier this year, the coronavirus spread rapidly across the globe, leaving hospitals with a
shrinking supply of personal protective equipment (PPE) and sanitizers. In addition to an
economic shutdown, the virus caused food, shelter, and job insecurity for many.
L’Oréal USA, alongside L’Oréal Europe (pdf) and other global branches, decided to pivot their
strategic decisions and take action.
“I know I speak for all of my colleagues when I say that we at L’Oréal USA feel a deep
responsibility to do our part to help address this crisis in the many communities in which we
live and work,” said Stéphane Rinderknech, president and CEO of L’Oréal USA, in a press
release.
L’Oréal USA’s coronavirus response included:

Pivoting its North American plants to hand sanitizer production, which it provided free
of charge to all essential healthcare workers, L’Oréal employees, and partners
 Donating $250,000 to Feeding America to support its COVID-19 Response Fund, as
well as matching every dollar donated to Feeding America by L’Oréal employees
 Donating more than $1 million worth of personal care and hygiene products to Feed
the Children
 Donating surgical and N95 respirator masks—typically used in its operations
facilities—to local hospitals lacking PPE
 Freezing the payments of small businesses in its distribution network that were
unable to operate due to the pandemic, such as salons, and shortening payment
times to its small suppliers
This response was strategic, despite ultimately costing the company money. By responding
with donations and support, L’Oréal positioned itself as a brand that cares about its
communities, vendors, suppliers, employees, and customers.
When current events shift and create new challenges and opportunities, the way your
organization responds can lay the groundwork for its strategy moving forward.
3. Consider Data, Case Studies, and Trends
In addition to current events, a competitive strategy must take into account the information
and knowledge you have about your organization, other firms, and the fundamental theories
of economics.
Understanding this information enables you to orient your company in the current business
landscape and learn from others’ mistakes and successes.
“As you think about going out into the world and using these tools of experimentation, the first
thing is to think of yourself as an experimenter,” says Nava Ashraf, an associate professor at
HBS who’s featured in the online course Economics for Managers. “Change your mindset of
what it actually means to look for data from the world that helps you know whether something
works or doesn’t work.”
When crafting your strategy, examine your organization’s financial statements, along with
historical strategies that have been successful and unsuccessful. Also, analyze case studies
of other businesses and the economic principles that underlie them to influence your own
growth strategies.
4. Set and Effectively Communicate Goals
The selection and communication of strategic goals is another important step of strategy
formulation. Research shows that, on average, 95 percent of employees don’t understand
their company’s strategy—a staggering statistic, considering that successful strategy
execution requires organization-wide effort.
“I would argue that the value of clear, honest, explicit communication rises exponentially with
the size of the organization,” writes John Hamm, general partner at VSP Capital, in the
Harvard Business Review.
Hamm likens a leader’s communication style to a professional golfer’s setup and swing.
“In the long term, consistently positive results spring from intelligent strategy and an incessant
focus on the quality of execution,” Hamm writes. “Think of a golf pro like Tiger Woods, whose
best bet for winning major championships is to master his aim, setup, and swing. Once the
ball is in the air, there is no way to control it; it will land where it will.”
Crafting a strategy is crucial, but it can’t be successful unless it’s effectively and artfully
communicated to your entire organization so that all employees feel empowered and
responsible for reaching the company’s goals.
5. Think of Strategy as an Ongoing Process
Once you’ve formulated and communicated a strategic plan, it can be tempting to assume the
strategic planning process is complete. According to HBS Professor Clayton Christensen,
however, strategy is a continual process of development.
“Most people think of strategy as an event, but that’s not the way the world works,”
Christensen says in the course Disruptive Strategy. “More often than not, the strategy that
leads to success emerges through a process that’s at work 24/7 in almost every industry.”
Periodically reassess your company’s strategy to adapt to new challenges and opportunities,
and continue to communicate its evolution to your broader organization.
WHO'S RESPONSIBLE FOR STRATEGY FORMULATION?
While strategy formulation is typically the responsibility of organizational leaders—such as the
CEO and members of the executive team—those in any role can develop their strategic skill
sets to aid in this process. Every employee plays a role in implementing a clear action plan to
improve business performance and ultimately attract potential customers.
As you move forward and embark on your strategic planning, tap into the knowledge and
case studies of those who've come before you. To hone your strategic thinking skills, take a
course on strategy, or speak with contacts in your network about their experiences.
From purpose to plan, communication to reassessment, know that by committing to the
strategic planning process, you’re investing in your organization's future.
https://online.hbs.edu/blog/post/strategyformulation#:~:text=Strategy%20formulation%20is%20the%20process,and%20validation%20of%20business%20goals.
What is strategy implementation?
Strategy implementation is the process of turning your strategic plan into action. Whether you’re
executing a new marketing plan to increase sales or introducing a new work management software to
increase efficiency—your plan is only as valuable as the implementation. In this article, we cover the
pitfalls of strategy implementation and how you can avoid them. Plus check out different frameworks
associated with this process to set you up for success.
Strategy implementation is the fourth step in the Strategic Management Process and it’s where you
turn your strategic plan into action. This can be anything from executing a new marketing plan to
increase sales to implementing a new work management software to boost efficiency across internal
teams.
Having a strategic plan is great, but unless you have the bandwidth, resources, and support to
implement your plan it’s not going to drive actual change in your organization.
We’re going to cover the key steps of strategy implementation, including potential pitfalls and how you
can avoid them, and introduce you to a few frameworks to help you successfully implement any
strategy you’re currently working on
Step 1: Set and communicate clear, strategic goals
The first step is where your strategic plan and your strategy implementation overlap.
To implement a new strategy, you first must identify clear and attainable goals. As with all things,
communication is key. Your goals should include your vision and mission statements, long-term
goals, and KPIs.
The clearer the picture, the easier the rest of your strategy implementation will be for your team and
organization—simply because everyone will be working towards the same goals.
Step 2: Engage your team
To implement your strategy both effectively and efficiently, you need to create focus and drive
accountability. There are a few ways in which you can keep your team engaged throughout the
implementation process:
Determine roles and responsibilities early on. Use a RACI matrix to clarify your teammate’s roles and
ensure that there are no responsibility gaps.
Delegate work effectively. While it can be tempting to have your eyes on everything,
micromanagement will only hold you back. Once you’ve defined everyone’s roles and responsibilities,
trust that your team will execute their tasks according to the implementation plan.
Communicate with your team and ensure that everyone knows how their individual work contributes
to the project. This will keep everyone motivated and on track
Step 3: Execute the strategic plan
Allocate necessary resources—like funding for strategic or operational budgets—so your team can
put the strategic plan into action. If you don’t have the right resources you won’t be able to achieve
your strategic plan, so this should be a top priority. Here’s how you can ensure that your team has the
resources they need:
Start with the end in mind to effectively align your project’s objectives, key deliverables, milestones,
and timeline.
Identify available resources like your team’s capacity, your available budget, required tools or skills,
and any other unconventional resources
Define a clear project scope so you know exactly what your project needs when.
Share your project plan with everyone involved in the implementation process using a work
management tool.
The better built out your strategic plan is, the easier it will be to implement it.
Step 4: Stay agile
You’ll inevitably run into issues as you begin implementing your strategy. When this happens, shift
your goals or your approach to work around them.
Create a schedule so you can frequently update the status of your goals or implementation strategy
changes. Depending on the strategy you’re implementing, you can create weekly, monthly, or
quarterly project status reports. Share these updates with your external stakeholders, as well as your
internal team, to keep everyone in the loop.
Having a central source of truth where you can update your team in real time will help you streamline
this process. Asana’s work management software allows your team to coordinate projects, tasks, and
processes in real time but also gives you the freedom to get work done asynchronously—providing
everyone with the visibility they need to understand who’s doing what.
Step 5: Get closure
Once you implement the strategy, connect with everyone involved to confirm that their work feels
complete. Implementing a strategy isn’t like a puzzle that’s finished when the last piece is set. It’s like
planting a garden that continues to grow and change even when you think you’re done with your
work.
Getting closure from your team will be the second to last milestone of your strategy implementation
and is a crucial step toward completion
Step 6: Reflect
Conduct a post-mortem or retrospective to reflect on the implemented strategy, as well as evaluate
the success of the implementation process and the strategy itself. This step is a chance to
uncover lessons learned for upcoming projects and strategies which will allow you to avoid potential
pitfalls and embrace new opportunities in the future
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Strategy Formulation
Strategy Implementation
Strategy Formulation includes planning and decisionmaking involved in developing organization’s strategic
goals and plans.
Strategy Implementation involves all those means related
to executing the strategic plans.
In short, Strategy Formulation is placing the Forces
before the action.
In short, Strategy Implementation is managing forces
during the action.
Strategy Formulation is an Entrepreneurial Activity based Strategic Implementation is mainly an Administrative
Task based on strategic and operational decisions.
on strategic decision-making.
Strategy Formulation emphasizes on effectiveness.
Strategy Implementation emphasizes on efficiency.
Strategy Formulation is a rational process.
Strategy Implementation is basically an operational
process.
Strategy Formulation requires co-ordination among few
individuals.
Strategy Implementation requires co-ordination among
many individuals.
Strategy Formulation requires a great deal of initiative and Strategy Implementation requires specific motivational
logical skills.
and leadership traits.
Strategic Formulation precedes Strategy Implementation.
Strategy Implementation follows Strategy Formulation.
https://www.managementstudyguide.com/strategy-formulation-vs-implementation.htm