October 10th in Case Study by .

Case Study: Strategy by Collis, David and Rukstad, Michael

Summary on Collis, David and Rukstad, Michael (2008), Can You Say What Your Strategy Is?

Article by David Collis and Michael Rukstad, published by Harvard Business Review, April 1, 2008. This article emphasize that most executives don’t know the elements of strategy statement. Executives are crucial to bring new innovations to the market and can therefore contribute to transitions. This study identifies three critical components of a good strategy statement: objective, scope and advantage. Basically it explains how a company knowingly …

Summary on Collis, David and Rukstad, Michael (2008), Can You Say What Your Strategy Is?


Article by David Collis and Michael Rukstad, published by Harvard Business Review, April 1, 2008. This article emphasize that most executives don’t know the elements of strategy statement. Executives are crucial to bring new innovations to the market and can therefore contribute to transitions. This study identifies three critical components of a good strategy statement: objective, scope and advantage. Basically it explains how a company knowingly makes mistakes.

These days, successful companies seem to have a system for everything. From acquiring new customer to managing customer relationships, from quality management to performance measurement, industry leader have realized that having systematic process in place reduces risk, prevents oversights, and assures the best chance of delivering results. Yet, despite this insight, most companies still haven’t developed a system to manage their most important process: how to develop and execute their strategies.

The reading in this article leads to couple of questions, which are as follows: “ Can you summarize your company’s strategy “ in thirty five words? If yes, would your colleagues put the same way?  I have worked with three multinational companies in India and I have many friends who are working in a big position for other multinational companies keeping all my work- experience and knowledge without any hesitation I can say that only very few people can answer the above questions with confidence. The authors contend that the most successful companies have executives that can answer those questions.

Often, however, discussions on strategy ignore the execution factor because managers fail to see it as part of the big picture. Without a clear strategy, workers and managers are not clear on which opportunities to pursue and which to pass over. And without clear direction they don’t know whether growth is more important than profits. Mixed signals are frustrating and lead to poor results. Leaders often think they have a strategic statement, when in reality it is anything but that. “It is a dirty little secret that most executives don’t actually know what all the elements of a strategy statement are, which makes it impossible to develop one,” the authors say.

To brief on the three critical components of a good strategy statement are as follows

  • Objective:  is the part of a strategy statement that most companies have defined, but often not well. Most times they confuse their mission with their strategic objective. A strategic objective should be the “single precise objective that will drive the business over the next five years or so,” say the authors. It should be specific, achievable, and measurable and include a time frame. A mission statement (why your company exists) is not useful as a strategic goal that drives the business forward. In fact, your competitor could share the same mission statement with your company. But it’s unlikely that they will share the same strategic objective.
  • Scope:  This is further split into three aspect such as customer or offering, geographic location, and vertical integration. These three dimensions are not necessarily equal.  The scope is not as clear-cut as the objective, as it allows for flexibility by employees, but it should specify where the firm or business will not go.
  • Advantage: is the key aspect of a strategy statement. It makes the point clear that what makes your company distinctive from its competitors. It should have two parts: A statement of the customer value proposition or why your customer should buy your product or service; and a description of the company’s unique attributes that allow it to deliver on its customer value proposition.

In this study strategy is defined based on the three critical components: objective, Scope, Advantage, they are designed and executed to reach goals. This involves a careful analysis of the business landscape you are in and a clear understanding of where the sweet spot is, that will enable your company to stand out from the crowd. And then this all needs to be boiled down to a brief statement that can be distributed to everyone in the organization.

While the role of executives as a driving force in successful companies is widely acknowledge. So what does a strong strategic statement look like? The authors provide a good example from Edward Jones, a St Louis- based brokerage firm that has quadrupled its market share in the last 20 years. Jones aims to “grow to 17,000 financial advisers by 2012, by offering trusted and convenient face-to-face financial advice to conservative individual investors who delegate their financial decisions, through a national network of one-financial-adviser offices”. Jones didn’t arrive at that statement easily.

Strategic planning is typically oriented to a particular organization’s circumstances at a particular time in its history. However, there are a number of proven and effective practices and methodologies that can be adapted for virtually any business. In this article authors provide a brief overview of current “ best practices” and considerations for managers to explore throughout the strategic planning process.

A well-crafted statement takes a lot of discussion and debate, as well as careful analysis of the repercussions of each part of it. Strategies are operational if companies face relatively low uncertainty and are mostly attempting to play the same old game better than the competition does. Finally, sometimes the senior management of a company must push for exceptional performance and rethink its entire business at the same time — that is, execute both organizational and transformational strategies.

We believe that most companies can benefit from thinking of strategy as the art of what is possible for them. A capably executed strategy will deliver better results than one that may be more elegant in principle but does not reflect an organization’s strengths. Being clear about an organization’s strategic goals provides focus and helps manager understand how to direct their resources and make decision on a daily basis.

One Comment

  • Dilip
    May 9, 2012

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