The Processes of Strategy Development and Implementation
THE PROCESS OF STRATEGY DEVELOPMENT AND IMPLEMENTATION
Clayton M. Christensen and Tara Donovan
The Processes of Strategy Development and Implementation
The Processes of Strategy Development and Implementation
When described with the historical perspective of logically written business school case studies, companies’ strategies often seem to be the product of an organized and rigorous planning process. The way that most companies’ strategies actually come to be defined, however, is often quite different. Organizations whose strategies have propelled them to the tops of their industries not infrequently arrived at those strategies through trial, error and unanticipated success. Rarely was the winning strategy clear to the combatants at the outset. As organizations dive deeper into the undefined waters of the new economy and as traditional business models are being turned inside out, it is crucial that leaders of established and start-up companies alike understand the processes by which strategies are shaped, in order to guide their companies effectively. The purpose of this paper is to describe a simple model of the processes by which strategy comes to be defined and is implemented. Understanding the key dimensions of this process can help executives keep their hands more precisely on those levers that control how strategy gets defined and implemented, and to adjust the workings of that process as the competitive environment changes. Two Processes of Strategy Formulation In every company there are two independent and simultaneous processes through which strategy comes to be defined. The first strategy-making process is conscious and analytical, involving assessments of market structure, competitive strengths and weaknesses, the nature of customer needs, and the drivers of market growth. Strategy in this process typically is formulated in a project with a discrete beginning and end. Top-tier management consultants often manage these projects. The result of
Clayton M. Christensen and Tara Donovan
The Processes of Strategy Development and Implementation
The Processes of Strategy Development and Implementation
When described with the historical perspective of logically written business school case studies, companies’ strategies often seem to be the product of an organized and rigorous planning process. The way that most companies’ strategies actually come to be defined, however, is often quite different. Organizations whose strategies have propelled them to the tops of their industries not infrequently arrived at those strategies through trial, error and unanticipated success. Rarely was the winning strategy clear to the combatants at the outset. As organizations dive deeper into the undefined waters of the new economy and as traditional business models are being turned inside out, it is crucial that leaders of established and start-up companies alike understand the processes by which strategies are shaped, in order to guide their companies effectively. The purpose of this paper is to describe a simple model of the processes by which strategy comes to be defined and is implemented. Understanding the key dimensions of this process can help executives keep their hands more precisely on those levers that control how strategy gets defined and implemented, and to adjust the workings of that process as the competitive environment changes. Two Processes of Strategy Formulation In every company there are two independent and simultaneous processes through which strategy comes to be defined. The first strategy-making process is conscious and analytical, involving assessments of market structure, competitive strengths and weaknesses, the nature of customer needs, and the drivers of market growth. Strategy in this process typically is formulated in a project with a discrete beginning and end. Top-tier management consultants often manage these projects. The result of