Do we have a strategy?

While ‘strategy’ is a commonly used term in corporate world, it is quite difficult to define what it is, to determine if an organization has one and to communicate the organization’s strategy. Many times this results in the question ‘Do we have a strategy?’. Hambrick, D.C., & Fredrickson, J.W., (2005) have introduced the ‘Strategy Diamond’ framework which is useful to identify 5 key elements of an organization’s strategy, to address the challenges in comprehensively specifying an organization’s strategy and communicating the same. In their paper, they have positioned strategy as a central integrated and externally oriented approach of an organization to achieve its goals. A key input to this strategy formulation is the outcome of the strategic analysis of the organization in the context of the industry.

The elements of the ‘Strategy Diamond’ are:

• Arenas: Where will we be active and with how much emphasis?
• Vehicles: How will we get there?
• Differentiators: How will we win in the marketplace?
• Staging: What will be our speed and sequence of moves?
• Economic Logic: How will we obtain our returns?

By addressing the specific details spelt out in the paper for each of these 5 elements, organizations can come up with their strategy, specify it objectively and communicate the same to stakeholders. The authors have illustrated the application of the ‘Strategy Diamond’ in the context of two organizations.

Reference:

• Hambrick, D. C., & Fredrickson, J. W. (2005). Are you sure you have a strategy?. Academy of Management Perspectives, 19(4), 51-62.