What is Enterprise Strategy?

Enterprise Strategies – often called competitive strategies – identify how each individual enterprise will compete within its respective market and industry. Superior enterprise strategies are imperative to the success of the business because they link the business to its markets. So, enterprise strategies form the foundation for a successful business.

Unfortunately, most enterprises don’t have a clear understanding of strategy! The following quote from Geoffrey Moore is indicative of the conversations that we have had with senior leaders, which is really concerning:

“Most strategy dialogues end up with executives talking at cross-purposes because…nobody knows exactly what is meant by vision and strategy, and no two people ever quite agree on which topics belong where.

That is why, when you ask members of an executive team to describe and explain the corporate strategy, you frequently get widely different answers. We just don’t have good business discipline for converging on issues this abstract.”

– Geoffrey Moore, Escape Velocity [1]

Pro tip

I try to research a company’s strategy before starting an engagement; you can gain valuable insights from its website or its published financial statements. Failing which, ask them for their strategy (which, more often than not, has been created by a third-party consulting firm that is now gathering dust somewhere in someone’s drawer!).

A strategy is best described as a plan of action to achieve the mission of the enterprise. Therefore, defining a strategy may be the most critical activity of every enterprise, which makes it even more surprising many companies outsource this to a third-party consulting firm to devise.

An effective strategy answers four critical questions about the business:

• What customers and markets do we serve?
• What products and solutions do we provide?
• What unique value and resources do we bring to the endeavor?
• How will we extend them in the future?

From a Scaled Agile Framework (SAFe®) perspective, we recognize that we are not experts in defining strategy. It is not what we do as SAFe® Practice Consultants (SPCs); we need to understand the basic constructs that make them up and recognize that it needs to exist because it provides two critical outputs:

• Portfolio budgets
• A set of Strategic Themes for each portfolio

Businesses have various approaches to developing an Enterprise Strategy; however, a model adapted from Jim Collins’s Beyond Entrepreneurship shows a number of elements of Enterprise Strategy formulation [2]:

• Vision: This represents the future state of what the business wants to be. It’s persistent and long lasting.

Pro tip

If you are presented with a vision that is a 200-slide PowerPoint deck, then talk to the leadership team to try and persuade them to make something more engaging. There are a lot of good examples of visual and engaging representations of a vision, for example, a short video or a postcard from the future. My favorite example is from Bosch – Live like a Bosch [3].

• Mission: This identifies the business objectives that implement the enterprise vision and frame the strategy. They may be somewhat more temporal and likely be incremental in that each builds on the one that came before.
• Core values: Core values are the fundamental beliefs of the organization. These guiding principles dictate behavior and can help people understand the difference between right and wrong. Core values also help companies to determine if they are on the right path and fulfilling their goals by creating an unwavering guide.

Pro tip

Create core values that have been co-created by the people that work in the organization and have to live by these values. Then make sure that they are published on the internet and on the office walls, so they are there for all to see. I still have mine on a laminated credit card I carry in my wallet from a company I left over 10 years ago.

• Enterprise business drivers: Reflect on the emerging industry themes and trends that affect the business.
• Distinctive competence: Strategy naturally leverages distinctive capabilities, the unique advantages that differentiate this business from others, and provides a competitive edge.
• Financial goals: Whether measured in revenue, profitability, people market share, or other metrics, financial performance goals should be clear to all Stakeholders.
• Competitive environment: Competitive analysis identifies the most significant competitive threats to the business.

So, now we understand at a high-level what Enterprise Strategy is and why it is critical. We also considered the elements for strategy formulation, but let’s now consider what happens when market conditions change, and we have to adapt our strategy.