Crafting local and global strategies is a crucial step in the growth of any organisation. However, it’s important to ensure that the local and global strategies are aligned with each other and leverage the capabilities and systems that give the organisation a competitive advantage. In this blog post, we explore how to make local and global strategies work together
The question of whether to start with corporate-level strategy and work downward or begin from the bottom and ascend to corporate strategy has no easy answer. You need to do both, and adjust the fit to each other as you develop them. A balance is essential because solely adopting a bottom-up approach leads to incoherence, while a top-down approach might disconnect from the customer. Diversified companies must find coherence from the top and relevance from the bottom.
Competition occurs at, what Roger Martin refers to as “the coalface”, the place where customers/consumers make their choices. The role of the hierarchy layers above the coalface is to aid coalface businesses in competition and build capabilities and systems that enhance the collective value. If the layers above the coalface are not adding this value then you need to question why you have the layers!
Choices about which capabilities and systems the company builds, invests and maintains are made by the higher levels, in co-ordination with the lower layers. The strategies at the coalface must be benefiting from, and leveraging, the strategic choices of capabilities and systems. There is a process of adjustment and shaping of strategies that goes on before this is achieved to get the higher-level strategic choices clearly adding value and in alignment with coalface strategic choices. It’s an up and down iterative process of discussion.
Without this clear alignment and leverage of strategic choices it is difficult to see why the coalface should bear the costs of the higher organisational levels…they may be better off being a stand-alone business with lower overheads.
Too often organisations pull back from clearly articulating how and why the strategic choices of the higher levels are of benefit to, and integrate with, the strategic choices of the coalface. The opposite is also true: coalface choices that are out of line with high level choices. Neither make sense. To be an effective corporate entity means the whole must add up to more than the sum of its parts, Unless the company makes cascading strategic choices, up and down, that add value to each layer, then the whole will struggle to be more than the sum of its parts.
For help with aligning local and global strategy contact me at Sarah Robertson Consulting or book a discovery call
Ideas for this article are adapted from: https://rogermartin.medium.com/the-whether-how-distinction-69c13f8816d
