Four Methods of Crafting Strategy

Prof. Sheperd Sikhosana

Introduction

This article briefly discusses four methods of crafting a strategy. The methods or approaches discussed are the Chief Architect Approach, the Delegation Approach, the Collaborative or Team Approach and finally the Corporate Entrepreneur Approach.

The Chief Architect approach A single person

The owner or CEO assumes the role of chief strategist and chief entrepreneur, single handedly shaping most or all of the major pieces of strategy. This does not mean that one person is the originator of all the ideas underlying the resulting strategy or does all the background data gathering and analysis: there may be much brainstorming with subordinates and considerable analysis by specific departments. The chief architect approach to strategy formation is characteristic of companies that have been founded by the company’s present CEO.

Michael Dell at Dell Computer, Steve Case at America Online, Bill Gates at Microsoft, and Howard Schultz at Starbucks are prominent examples of corporate CEOs who exert a heavy hand in shaping their company’s strategy.

The Delegation Approach:

In this delegation approach, the manager in charge delegates big chunks of the strategy-making task to trusted subordinates, down-the-line managers in charge of key business units and departments. A high-level task force of knowledgeable and talented people from many parts of the company who are self-directed and who work as teams are granted authority over a particular procedure or function, or, more rarely, a team of consultants brought in specifically to help develop new strategic initiatives.

The Collaborative or Team Approach

This is a middle approach whereby a manager with strategy-making responsibility enlists the assistance and advice of key peers and subordinates in hammering out a consensus strategy. Strategy teams often include line and staff managers from different disciplines and departmental units, a few handpicked junior staffers known for their ability to think creatively, and near-retirement veterans noted for being keen observers, telling it like it is, and giving good advice.

Electronic Data Systems conducted a year-long strategy review involving 2,500 of its 55,000 employees and coordinated by a core of 150 managers and staffers from all over the world. Nokia Group, a Finland-based global leader in wireless telecommunications, involved 250 employees in a strategy review of how different communications technologies were converging, how this would affect the company’s business, and what strategic responses were needed.

The Corporate Entrepreneur Approach

In the corporate entrepreneur approach, top management encourages individuals and teams to develop and champion proposals for new product lines and new business ventures. The idea is to unleash the talents and energies of promising corporate entrepreneurs, letting them try out business ideas and pursue new strategic initiatives. Executives serve as judges of which proposals merit support, give company entrepreneurs the needed business and budgetary support, and let them run with the ball. W.L. Gore & Associates, a privately owned company famous for its Gore-Tex waterproofing film, is an avid and highly successful practitioner of the corporate entrepreneur approach to strategy making. Gore expects all employees to initiate advancements and to display innovativeness.

Conclusion

The four strategy crafting approaches discussed above have all yielded results in different circumstances. It is important that when formulating a strategy, one looks at the prevailing circumstances and apply the right approach to strategy formation.