Strategize Strategically | Use the Andrews’ Strategy Framework for Formulation and Implementation

Model Name: Framework for Strategy Formulation and Implementation
Creator: Kenneth Andrews
Year: 1971
Purpose: To implement strategies in terms of objectives, purposes, goals and major policies and plans to achieve goals in such a way that it aligns the company’s business, mission, and values. To implement the strategy as the common thread among the organization’s activities and product markets.

If you are setting out on a mission, the first thing you need is a plan. Got some dreams you want to turn into a reality? Again, establishing a plan is the only way to really get started.

In business, planning each and every move and executing it according to informed preparationand scheduling is what we call “business strategy.”

Every competitive business formulates a strategy it is equipped to design and implement. These high-level plans for accomplishing business objectives are crucial if you want:

Meet the Father of Business Strategy

Business strategy is something that people have innovated and implemented for organizational success since man invented the art of trade. However, it was only during recent years that the concept of business strategy was clearly outlined and popularized for business education and practical application.

One of the “founding fathers” credited with the introduction of business strategy is none other than Kenneth Andrews, a noted business academics professor at Harvard Business School.

Andrews taught the foundational concepts and roles of business strategy and practical strategy formation to his students at Harvard. He also wrote books to encase his teachings for present and future businesses around the world.

Now, even though Andrews provided us with a number of business strategy principles and guidelines, he did not draw a distinction between business objectives, business policies, and plans of action.

Andrews prescribed that the management of each business should deliberately and consciously decide what their strategy is and what it means to them.

Similarly, although Andrews developed a model or framework of:

• Strategy formulation
• Implementation,

He still did not detail strategic control and evaluation. He left this subjective component of the business strategy to individual management bodies to resolve on their own.

As immortalized by the golden words of Sun Tzu, the strategy is a consciously considered plan without which, defeat is inevitable. You can choose to apply tactics without strategy, but that would be like setting yourself up to fail.

Reasons to formulate and Implement Strategies?

These are some of the reasons for formulating and implementing strategies:

1. Goals cannot only be stated in terms of financial profit maximization
2. Planning ahead is critical for moving forward
3. Adjusting to the environment isn’t enough; businesses need to influence the environment too
4. Setting visible goals acts as an inspiration to organizational effort and supports cooperation
5. The strategy serves as the focus of organizational effort, and propeller of constructive stimuli and organizational self-control.

Andrews’ Strategy Framework

According to Andrews’ model formulation and implementation of corporate strategy are the two factors responsible for influencing organizational structure, behavior, processes and internal and external business relationships.

What’s more, Andrew theorizes that his strategy framework impacts top leadership with the same magnitude of influence as well.

What are the purposes of Andrews Framework?

Andrews’ theoretical framework has the following elemental features that make it the ideal strategy formulation framework for any organization, of any size, belonging to any industry:

1. It provides the solid groundwork for organizational research which is required for informed managerial configuration and design.
2. It recognizes that not every company has the same organizational structure – the levels of structure vary from business to business.
3. It teaches that strategy is not always the result of a purposeful formulation or systemic analysis – sometimes, they emerge to confront developing situations, whether they be emergencies or unexpected opportunities.
4. It informs that corporate strategy is an overall product of strategy formulation and implementation, where formulation and implementation are strongly interlinked and bi-directional processes.
5. It defines that strategy formulation is a dynamic process, rather than being a linear or static one, and should be treated as such.
6. It depicts that once a strategy is implemented, the outcome should inform strategy reformulation to resolve newly identified gaps and bridge the gap between targets and outcomes.

As a company’s material resources change over time, so do its managerial aspirations and objectives, not to mention personal values. Corporate strategy is therefore dynamic so that it keeps undergoing eventual changes to reflect the changing interests of the involved parties.

Actually Using the Framework

What is Strategy formulation?

Strategy formulation is a rational decision which comes about as a product of multiple sub-activities:

• Identifying external environmental opportunities and threats
• Appraising the strengths and weaknesses of the organization
• Attaching risk to market opportunity
• Accessing capacity to capitalize on perceived markets on the basis of resources and competence
• Considering preferences of senior management in this regard including personal aspirations
• Finalizing decisions in light of the company’s obligations to relevant segments of society

What is Strategy implementation?

Likewise, strategy implementation comprises a series of administrative sub-activities as well:

• Mobilization of financial, material, technical, and managerial resources
• Execution of a sustainable organizational structure made effective by coordinated relationships and comprehensive information systems.
• Streamlining of organizational processes including management development, performance measurement, and compensation.
• Subsequently directing changes in desired business behavior through a system of incentives and controls
• Emphasizing the role of personal leadership in the accomplishment of strategy in organizational, strategic, and personal capacities

Evaluating the Implementation

Is your Strategy optimal to obtain business objective?

How do you know that your applied strategy is optimal for forwarding your business objectives? To find out the answer to that, the following questions need to be answered:

1. Has the strategy been clearly outlined and defined in terms of words and/or practice?
2. Does the strategy fully capitalize on the company’s available environmental opportunities?
3. Is the strategy consistent in terms of current and projected company resources and skills?
4. Is the strategy consistent with the company’s major internal requirements and policies?
5. Does the strategy align with the personal aspirations and values of senior management?
6. Is the strategy appropriately contributing to society at the company’s desired standards?
7. Does the strategy clearly serve as an impetus for organizational commitment and efforts?
8. Can any early indications of responsiveness to the strategy by market and market segments be noted?

An Abundance of Strategies

Strategy discussions are always complicated because in most cases, businesses have not one but many strategies in action.

Marketing strategy, financial strategy, competitive strategy, price strategy, and operational strategy are just some general examples.

All strategic plans of a company inevitably interact, but each strategy still has its own objectives and plan of implementation.

This is why, to shun away the complexities of business strategy, Andrews prescribes that we view each strategy as part of a strategic framework. This hierarchy simplifies the process of organizing, planning, researching, coordinating, cooperating for business strategies. It also facilitates successful and streamlined implementation.

Final Thoughts

So here you have it, folks, the how-to’s, do’s and do not’s of strategy formulation and implementation, directly from the father of business strategy. Some business lessons are timeless, and this is surely one of them.