The Foundation of Strategy: Who are you?

Who are you? What do you do? What is your current business model? What is your current revenue model? Where are you currently positioned within your competitive landscape? Who are your customers? How do your customers currently perceive you? What is your organization's culture? 

In order to develop strategy in a complex environment, you have to have a thorough understanding of who you are, what your identity is and what your organizational perspective is.

Managers with a linear perspective on the environment tend to develop business models to fit what they think are predictable futures. The consistency of execution of these business models determines the success of the organization only for the duration of that predictable scenario. This, in turn, drives the organization's culture as those people and ideas that fit within the consistency of the business model are kept and those people, ideas and opportunities that don't fit are discarded. In other words, strategy can be viewed as a reflection of the organization's culture

In the machine model of business, strategy is set at the top of an organization and communicated to the rest of the firm. Actual strategy, on the other hand, emerges as a result of the myriad actions of the stakeholders of an organization as they perform their day-to-day tasks: who they call, who they sell to, who they buy from, which tasks they choose to perform, who they hire and so on. These daily tactical decisions are made based on internal processes, incentive programs, tactical resource allocations and other bits and pieces that make up organizational culture. The sum total of all these things describe who you are as an organization.

Bottom line: the foundation of strategy is understanding who you are as an organization. Not what you think you are, or what top management has decreed you are, but what emerges as the identity and perspective of your organization from the sum total of all the actions of the organization.

Bruce Borup