In the ever-evolving landscape of business, enterprises face the challenge of charting a clear path towards success and sustainable growth. For instance, when the retail giant, Walmart, faced stalling sales due to stiff competition from e-commerce platforms, it was challenging to formulate a roadmap into the future.
Navigating through uncertainty and making strategic decisions requires a well-organised and collaborative effort, which is where enterprise strategy teams, comprising a diverse group of experts from different departments, play a crucial role.
In this blog post, we’ll explore the significance of enterprise strategy teams, their functions, and the essential elements that make them successful.
The Purpose of Enterprise Strategy Teams
Enterprise strategy teams help to shape the future of organisations by aligning vision, resources, and objectives.
The primary purpose of an enterprise strategy team is to create a cohesive, forward-looking strategic plan that guides the entire organisation towards achieving its long-term goals.
The enterprise strategy team, as they formulate and communicate the strategic plan, acts as a catalyst for an organisation’s future success. They bring together a wealth of knowledge and experience from various functional areas, enabling them to analyse market trends, competitors, and internal capabilities.
Key Functions of Enterprise Strategy Teams
Enterprise strategy teams are the backbone of an organisation’s strategic vision. They act as both the compass and the map, setting a strategic direction and guiding the organisation in its journey towards an envisioned future.
There are six key functions they perform.
1. Vision and Mission Alignment
Enterprise strategy teams work closely with top management to develop a clear and inspiring vision and mission. These statements serve as the guiding light for all departments, which gets transcribed into business priorities and objectives, ensuring that everyone is moving in the same direction.
A prime example is Apple, renowned for its clear vision of creating attractive user-friendly products. The vision is consistent across all departments, leading to a natural alignment of R&D, product development, and marketing functions.
2. Environmental Scanning
Keeping a close eye on the business landscape, enterprise strategy teams analyse market trends, technological advancements, regulatory changes, and consumer behaviour. This helps identify potential opportunities and threats, allowing the organisation to stay ahead of the curve.
For instance, Toyota’s analysis of changing market trends and consumer preferences enabled it to launch the world’s first mass-produced hybrid vehicle.
3. Goal Setting and Performance Measurement
Enterprise strategy teams collaborate with business unit heads to set specific, measurable, achievable, relevant, and time-bound objectives (i.e. SMART goals). Regularly tracking performance against these goals through a scorecard enables continuous improvement and course correction when necessary.
For example, Google’s Objective & Key Results (OKR) performance management system provides clarity on what needs to be achieved and how success will be measured.
4. Resource Allocation
One of the critical responsibilities of enterprise strategy teams is to allocate resources effectively. This involves prioritising projects, optimising budget allocation, and ensuring the right talent is assigned to the right tasks. They are the gateway to centralising the assessment and prioritisation of initiatives across the businesses that will accelerate the strategic growth agenda of the enterprise.
For instance, Procter & Gamble’s ability to successfully allocate resources among its vast portfolio of brands has been a cornerstone of its continued growth and innovation success.
5. Risk Management
Identifying and mitigating risks is a crucial aspect of strategic planning. Enterprise strategy teams assess potential risks and devise contingency plans to minimise their impact on the organisation.
As enterprise strategy teams are not risk experts, working with internal risk colleagues and 3rd party vendors is necessary to ensure appropriate rigour and discipline is put in place to design the risk review framework.
Since risk can be unavoidable and uncontrollable, risk management is not just about drawing up a list of rules to follow. For example, the Deepwater Horizon oil spill highlighted gaps in BP’s contingency planning processes, which caused avoidable environmental harm, $65B in legal fees and clean-up costs, and significant damage to BP’s reputation.
6. Innovation and Creativity
Encouraging innovation and creativity is vital for staying competitive in today’s fast-paced business environment. Enterprise strategy teams play a central role in fostering a culture of continuous improvement and exploration of new ideas. This further stems to identifying the right capabilities to develop, particularly in the realms of digital, platform, automation, and data & analytics.
The importance of cultivating a culture of innovation can be seen in the evolution and eventual dominance of Amazon Web Services, a profitable business unit that exists largely due to Amazon’s willingness to experiment with new ideas and patiently make big long-term bets.
Essential Elements of Successful Enterprise Strategy Teams
In architecting long-term strategic plans, the constitution and dynamics of enterprise strategy teams are crucial. The success they produce isn’t serendipitous but instead rooted in core elements that influence their effectiveness.
There are seven key elements of a successful enterprise strategy team.
1. Diverse Expertise
An effective enterprise strategy team brings together professionals from different backgrounds, including marketing, finance, operations, technology, and human resources. However, given the strategic nature of the job, the majority of the team members will have a strategy consulting background. This diversity ensures a comprehensive approach to problem-solving and decision-making.
2. Open Collaboration
Open and transparent communication is the backbone of any successful strategy team. Members must feel comfortable sharing insights and challenging each other’s ideas constructively.
3. Data-Driven Decision Making
Using data analytics and insights is crucial for evidence-based decision-making. Enterprise strategy teams should leverage data to make informed choices and prioritise strategic initiatives.
4. Agile Strategies
The business landscape is dynamic, and strategies must be flexible enough to adapt to changing circumstances. Enterprise strategy teams should be able to quickly respond to emerging opportunities and threats.
5. Long-Term Vision
While it’s essential to address short-term challenges, successful enterprise strategy teams need to keep their focus on the organisation’s long-term vision to ensure sustained growth and resilience over time.
6. Executive Support
The support and involvement of top-level executives are instrumental in the success of enterprise strategy teams. When leadership actively champions strategic initiatives, it encourages buy-in across the organisation.
7. Goodwill with Stakeholders
One of the biggest roles of enterprise strategy teams is to act as integrators of different business units by breaking siloes, bridging the gap, and facilitating dialogue.
The larger the enterprise the higher the likelihood that information will get lost in the cracks and individual business units will not have insight into what’s happening across other business units. As such, having great relationship management skills to build goodwill with internal stakeholders is key to success.
Concluding Thoughts
Enterprise strategy teams are the driving force behind the success of organisations in a rapidly changing business landscape. By aligning vision, resources, and objectives, these teams play a critical role in developing a clear and cohesive strategic plan.
Emphasising collaboration, data-driven decision-making, and adaptability, successful enterprise strategy teams empower organisations to thrive in the face of uncertainty.
With the support of top management and a diverse group of experts, these teams are the key to unlocking an organisation’s full potential and achieving sustainable growth for years to come.
Jason Oh is a Senior Manager at TD’s Enterprise Strategy team. Previously, he was at Strategy&, EY, and Novantas as a strategy consultant, where he provided advisory services to senior management teams across financial services.
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