White paper Strategy review: testing positioning and implementation

A strategy review is an examination of a company’s strategic positioning. It takes into account current market requirements and the degree to which the strategy has been implemented within the organisation. Both are examined: whether the positioning still fits the market and whether it has taken hold in the organisation.

The reason lies in the strategy process itself. If it becomes routine, there is a risk of constant self-confirmation. In dynamic markets, this leads to a serious corporate crisis in the long term.

Behind this is a finding of systemic organisation theory. Organisations observe their environment through established observation and assessment grids and condense information into decisions in characteristic communication routines. These routines are well practised and easily direct attention inwards and towards the past.

A strategy process that follows the same pattern year after year is itself such a routine. It reliably delivers results but questions its own assumptions less and less often.

This is where the benefit of an outside view lies. External support brings in perspectives that do not exist within the organisation and makes visible where strategy work mainly confirms what is already known. The review is thus an examination of the strategy and at the same time an examination of how the organisation does strategy.

The review delivers results in six fields. Three of them concern positioning in the market, three concern implementation in the organisation.

The first field is the assessment of market developments and core competencies. Current trends in the socio-technical landscape and market developments are assessed, and the company’s own core competencies are evaluated.

The second field creates clarity about the expectations of customers and stakeholders. The expectations of the various stakeholder groups, including customers, are compared with one another. It is examined to what degree current offerings fulfil them.

The third field is the review of strategic options. The company’s strategic positioning is examined with regard to economic objectives as well as ecological and social aspects.

The fourth field creates clarity about the degree of strategy implementation. It is examined how firmly the picture of the future and the strategic positioning in the market are anchored in the organisation.

The fifth field is the evaluation of the impact of strategic initiatives. The degree of strategy implementation and its impact are considered from the perspectives of the Strategy Map: Purpose, Planet, People and Profit.

The sixth field is the examination of organisational strategy routines. The established routines of strategy work are reviewed with the aim of overcoming the inward and backward-looking orientation.

The review works along fourteen core questions. The first seven focus on the market, the company’s own competencies and the expectations of stakeholders.

The first question concerns the topics that occupy the company in its markets and that must be observed. This includes how observed trends are dealt with, including with regard to external ecological and socio-economic factors.

The second question concerns the market segments: which can be defined, and which are particularly attractive in terms of growth, profitability and volume?

The third question focuses on core competencies. It must be clarified which core competencies strategic considerations can build on and which need to be developed for the future. The fourth question brings things together: what are the key strategic questions the company has to answer?

The fifth question concerns sustainability. What opportunities and risks arise from the legal requirements for climate neutrality and from the growing sensitivity of customers and end consumers to sustainable business?

The sixth question changes perspective: to what extent does the company currently meet the benefit expectations of customers and other stakeholders from their point of view? The seventh question deepens the picture of the customer. It asks which customer segments can be distinguished by behaviour and needs.

Questions eight to fourteen lead from the strategic options, via the picture of the future, to implementation in the organisation.

The eighth question opens up the space: what fundamental options for strategic positioning does the company have? The ninth question calls for a decision. How should the company be positioned for a successful future, and what does an attractive and viable picture of the future look like?

The tenth question specifies this picture: what are the target markets and target customer segments within the picture of the future? The eleventh question focuses on the offering. It must be clarified how offerings need to be designed to meet the expectations of the relevant customer segments and to use value creation potential.

The twelfth question turns inwards: how must internal processes, structures and resources be developed further in a targeted way in order to use market potential and meet market requirements?

The thirteenth question concerns steering. How can it be assessed at an early stage whether the company, in implementing the strategic measures, is on track to achieve the picture of the future or whether adjustments will be necessary?

The fourteenth question concerns the organisation: which organisational structure and which forms of collaboration are required to achieve the strategic goals? With it, the review extends beyond market strategy into the design of the organisation.

The strategy review follows a six-step approach. In the first step, the starting position of the current organisation is captured. The requirements of the market and of stakeholders are taken into account.

In the second step, the challenges and the target picture are specified. From the starting position, it is derived what the company has to cope with and what it is working towards.

In the third step, the strategic positioning is examined. The benchmark is the perspectives of the Strategy Map, so that economic goals are considered together with ecological and social aspects.

In the fourth step, suitable interventions and measures for achieving the goals are specified. They build on the examined positioning and the target picture.

The fifth step focuses on the process itself. Criteria are developed with which the process can be continuously reflected on and adjusted.

In the sixth step, accompanying impact monitoring is set up. It supports successful strategy implementation and answers the question of whether the measures lead to the picture of the future or whether course corrections are needed.

The last two steps distinguish the review from a one-off stocktaking. Reflection criteria and monitoring create a routine that makes deviations visible. It counteracts the self-confirmation that prompted the review.

A Strategy Map for sustainable organisational development serves as the frame of reference. It is based on Kaplan and McMillan (2020), who developed the Balanced Scorecard further, and organises the strategy in several perspectives.

At the top is the financial perspective with the business objective. It aims at profit in the sense of long-term economic success. Two strands contribute to this: profitability through cost savings and productivity gains, and growth with new and existing customers.

Below this is the values perspective with the value promise and self-image. At its centre is the purpose, with the questions of why the company does what it does, how it does it, what exactly it does and what its self-image is.

The purpose is flanked by two positionings. Planet denotes the ecological positioning, for example on the environment and climate. People denotes the socio-economic positioning, for example on society, human rights, diversity and ethics.

The stakeholder perspective contains the benefit promise. It considers external stakeholders such as politics and the state, partners and institutions, as well as markets and target customers. The value proposition of the product and service portfolio is described by six characteristics: time, quality, price, service, relationship, and brand and image.

The environmental perspective describes the framework conditions at the interface between organisation and environment. Influence on the ecological environment includes taking responsibility for climate protection, eco-efficiency and environmental protection. Influence on the socio-economic environment includes responsibility for fair working conditions, human rights, diversity and ethical conduct.

In between lies the environment-related framework. This means internal framework conditions, rules, codes of conduct and compliance that shape and guide business conduct.

The lower levels of the Strategy Map describe what supports the positioning. The process perspective comprises internal processes and collaboration in four groups.

The first group is service delivery and value creation. This includes the processes of procurement, service delivery and distribution, from supply chain management to the linear and circular economy. The second group is customer management with the processes of customer selection, acquisition and retention as well as expanding customer relationships.

The third group is innovation. It comprises the processes by which innovation potential is identified and products are developed and launched. The fourth group consists of legally required and social processes, which serve compliance with legal requirements and interaction with the social environment. Digitalisation and automation, i.e. IT-supported processes, cut across all four groups.

Below this are the prerequisites, the so-called enablers. People includes the recruitment, qualification or release of employees. Technologies and assets include the development, further development or reduction of IT systems and infrastructure.

Organisation includes organisational structures, hierarchy and decision-making routines. Culture and diversity include the leadership system, alignment and teamwork.

The basis of the map is formed by the socio-technical influencing factors that act on all levels: world view, economy, ecology, technology, politics and power, society, culture and health.

In the review, the map serves two purposes. It is the benchmark for examining the positioning, and it organises the impact of the strategic initiatives. This shows whether an initiative only contributes to profit or also affects Purpose, Planet and People.

The review is based on the findings of systemic organisation theory. According to this, the key starting points for observations and interventions are not primarily the people in an organisation. The starting points are the established observation and assessment grids and the characteristic communication routines with which information is generated and condensed into decisions.

The so-called third mode of consulting differs fundamentally from classic expert consulting. In addition to the factual dimension of content, the social and time dimensions are given equal consideration, synchronised and integrated from the outset.

In the factual dimension, a task-related problem of the organisation is worked on in order to secure or further develop its performance. In the social dimension, the quality of cooperation and the decision-making capability of the team and of the wider communication indirectly develop further.

In the time dimension, the course of events is observed and shaped. Over-steering and under-steering are avoided, and acceleration and deceleration in the decision-making process are balanced.

The approach takes into account the high dynamics and self-referentiality of organisations. It takes up the resistance that change meets and recognises that actors in organisations do not pursue only organisational goals.

For a strategy review, independence from individual industries is particularly important. It ensures impartiality and openness and prevents the blind spots of focused industry experts from being brought in. Cross-industry experience is applied to the specific context. This produces solutions that would not emerge from the industry perspective alone.

In the collaboration, all working sessions are facilitated and all results documented. Each session ends with minutes that everyone present accepts. Each setting is reflected on and evaluated and feeds into the preparation of the next.