Building Success: Understanding the Strategy Pyramid

Understanding the Strategy Pyramid

Building a successful business requires a clear strategy. One useful tool is the Strategy Pyramid. This model helps you visualize and organize your business goals and actions. How are purpose, strategy and execution connected?

90% of the companies fail to execute their strategy:

This is the concept shared by Wendy McGuiness (2011).

It summarizes the 9 key pillars of successful strategy and its execution, divided into 3 main categories: purpose, strategy and execution.

A) Purpose:

1. Mission:

Defines the fundamental purpose or reason for the existence of the corporation, answering questions like "Why do we exist?" and "What is our core reason for being in business?"

2. Values:

Sets out the guiding principles and beliefs that shape the corporate culture and decision-making processes, reflecting the organization's ethical standards and desired behaviors.

3. Vision:

Paints a clear picture of the desired future state of the company, providing direction and inspiration by answering the question "Where do we want to be in the future?"

B) Strategy:

4. Strategic Intent:

Outlines the overarching goals and objectives of the organization, defining the desired outcomes and the path to achieve them.

5. Drivers:

Identifies the key factors or strategic priorities that will drive the company's success, such as market expansion, product innovation, cost leadership, or customer experience.

6. Enablers:

Represents the resources, capabilities, and infrastructure needed to execute the strategy effectively, including technology, human capital, financial resources, etc.

C) Execution:

7. Targets and Initiatives:

Sets specific, measurable targets and initiatives aligned with the strategic objectives, providing actionable steps to move the organization forward.

8. Performance Indicators:

Establishes metrics and key performance indicators (KPIs) to track progress toward goals and assess the effectiveness of strategic initiatives.

9. Strategy Map:

Communicates the corporate strategy in a clear manner and ensures alignment across the organization.

These categories provide a framework for corporate leaders to:

1) Articulate the purpose of the organization, 
2) Develop a clear strategy to achieve its goals,
3) Execute it effectively

Make sure you address all the points As they are equally important.

The Strategy Pyramid has three levels. Each level plays a key role in achieving your overall objectives. Let's explore each level in detail.

the long-term goal of your business. It defines where you want to be in the future. A clear vision guides your decisions and keeps your team focused.

To create a strong vision, ask yourself questions like, "What do we want to achieve in the next five years?" and "What impact do we want to make?" Write down your answers and share them with your team.

Level 2: Strategy

The middle level of the pyramid is your strategy. This is how you plan to achieve your vision. Your strategy should include specific goals and actions. It should be flexible enough to adapt to changes in the market.

When developing your strategy, consider your strengths and weaknesses. Identify opportunities and threats in your industry. Use this information to create a plan that leverages your strengths and addresses your weaknesses. These are the day-to-day actions that support your strategy. Tactics are detailed and specific. They include tasks like marketing campaigns, sales initiatives, and customer service improvements.

Effective tactics require clear communication and coordination. Make sure everyone on your team understands their role and responsibilities. Regularly review your tactics to ensure they are aligned with your strategy.

Putting It All Together

When all three levels of the Strategy Pyramid are aligned, your business is more likely to succeed. Your vision provides direction. Your strategy outlines the path. Your tactics ensure you take the right steps.

Develop tactics that bring your strategy to life. Regularly review and adjust each level to stay on track.

By understanding and using the Strategy Pyramid, you can build a strong foundation for your business. This approach helps you stay focused, organized, and prepared for the future.

Remember, success doesn't happen overnight. It takes time, effort, and a clear strategy. Use the Strategy Pyramid to guide your actions and achieve your business goals.