Strategic Fit: More than Numbers and Spreadsheets
A compelling Harvard Business Review article on strategic fit caught my eye recently. As a CEO, I was constantly thinking about strategic fit. Now as an executive coach, it comes up in conversations with my clients all the time.
In short, strategic fit means going beyond the spreadsheets and the financial figures. It’s alignment, cohesion, and synergy across all functions of a business. Don’t get me wrong – measuring business success certainly requires being mindful of the numbers. But maximizing the value of your company for the benefit of all stakeholders, as the authors of the aforementioned HBR article argue, is the right objective, and requires more than “spreadsheet strategies.”
The authors (Darrell Rigby and Zach First) identify seven essential elements of strategy – the starting point in the process of achieving strategic fit – that, as they say, should be developed concurrently and iteratively.
The Mental Model
Purpose and ambitions
Stakeholder value creation
Macro forces
Markets and products
Competitive advantages
The operating model
I encourage you to read about each of these elements, because Rigby and First deliver a smart and relevant argument based on the example of a highly successful brand, but I wanted to share a few thoughts on the final one.
The authors call the operating model “the organizational engine that unleashes the power of people and fuels value creation.” Here’s how I feel: who are you as the leader of a company if you aren’t an absolute champion of your company’s culture and mission? CEOs must live the culture and mission every day – talk the talk and walk the walk.
When there is a leadership transition – when a new CEO is onboarding, or when two companies merge and hire an outsider as CEO, for example – it’s a real stress test on the operating model. It’s intensive to execute a transition in a way that maintains alignment across the whole company. When executed properly, it leads to the farthest-reaching and longest-lasting results.
If you haven’t yet, I hope you’ll take a step back and consider strategic fit. And if I can help you unleash the power of strategic fit on your company, I’d love to start a conversation.
