One of the primary jobs of every board of directors is to demonstrate sound corporate governance for the organization and its stakeholders. The clearest example of a board’s governance model lies in its corporate strategy.
Corporate strategies serve as the primary source of a company’s overall vision and create the foundation for executive decision-making. Understanding how to define and execute a corporate strategy is key to growing your business while maintaining financial stability.
Read on to learn more about corporate strategies, the key steps to build an effective strategy, and also discover how board management software enhances corporate governance.
What is a Corporate Strategy?
A corporate strategy is a comprehensive plan that outlines how a company will achieve its long-term goals and objectives. It serves as the foundational blueprint for a company’s executive leadership and board of directors. Key elements of an effective corporate strategy include:
- Vision and mission statement
- Growth strategies
- Competitive strategies
- Resource allocation
- Risk management
Typically the managing director determines the corporate strategy, but the presence of a parent company can also influence decision-making. Each organization has its own needs and specificities, but corporate strategies can generally be classed into these 4 groups:
- Growth: A growth strategy aims to create increases in specific areas, such as sales, revenue market share, followers, or penetration.
- Stability: Stability strategies are focused on maintaining the company’s current level of success and status in the market. This is done by investing more resources into areas where the organization has a track record of high performance.
- Retrenchment: Retrenchment strategies are the complete opposite of growth or stability strategies. With this mentality, the organization looks for ways to flip the negative aspects of their business by making aggressive changes to their operations.
- Reinvention: If a company employs a reinvention strategy, it means they’re willing to redesign facets of their business that are fading in relevance or utility. This can result in the use of new technologies or the creation of new products.
The comprehensive blueprint for selecting a results-driven board management vendor.
Steps to Build an Effective Corporate Strategy
1. Define the Vision and Mission
The first step in developing a corporate strategy is to outline the overarching vision for the company. A clear definition of your purpose and values makes it easier to craft a strategic plan that aligns with your vision and needs.
To maximize the effectiveness of a purpose statement, remember to keep it as concise as possible. It should be simple enough for anyone who reads it to remember, while also articulating what your organization stands for. You can also share drafts of the statement with other executives or stakeholders to receive feedback and make any necessary edits.
2. Perform SWOT Analysis
SWOT stands for strengths, weaknesses, opportunities, and threats. Conducting a SWOT analysis helps senior management identify the organization’s current position in the market and explore ways to improve its reputation with processes based on internal and external data.
A SWOT analysis breaks down problems into more manageable tasks without the need for singular training programs or external consultants. It’s a multifaceted process that generally features the following steps:
- Gather resources to understand the scope and reliability of your data sets before choosing the right personnel for those areas.
- Identify the internal factors that represent strengths or weaknesses of the organization.
- Identify the external influences that could lead to new business opportunities (emerging market trends or underserved demographics) or threats that could potentially impact your operations (strong competitors or new regulations).
3. Set Strategic Goals and Objectives
Another key element in a corporate strategy is the ability to set achievable goals and objectives. Objectives provide an organization with a useful north star to guide their actions, giving management and employees a straightforward way to measure success.
When setting goals, it’s important to make them as specific and tangible as possible so you can track your progress over time. Your objectives should also be in concert with your annual operating plan, which explains the resource requirements and logistical parameters of each major business activity.
4. Formulate the Strategy
Now that you have a full awareness of your organization’s assets and improvement areas, and you know what you strive to achieve, senior management can develop a strategy to help you meet those expressed goals. Create an action plan to outline the steps each department needs to take to be successful. Alongside these plans should be a timeline that defines when certain tasks should be completed and an understanding of how organizational resources will be deployed to support the strategy.
5. Monitor, Evaluate, Adapt, and Refine
Once you have a strategy in mind, it’s time to implement the plans and monitor your progress. It’s one thing to have a sound corporate strategy on paper; it’s another thing to put it into practice. No industry remains static for long and you can never fully predict the response to any new initiative. Strategic oversight is needed to ensure the plan delivers results and adjustments can be made in real-time if needed.
When evaluating your corporate strategy, here are some concepts to keep in mind:
- Consistency: Consistent processes enable a more reliable strategic process and can help board members identify systematic errors. If you find inconsistencies in any stage of the plan, make revisions to your corporate strategy.
- Use of resources: Be sure to check if all your resources are being used to increase growth and make adjustments if necessary.
- Risk management: Every corporate strategy comes with some level of risk. Part of the evaluation includes determining if the organization is comfortable with the amount of risks associated with the strategy.
- Timeline check-ins: Consider if your timeline remains appropriate for your current progress. Some deadlines may need to be cut short or extended.
- Plan assessment: At the end of the day, the strategy has to lead to the expected benefits. Assess the efficiency of your plan and be prepared to pivot if needed.
OnBoard Powers Corporate Boards
Your corporate strategy plays a crucial role in corporate governance. From the conception phase to the time of oversight and evaluation, board members need the tools to perform their roles in the management structure.
Board portal software, such as OnBoard, helps the boards of corporations, nonprofits, banks, local governments, and schools get the most out of their meetings so they can successfully execute their corporate strategy.
Features such as the agenda builder, meeting analytics, board assessments, and a secure messaging system help board members deliver and acquire necessary information, hold each other accountable, and meet organizational goals.
Ready to learn more? Download our free Board Meeting Minutes Template to see how OnBoard streamlines board governance.
Efficiently track and document board decisions with our Meeting Minutes Template
About The Author
- Adam Wire is a Content Marketing Manager at OnBoard who joined the company in 2021. A Ball State University graduate, Adam worked in various content marketing roles at Angi, USA Football, and Adult & Child Health following a 12-year career in newspapers. His favorite part of the job is problem-solving and helping teammates achieve their goals. He lives in Indianapolis with his wife and two dogs. He’s an avid sports fan and foodie who also enjoys lawn and yard work and running.
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