September 30, 2011

Thoughts on World Class Organisation – Strategic Fit

Today I would like to share my views on the importance of "strategic fit" for the world class organisations. This discussion is in the context that to just have "operational excellence" is never enough to become or qualify for a world class organisation.

Strategic Fit

No world class organization can achieve sustainable success by relying on operation performance alone; there is a need to develop and execute strategies that connect internal resources to the external environment whilst representing stakeholders’ interests. Strategic correctness and excellence should thus constitute a distinct category of measures that shape business excellence. Whilst many excellence models emphasize the measures of strategic process, we contend that a brilliant strategic process does not necessarily result in strategic excellence. It is also the correctness of the contents of the business strategy that make or break the success. An apparent shortcoming in the reviewed literature show that many of the models examined do not give sufficient emphasis to strategic excellence, and even less so to the critical aspect of strategic fit.

Strategic fit reflects the strategic school of business excellence. During the 1990s and early 2000s, management communities began to realize the growing imperative of strategic fit over and above other critical measures. The premise of the concept is that the coherence between operational performance and overall business strategy takes a higher priority than the isolated operational performance itself. One must ensure the business is doing the right things first before making sure it does the things right. Thus, mission, vision and value became the pre-condition for business success. Strategy is a mediating factor between stakeholders’ objectives and operational behaviour. In short, this school of thought contends that there can be neither excellent operations nor excellent performances unless they fit to the business’s top level strategies. Hence, we saw a growing discussion of strategic direction in defining and achieving business excellence during the 1990s by many leading thinkers including Peter Senge, Henry Mintzberg and Michael Porter.


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