Who Owns the Corporate Strategy?

It's a bit tricky to say definitively who "owns" the company strategy, mostly because strategy means different things to different people. In fact, strategy includes so many concepts that need to be unpacked. Many groups in the company have a strategy: Sales has a Go-To-Market (GTM) strategy, Marketing has a Media Strategy, the CEO has a Corporate Strategy, Product has a Roadmap Strategy ... and so on. All of them have a strategy, but each needs to qualify what strategy. In this article, I will refer to Company Strategy as Strategy. With that in mind, let me unpack who does what.

Board of Directors Role with Company Strategy (Very Long-Term Vision)

The board of directors, representing the shareholders, has the ultimate responsibility for the company's long-term success. They set the overall vision and direction for the company by defining the intentional goals and approving the overall Company strategy. They also oversee the execution of the strategy, monitoring progress and holding the executive team accountable for its implementation. The board focuses on the fundamental purpose and reason for the company's existence, answering the question "Why do we exist?" This involves setting the values, beliefs, and core principles that guide the company's actions. The timeframe for these considerations is long-term and enduring, rarely changing. For example, a company might have a vision "To provide affordable healthcare to all."

Executive Team Role with Company Strategy (Medium to Long-Term Mission)

The executive team, led by the CEO, is responsible for translating the board's vision into a concrete plan. This involves developing the detailed strategy by defining specific objectives, identifying key initiatives, and allocating resources. The executive team leads the implementation of the strategy, driving its execution and motivating employees to achieve the desired outcomes. Their focus is on creating a plan outlining how the company will achieve its mission and goals, answering the question "How will we achieve our goals?" This involves specific actions, initiatives, and resource allocation aimed at achieving the desired outcomes. The timeframe for these activities is medium to long-term, and the plan must be adaptable to changing circumstances. For instance, an executive team might set a mission "To expand our network of clinics in underserved areas and develop innovative telehealth solutions."

The Other Key Players Role with Company Strategy (Short-Term to Medium)

Department heads and employees also play crucial roles in the company's strategy. Heads of various departments, such as marketing, finance, and operations, contribute their expertise and develop departmental strategies aligned with the overall company strategy. All employees play a role in executing the strategy, contributing their skills and efforts to achieve the company's goals. The success of the strategy depends on the collective effort and commitment of all levels of the organization. The timeframe for these activities is short-term to medium, and the plan must be adaptable to changing circumstances.

Taxonomy Differences between the Mission and Vision

It is helpful to think of the Long-Term Mission as the "why" behind the company's existence, while the Short-Term Mission (or Company Strategy) is the "how" the company will achieve its mission. For example, a company might have a mission "To empower people through technology," and a strategy "To develop user-friendly software that simplifies complex tasks and enhances productivity." In summary, the mission defines the company's purpose and values, while the strategy outlines the plan for achieving that purpose. They work together to guide the company's direction and success.

Key Interactions between the Different Groups

There isn't one single term that perfectly captures what the board of directors "owns" beyond the company strategy and mission. However, several terms and concepts come close. Corporate Governance is the broadest term, encompassing the overall framework of rules, practices, and processes that guide the company's operations. The board of directors is responsible for ensuring good corporate governance, which includes setting the strategic direction and overseeing the company's ethical and legal compliance. Strategic Oversight specifically refers to the board's role in monitoring and guiding the company's strategic direction. They ensure that the executive team is implementing the strategy effectively and making adjustments as needed. While the mission statement might focus on the company's purpose and values, the board often sets a broader Long-Term Vision for the company's future, encompassing aspects like market leadership, technological innovation, or social impact. Ultimately, the board is responsible for representing the interests of the shareholders, ensuring that the company's strategy aligns with maximizing shareholder value, which can include factors like profitability, growth, and sustainability.

In essence, the board of directors "owns" the framework, the oversight, and the ultimate responsibility for ensuring that the company's strategy and mission are aligned with its long-term vision and shareholder value. These terms are not mutually exclusive and collectively contribute to the board's overall role in guiding the company's success.

In Conclusion

The Board sets the overarching direction and oversees the strategy. The Executive Team develops and implements the detailed strategy. While the Board back and monitor the strategy created by the Executive team, all levels of the organization contribute to the success of the strategy. It is important to remember that a successful strategy is a collaborative effort, requiring input and commitment from all stakeholders.

What do you think?