How Strategic Principles Drive Action

The 80-100 rule: you're better off with a strategy that is 80% right and 100% implemented than one that is 100% right but doesn't drive consistent action throughout the company. (HBR, May 2001)

 
 

This is the first in an exclusive CreditUnions.com 5-part series on implementing strategy. Over the next few weeks we will explore different theories of execution, culminating in an interactive, live seminar on November 7 th where credit unions will be sharing their approach and results. Follow this series on CreditUnions.com and in our biweekly CEO Strategy e-newsletter (update your registration here to include this e-alert category).

In a Harvard Business Review article in May 2001, authors Orit Gadiesh and James Gilbert presented their views on implementation titled, Transforming Corner-Office Strategy into Frontline Action. In this they advocate the crafting of a 'strategic principle' to guide everyone's actions, from the tellers on the frontline to the executives in the corner office.

They describe a strategic principle as "a memorable and actionable phrase that distills a company's corporate strategy into its unique essence and communicates it throughout the organization." Acknowledging that this idea may sound like another name for a mission statement, they present two key points of differentiation:

Strategic Principle

Mission Statement

Drives a company's strategy

Informs a company's culture

Is action-oriented

Is meant to inspire

 

 

Two of our industry's consistently high-performing credit unions illustrate this principle.

Orange County Teachers FCU, led by CEO Rudy Hanley for over twenty years, has focused on building trusted member relationships as their dominant strategic theme. Sometimes this can mean doing the right thing, even if it costs money, to ensure that the members maintain their confidence that the credit union will always act in their interest.

Pentagon Federal Credit Union's strategic principle is different. Pentagon sees financial competition as a form of market “warfare.” Many financial transactions in this view are a commodity with the consumer choosing the best priced product. To win at this competition requires a low cost organization that can deliver superior economic value consistently.

Both credit unions are superior performers yet they follow two very different principals in creating their specific strategy. Each believes in member value; however the way they translate that common belief to every decision-maker in the organization is radically different. Both are successful, yet unique, in how this success is achieved.

 

 

 

Oct. 15, 2007


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