Differentiating Strategy Logic

There exist at least two types of strategy logic

  • Strategy Pyramid, the traditional top-down strategy development approach that many companies use, going from vision to mission, from mission to goals and from goals to strategy. The Strategy Pyramid is very effective in stable contexts and motivates re-use
  • Strategy Stretch, a hybrid logic combining top-down and bottom-up strategy development. This logic is highly effective where innovations need to be built or where uncertainties need to be managed. It introduces new capabilities that might be re-used later using the Strategy Pyramid logic if the new capabilities aren’t temporal

If we look at the value chain types (as described in post An IT Value Chain must be decomposed to match different Innovation Goals) it seems as if a good match can be made between the value chain types and the strategy logic variants. The following table shows the mapping.

 

 

Strategy Logic

IT Value Chain archetypes

Strategy Pyramid

Strategy Stretch

Commodity IT

Good match

Poor match

Adaptive IT

Poor match

Good match

 

So from the above table we can see that when developing a commodity IT value chain, the strategy logic that seems to fit best to such a chain is the traditional strategy pyramid. This makes sense because the value chain is focused on delivering stable, repeatable (long-lasting?) services which in turn deserves a solid strategic development that is focused on effectiveness in stable contexts.

To support the development of an  adaptive IT value chain, type strategy stretch logic seems to fit well to this type of chain. This is mainly because the strategy stretch logic looks at opportunities and new capabilities and is focused on delivering new (innovative) services. The context in which this takes place usually has no time for long duration, top-down strategy developments so it seems fair to use strategy stretch here instead. 

In a next post, I will dive into the relationship between IT Value Chain archetypes, Strategy Logic (this post) and how these relate to ambidextrousity of an IT organisation.

Comments on: "Differentiating Strategy Logic" (2)

  1. […] This vision leads to the notion that traditional Business-IT alignment strategies might not be optimally suited to support decomposed IT value chains. This is however still a hypotheses which  needs further research. In a next post I will investigate which strategy logic is best suited for either IT Value Chain: Strategy Pyramid vs Strategy Stretch. […]

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  2. […] be more easily matched to strategy development processes as described in one of the previous posts Differentiating Strategy Logic It can also be matched easily to separating IT value chains to match specific innovation goals. In […]

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