Strategic Principle Framework (PowerPoint PPT)

Strategic principles allow organizations to make decentralized decisions while maintaining cohesive strategic action. This document explains the strategic principle framework, including examples, defining attributes, relevant crucial situations, and an approach to strategic principle development.

This document is based on the HBR article, "Transforming Corner-Office Strategy into Frontline Action," co-authored by Orit Gadiesh and James Gilbert. This article is on the list of "HBR's Must-Reads on Strategy."

Intro to the article:
Southwest Airlines keeps soaring. Its stock price rose a compounded 21,000% between 1972 and 1992 and leapt 300% between 1995 and 2000.

Why does Southwest succeed while so many other airlines fail? Because it sticks to its powerful strategic principle: "Meet customers' short-haul travel needs at fares competitive with the cost of automobile travel." This pithy, memorable, action-oriented phrase distills Southwest's unique strategy and communicates it throughout the company.

An effective strategic principle lets a company simultaneously:
*maintain strategic focus,
*empower workers to innovate and take risks,
*seize fleeting opportunities,
*create products and services that meet subtle shifts in customers' needs.

In today's rapidly changing world, companies must integrate decentralized decision making with coherent, strategic action. A well-crafted, skillfully implemented strategic principle lets them strike that delicate balance.

The framework outlined in this document is designed to help organizations navigate crucial situations such as decentralization, rapid growth, technological change, and institutional turmoil. It emphasizes the importance of a strategic principle in maintaining consistency and coherence across the organization, even in the face of uncertainty and rapid change. By distilling strategy into a clear, actionable principle, companies can ensure that all levels of the organization are aligned and capable of making decisions that support the overall strategic direction. This approach not only enhances strategic focus, but also empowers employees to act decisively and innovatively.