Assessing the different dimensions of strategic consistency
There are multiple dimensions of consistency in strategy:
- Internal consistency: This relates to the alignment between the resources internally within the firm.
- External consistency: This relates to how well the firm is aligned with the external market
- Dynamic consistency: This refers to how consistent the strategy is over time – whether decisions are building on one another.
When assessing strategic consistency, it is useful to consider each component separately – evaluating whether i) the firm’s resources are aligned with one another, ii) whether the firm is aligned with the external environment, and iii) how consistent the strategy is over time.
Assessing your internal strategic consistency
Assessing the internal consistency relates to whether the firm’s internal resources are aligned with one another. If the various components of the firm are integrated well with one another, then decisions made in one area are likely to reinforce decisions made in a different part of the business.
If on the other hand there is not an overarching strategy, different parts of the firm are likely to operate in silos, that potentially make different or inconsistent decisions. The firm may be pulling in different directions, potentially leading to inefficiencies or even an inconsistent external identity.
When assessing internal consistency, it can be useful to examine each of the individual resources and determine how aligned it is with the overall strategy of the firm. Consider how well supported the resource is with other resources and the actions that the firm is taking.
Assessing your external strategic consistency
Assessing the external consistency relates to how well aligned the firm is with the external environment. This can include assessing the fit with industry structure, the macro0-environment, and new opportunities available.
When considering external fit, it is useful to pay particular attention to things that have changed in the external environment. A lack of fit may arise because the external environment change changed, potentially without according adjustments being made to how the firm operates.
Assessing your dynamic strategic consistency
The final dimension of strategic consistency to assess is the dynamic element – how aligned the various decisions made by the company are over time. The best firms have a relatively consistent strategy – potentially adapting based on changes to the external environment – but largely with decisions building on one another.
To assess dynamic consistency, take a step back, and review the actions that the firm has taken over time. Are the decisions that have been made in the recent time in keeping with decisions of the past, or have there been major changes that are inconsistent with, or have undermined a prior position.
Adapting your strategy to increase strategic consistency
Once you have made an assessment of the current state of the various components, you can begin to consider opportunities for increasing the various dimensions of strategic consistency.
- Increasing internal consistency: Consider if there are opportunities to better align any resources or areas that are inconsistent with one another. This may involve developing and communicating a strategy within the firm, helping to ensure that various decisions are aligned with one another.
- Increasing external consistency: Increasing external consistency may involve adapting the products to better meet the demands of the external market.
- Increasing dynamic consistency: Examine how the firm has changed over the years, and reflect on whether there has been an overarching strategy that has held over time. If the company has significantly changed – potentially inconsistently, bear this in mind with subsequent strategic actions, while trying to make future actions consistent with an overarching plan for the firm.