One of the most important roles of an organization’s strategy is achieving consistency: consistency between all of the resources in the firm; consistency with the demands and expectations of the environment; and dynamic consistency, with decisions reinforcing one another over time. This article explores the various forms of consistency and how strategy can help ensure the various forms of strategic consistency.
Different forms of consistency
The first form of consistency is internal consistency – alignment between all of the various resources and capabilities internal to the firm. If decisions made within different parts of the firms are aligned with one another, each will reinforce the other. The benefits of decisions made within one part of the firm are amplified because of consistent decisions made in a different part of the firm.
External consistency refers to the fit between the actions that the firm is taking and the organizational environment, specifically the demands and expectations of the market. An understanding of the market that the firm operates in, and formalized into the strategy of the firm, can help ensure that the firm’s offerings match what is expected and demanded by customers.
The final form of consistency is dynamic consistency – the fact that different decisions made within the firm reinforce one another over time. This is an important role of strategy because building the underlying capabilities of the firm relies on actions that reinforce each other over time.
The long-term nature of a company’s strategy helps ensure this form of consistency – aligning decisions over time so that subsequent decisions build on the success of earlier choices.
The role of strategy in achieving the various forms of consistency
A company’s strategy is an important component in ensuring internal, external, and dynamic consistency. It helps set the direction of the firm, aligning the various parts of the business (internal consistency), ensuring that the products actually meet market expectations (external consistency), and that various decisions reinforce each other over time (dynamic consistency).
Important components to achieving consistency
While having a strategy is part of the process of ensuring the various forms of consistency, having a strategy in itself is not enough. It is important the strategy is known and shared within the organizations, with employees buy-in into the approach.
Awareness of the strategy
One component of achieving consistency is ensuring that the strategy is communicated so that employees throughout the organization are aware of the strategy. While upper management may sometimes believe that only they need to know the strategy, it is difficult if not impossible for lower managers to make independent decisions with the strategy unless they understand the approach being taken. Without awareness, it is very difficult for independent decisions to align and reinforce one another.
As well as ensuring that the strategy is shared throughout the firm, it is also important that there is some buy-in from management and employees. Strategic buy-in helps ensure that the various decisions are actually implemented. If employees don’t agree with the strategy or believe that the firm should be prioritizing other areas, it is much more likely that the actions that they take will start to deviate from the strategy.