A Strategic Principle

There is a lot of confusion in many large companies about the exact strategy that the company intends to pursue. This confusion is not just at the lower level employees but even managers and higher level employees. In fact higher level employees sometimes misunderstand the corporate strategy. This results in a wrong set of ideas trickling down to the greater employee base.

One of the most difficult things about strategy is communicating it effectively. Many great companies have done it in the past , but there is no one way of achieving it.

A strategic principle is one of the ways in which this can be done. It is because a strategic principle is something that is executable and makes sense for the employees who are involved in making decisions every day. I was reading a wonderful HBR study http://hbr.org/2001/05/transforming-corner-office-strategy-into-frontline-action/ar/1 which explains this concept in detail.

Very briefly ,

A Strategic Principle is a memorable and actionable phrase, easy to remember and execute. “ Execute” is the key word which is the main theme of this HBR article. A Strategic principle must help the employees to execute

- - When he has to make trade offs (especially with resource constraints)

- - To test how good a particular action or decision is.

- - - It also helps to decide what not to do, like setting boundary conditions

 

[Simran Rai]

In large organizations, the disconnect between top-level strategic intent and day-to-day employee actions often stems from poor communication and lack of clarity. This confusion is not limited to junior staff but extends even to senior managers, who sometimes misinterpret the corporate strategy and pass on flawed interpretations, further compounding the problem. One effective solution to this challenge is the use of a Strategic Principle—a concise, memorable, and actionable phrase that guides decision-making across all levels of the organization. As highlighted in the HBR article, the focus must be on execution. A good strategic principle serves as a touchstone for employees when making trade-offs, especially under constraints, and offers a way to evaluate the appropriateness of their actions. It also clearly defines boundaries, helping employees know what not to do, thus preventing wasted effort and misaligned initiatives. By translating broad strategy into a specific guiding idea, companies can ensure alignment between the executive vision and frontline actions, reducing ambiguity and fostering a culture of consistent execution. Ultimately, this approach helps embed strategy into the fabric of everyday decision-making, making it a living, breathing force rather than a static document few understand.​