In 1991 Kaplan and Norton wrote the highly influential book called “The Strategy Focused Organization”. One of the first things they address is the key principles a company must hold in order to create a break through strategy that drives profitable growth. There are five principles overall, today I will write about the first two.

Principle one: Translate the Strategy to Operational Terms
Successful businesses understand that your operations define your strategy. In order to execute your strategy a company must understand how you must change your operations in order to support it. Many companies make the mistake thinking strategy stops at defining your market position. A company wants to add an offering so they change their collateral and website, tell their sales people to sell it and poof, they are done. Who are the targeted buyers? Can the sales force sell this type of offering? How do you deliver the offering? What are the key performance indicators? These are some of the operational questions that provide important insight on the feasibility of the strategy and what capabilities are required in order to successfully execute.

Principle Two: Align the Organization
How does a company effectively leverage its strengths? Identifying and exploiting key synergies. Every company has strengths they can vary from a loyal client base to an effective recruiting model. A well defined strategy leverages those resources in a unique and effective way to bring added value to the market, and execute more effectively. Synergy is the key to leveraging organizational strengths, linking different capabilities to one another. Doing so effectively makes an organization greater than the sum of its parts providing a substantial competitive advantage.