DEVELOPING

ACTIONABLE
STRATEGY
A great strategy does not assure marketplace success unless it is
accompanied by a clear action plan which can be communicated and
implemented throughout the company. Andreas Birnik and Richard Moat
believe that it’s critical to have everyone involved in managing strategy
reading off the same page. Literally.
ow many businesses slip or fall even though
H
they had a great strategy? In other words,
how much business potential has been lost
because business leaders fail to convert a good
strategy into productive actions?
Our sense is that the number is embarrassingly
high. Developing a relevant and actionable strategy
is a key challenge for most management teams.
Success never comes easily, as most people running
a business know all too well. Instead, it is rather
common to hear managers talk about “paralysis
through analysis” – so much time spent developing
(or understanding) a new strategy that implementing
it is either an afterthought or the execution effort is
either sloppy, half-hearted, or off target. We’ve
heard managers attest to such business sins too
often to count. Comments of this nature indicate
that there is still scope for innovation in the strategy
field to provide frameworks and tools that can help
practitioners develop strategy that really matters to
their organizations. More than that, we feel that
what is most needed is a structured process
aimed at capturing key strategic insights and
condensing the business strategy into an
actionable one-page summary: if you will,
into a “strategy grid”.
Dedicated followers of fashion
Our creation of a strategy grid to help
managers execute their strategy
comes from real-life experience.
Our proposed approach is the
result of five years of
experimentation with a
range of different
strategy frameworks and tools, developed while
working for Orange subsidiaries of France Telecom
in Denmark, Romania and Sweden. During this
time, we were exposed to the fads and fashions of
strategy as a result of our own reading and
interaction with consultants and colleagues. As a
consequence, when involved in planning and
executing a strategy, we have used strengths-
weaknesses-opportunities-threats (SWOT) analysis
Best practice
to create a snapshot of our situation. We have also
held off-site workshops around scenario planning
to understand how our environment is evolving.
We have carefully analyzed our market positioning.
We have assessed our valuable resources and
capabilities. We have drawn up detailed
strategic plans to try to ensure linkages
between strategy formulation and
implementation. We have
created companywide
road shows to
communicate and
embed the strategy.
And we share all this
now because we want
you to know that we truly
have “been there” when it
comes to all the latest fads
in strategy development.
However, despite the use of
a variety of different strategy
approaches, we often found it
challenging to convert the
elegance of strategy formulation
into a relevant and actionable
set of initiatives and options.
Thus, while these strategy
exercises have been
intellectually stimulating,
we have often →
 → concluded strategy events somewhat dissatisfied.
We felt, as others surely did, that while we may
have experienced a great discussion about strategy,
it was (more often than not) alarmingly unclear what
anyone should do differently as a result of the day’s
thinking and what we should communicate to the
rest of the organization in terms of executing the
new strategy. After much thought, we concluded
that what was needed most is a bottom-up/top-down
strategy process reinforced by a strategy grid – all
designed to make strategy actionable.
Bottom-up/top-down
The strategy process we now recommend follows
two parallel tracks, which we call bottom-up and
top-down. These two different starting points for
analysis and strategy development provide an
opportunity to tease out important conclusions that
might otherwise have remained hidden from view.
Best practice
The bottom-up process takes its starting point in a
solid micro-level articulation of the current base case
for the business. We have found that while the budget
process usually achieves a shared understanding
regarding metrics (such as top line financial numbers
or key performance indicators), there is often a lack
of a clear overview around the key initiatives and
activities forming the base case. Given this, we have
found it useful to articulate the base case across
dimensions such as business scope, marketing, sales
Another good test of the quality of the grid is to ask how
valuable it would be if a key competitor were somehow to
obtain it.
and distribution, customer service and technology.
This essentially serves to provide an answer to the
question of what we currently perceive the business
to look like, across different areas, if we execute
according to current constraints, intentions and plans.
To develop this view of the base case, we use the
budget for the current year, our business plan for
the next four years and our operational programme
plan that lists all major approved initiatives across
the business. Examples of areas that we focus on
when articulating the base case include the product
and segment markets for which we will have
competitive propositions guided by needs-based
segmentation, the size and capillarity of our
distribution network, the coverage of our network
(outdoor and indoor), the brand metrics we are
likely to achieve with our current level of advertising
expenditure and the overall customer experience we
provide. We also focus on the customer service
30 Business Strategy Review Spring 2008 © 2008 The Author | Journal compilation © 2008 London Business School
levels we will deliver across our different segments,
the percentage of total revenues that we will
generate from new data services, convergence
opportunities and the overall potential for organic
growth compared to merger and acquisition
alternatives. We thus build up a high-level, but
fairly comprehensive, overview of the base case
that serves to align key stakeholders within the
company; this case can be used for discussions
with managers at headquarters.
Stress test
Having achieved this overview, the next step in the
process consists of stress-testing the base case by
identifying limitations and issues. To the greatest
extent possible, we try to structure limitations and
issues according to the same format as the base
case. After completion of these steps, we have found
that a number of key strategic imperatives typically
become evident. Based on this, we then seek to
identify “must have” initiatives as well as potential
strategic options that address the identified
limitations or issues with the base case.
Some of the “must have” areas to address in the
past have included the need to increase the
geographic reach and capillarity of our distribution
network; to increase both network capacity and
coverage in specific locations; to spend more on
advertising relative to competition; to diversify our
advertising agency resources to improve the
creativeness of our marketing communications; to
upgrade our billing system to be able to offer new
tariff plan structures; and to improve our CRM
systems to enable us to up-sell services to our
existing customer base. How useful is such a
process? We have seen it make a real difference. In
terms of new business opportunities, this process
has led us to realize that we have not had
competitive propositions in place to address some
fast-growing market segments, that we have been
missing out on new data and convergence product
areas, that we may have been too cautious in terms
of roll-out plans for wireless broadband solutions
and that we have not done enough to monetize our
substantial customer base through partnership
opportunities for cross-selling.
Overall, the benefit of the bottom-up process is
that it creates a shared understanding around the
base case in terms of what we must do versus what
 Bottom-up process Top-down process

Base case Assumptions and drivers

Articulate current Identify fundamental
base case and identify assumptions and driving
limitations forces

Base case imperatives Initiatives and Options Top down imperatives

Identify strategic Outline base case Identify strategic
imperatives based on initiatives for imperatives based on
base case implementation and assumptions and driving
strategic options for forces
evaluation

Disruptions
Identify and track
potentially disruptive forces
and other risks

Best practice
Figure 1. The top-down / bottom-up strategy process

we might do. The advantage of this process is that
we typically get highly actionable initiatives and
options as output. The drawback is that the clear
focus around the base case might trigger a form of
strategic myopia with too much focus on short-term,
operational issues. To remedy the risk of becoming
myopic, we also conduct a top-down process.
The top-down process starts at the other end of the
micro-macro continuum by trying to tease out the
fundamental assumptions about the business
environment in order to provide a foundation for the
strategy. This part of the process is drawn from
some prior experience with Shell’s famed scenario
planning model. It thus seeks to isolate certain
factors called “TINA” (There Is No Alternative).
TINA could include factors relating to
demographic evolution, economic growth,
competitive intensity, level of industry regulation
and entry into trade blocs such as the European
Union. We don’t mean that these factors may never
change, simply that it is unlikely that a different
trajectory will emerge before the end of the current
strategy horizon. In a turbulent and rapidly
changing world, we have found that it provides an
element of comfort to seek to anchor – and track –
the strategy in a set of fundamental assumptions. In
our case, such fundamental assumptions required
us to check and verify such factors as the declining
overall population size, the entry of Eastern
European countries into the European Union, shift
from double-digit to single-digit growth rates as
mobile markets mature, increased competition due
to the introduction of new telecoms licenses or
virtual operators and increased customer churn due
to the introduction of number portability.
Following from this alignment around
fundamental assumptions, we then focus on the key
forces affecting both our core business and shaping
adjacent or emerging business areas. We structure
this into columns spelling out the driving forces, the
implications and the strategic imperatives. In the
telecom industry in which we worked, we discovered
the need to shift from a heavy focus on customer
acquisition towards retention and up-selling as
markets mature. Increased maturity of telecoms
markets also inevitably leads to commoditization of
basic services with downward pressures on price
and thus an imperative to focus on cost control.
To escape from the “commodity trap”, there was
also a need to explore new emerging business
opportunities for data and converged services. This
required new capabilities beyond basic voice and
messaging services and the ability to better segment
both the overall market and existing customers based
on an in-depth understanding of customer needs.
The top-down process is also especially useful to
identify the emergence of new disruptive technologies
and to explore opportunities for acquisitions.
Similar to the bottom-up process, this top-down
process thus typically yields some initiatives that we
should take and a set of strategic options worth
further consideration.
A broad look
After having completed the first iteration of both
the bottom-up and top-down processes, we take a
broad look at potential disruptions that might affect
the business and articulate those so that they can
be further evaluated and tracked. We do this
without specific consideration to bottom-up or top-
down thinking. This could include one of our →

© 2008 The Author | Journal compilation © 2008 London Business School Business Strategy Review Spring 2008 31
 → local competitors being acquired by a major
international player, new licences being issued or
further regulation on a national or European level.
At this stage in the process, we have found it
beneficial to take stock of where we are and try to
get an overview of the insights we have reached so
far. We have found it quite useful to dust off and
use SWOT analysis as a tool to provide a helicopter
view and summary. Rather than being a mechanistic
ritual, we have found that conducting a SWOT
analysis takes on a deeper significance after we have
been through both the bottom-up and top-down
processes. The next step in the process consists of
trying to visualize the actions and options emerging
from the strategy process.
The strategy grid
The strategy grid is a framework that can be used to
summarize key initiatives and potential strategic
Best practice
moves emerging from the strategy process. While we
find it useful to follow the bottom-up and top-down
processes, the strategy grid can be used to
summarize the output of strategies developed
through other processes as well.
The X-axis of the strategy grid is based on the
insight (popularized by James March of Stanford
University) that a business needs to strike an
appropriate balance between exploiting the
potential of its core business and exploring new
business opportunities. We have further subdivided
the latter into the pursuit of adjacent opportunities
that serve to extend the core business versus more
exploratory entry of new business areas.
The Y-axis seeks to make clear what future
actions and objectives are included in the base case
versus potential strategic moves that need to be
assessed further. We have found it useful to divide
the potential strategic moves into organic growth,
alliances and partnerships along with mergers and
acquisitions.
To complete the strategy grid, we go back to the
findings generated from the bottom-up and top-
down strategy processes. Apart from minor
discussions regarding in which box a particular
action or strategic move belongs, we have found it
quite easy to insert key findings into relevant cells
of the grid. We have also noted that a very clear
separation between strategy and objectives is not
always very helpful. Based on our experience, we
think it is fair to have a mix of objectives and
actions (though we stay clear of purely financial
targets in the strategy grid and instead focus on
business drivers).
The beauty of the grid is that it summarizes key
objectives, actions and strategic options coming out of
the process and separates those into what is already
included in the base case versus potential strategic
moves. The framework also provides an overview
32 Business Strategy Review Spring 2008 © 2008 The Author | Journal compilation © 2008 London Business School
regarding the relative balance between actions
seeking to exploit or improve the core business
versus initiatives of a more exploratory nature.
Once the grid is complete, the single-page overview
is useful to facilitate discussions of where these
initiatives would take the company in terms of its
market position; it also assists in developing valuable
resources or capabilities toward the desired direction
of the company. After using the grid several times,
we have learned to challenge ourselves regarding
whether or not we have managed to achieve the right
balance between exploitation and exploration. We
have found that we typically tend to place too much
emphasis on the bottom-left corner in the model,
which represents exploitation and improvement of
the familiar terrain of our core business.
Thus, while we may find too little space (for our
sense of what needs to be emphasized) in the
bottom-left corner, we have noted that, too often,
other boxes on the strategy grid might be empty or
only sparingly addressed. In short, we have learned
to correct our own misuse of the grid. From that
insight, we iterate our strategy process until we feel
that we have managed to achieve an appropriate
balance in our strategy as depicted in the grid.
The action imperative
In addition to striving for balance, we also try to
ensure that the initiatives are actionable. We have
found that the best way to do that is to develop a
high-level programme plan in parallel with
milestones for each initiative. If an initiative or
target is phrased in such a way that it is difficult to
put a milestone against it, we change the
formulation into something that is more actionable.
Another good test of the quality of the grid is to
ask how valuable it would be if a key competitor were
somehow to obtain it. Discussing this far-fetched
“what if” tells all involved whether the grid is indeed
something that indicates solid, competitive actions.
Asking this question can lead to the sharpening of
the key initiatives underpinning the strategy.
Initiatives on the strategy grid can also be colour-
coded into clusters that would take the business in
a specific direction. This can be used to distinguish
between different evolutionary paths for the business.
As an example, we have often distinguished
between strategic options targeting new market
segments or entering new product markets.
Once the strategy grid has been developed, it
should remain a living emblem of the strategy and
thus be continuously updated. This means that the
grid can be used as a framework to discuss the fit of
new incremental initiatives and options that emerge
outside of the formal strategy process. The grid can
also be used together with scenario planning to test
how well the company will fly under different future
environments.
 Exploitation of Core Business Opportunities Exploration of New Business Opportunities
and Business Improvement Initiatives
Extension of Core Enter New Areas

Mergers and
Acquisitions
● Consolidate market by acquiring company X or Y ● Acquire company in ● Acquire company
● Extend geographic footprint by acquiring competitor X adjacent and fast with strong R&D
● Acquire distribution chain for product line X growing industry X capabilities in area X

● Find systems integration partner for product line X

Partnerships
Alliances/ ● Enter into partnership ● Partner with company in
● Find distribution partner for product line X in market Y with company X for industry X to leverage
● Partner with insurance company to provide extended cross-selling of product our distribution and
warranty option X with product Y marketing capabilities

● Rollout additional shops in areas X and Y to improve ● Launch new product ● Invest in R&D for
sales capillarity line X area X
Organic
Growth

● Launch next generation product line X based on new ● Introduce lifestyle

technology Y accessories for product
● Increase share of wallet for product line X line X

● Generate at least x% of revenues from product line X ● Launch new product ● Develop offer for

Best practice
● Streamline operations by outsourcing area X line based on annual segment X previously
● Implement new segmentation model and CRM tools subscription rather not targeted
than product purchase ● Build prototype in
● Increase sales through controlled channels to X%
● Introduce new online area Y
● Consolidate production from X to Y locations
ordering and ● Conduct market
● Reduce customer churn levels from X% to Y% fulfillment system research to assess
● Ensure purchase intention of at least X% ● Offer customers the potential of products in
● Improve overall customer satisfaction from X% to Y% option of on-site repair area x
● Reduce working capital by X% and maintenance ● Build new organizational
● Improve customer service performance for high value within 24h capabilities in solutions
customers from X to Y selling
● Implement new ERP system before end of year X
● Revise recruitment and promotion process to improve
consistency and transparency

Figure 2. The strategy grid

The strategy grid provides an action-oriented acquisitions. By taking an activity-based view,

output of the strategy process by summarizing the
strategy via a one-page overview listing both
planned initiatives and potential strategic moves.
The strategy grid is also a useful tool to ensure
that the strategy is balanced between exploitation
and exploration – and between organic growth
and growth derived from partnerships or
the focus shifts from the notion of a single-point,
unidirectional strategy toward a more helpful
perspective of a portfolio of ongoing initiatives
and potential strategic moves. For, in the end,
your real strategy is not what your management
team thought; it’s what your company actually
did. ■

Andreas Birnik (andreas@nus.edu.sg) is a Visiting Fellow at the National University of Singapore’s

Business School.

Richard Moat (richard.moat@orange.ro) is currently the CEO of Orange in Romania.

London Business School

Regent’s Park
London NW1 4SA
United Kingdom
Tel +44 (0)20 7000 7000
Fax +44 (0)20 7000 7001
www.london.edu
A Graduate School of the University of London

© 2008 The Author | Journal compilation © 2008 London Business School Business Strategy Review Spring 2008 33