4 Strategic Intent

1. Learning Outcomes

At the end of this module, you will be able to

• Understand the concept of strategic intent o Explain the hierarchy of strategic intent o Characteristics of strategic intent
• How strategic thinking and mindset can make strategic planning effective

2. Introduction

It is said that well begun is half done. The effectiveness of the strategic management process largely depends upon how clearly the vision of the company is articulated. In today’s cut throat competition almost every organization is busy to identify its unique source of sustainable competitive advantage. The sustainability of any organization largely depends upon how clearly the organization is able to identify its purpose and the ends it intends to pursue. To explain this fundamental building block of the strategic management process, Gary Hamel and C K Prahalad coined the term “strategic intent” in the year 1989. Despite its importance, it is seen that many organizations are still not clear about its long term strategic intent and therefore are unable to maintain competitive strategic advantage in the long run. In this module, we shall explore this important concept and understand what are the key elements of strategic intent and also understand its importance.

3. What is Strategic Intent?

Organizations must define “what they want to do” and “why they want to do this”. This “why they want to do” underlies the end result that is likely to be achieved through “what they want to do”. This end result is referred to as “strategic intent”. In simple terms strategic intent envisions a desired leadership position of the corporate. As defined by Hamel and Prahalad (1989), strategic intent refers to “expression of the leadership position the organization wants to attain and establishes a clear criterion on how progress towards its achievement will be measured”. It refers to the purpose that organization strives for? What a firm should set out to achieve? It is important to understand that strategic intent is internally focused, defining what will be to produced and marketed, utilizing its internal core competencies.

As a name suggesting that “intent” related to future, whereas strategic included clear plan of action designed to achieve organizational long term goals. Therefore strategic intent may be defined as the plan of action (mission, vision and goal) which is developed by the organization intended to achieve future’s goal. Strategic intent is considered to be very important for any organization because it aligns the organizational activities with the goals itself. This has three attributes sense of direction, sense of discovery, sense of destiny.

•      Sense of Direction:

To define the strategic intent with clarity, it is important to have a long term sense of view about the future markets and consumers so that the firm is able to design and identify the competitive position it intends to build over the next decade. It is important to have a unifying and personalizing sense of direction so that there is no confusion in terms of where the organization is heading to.

•      Sense of Discovery:

Once the sense of direction is clear, it is important that the company’s strategic intent should retain a sense of discovery and excitement about the future. This acts as a great motivational factor and provides an opportunity to the employees of the organization to explore new competitive territory and in the process create a competitively unique outlook for the firm.

•      Sense of Destiny:

Further it is important to understand that strategic intent also has an emotional edge to it. The employees of the organization should own this so that they are able to work hard to realize the desirable strategic intent. All the stakeholders in the organization should perceive the strategic intent as inherently worthwhile and channelize their efforts towards realizing it.

The underlying purpose of having a well defined strategic intent is to ensure that the employees understand, believe and live according to it. Strategic Intent should have a well defined logic, should communicate an urge among its employees to discover its intended future. This perspective is very important for the vitality of the employees. Expression of strategic intent is to help individuals and organizations share the common intention to survive and continue or extend themselves through time and space

Strategic Intent is a long term goal which should be ambitious and built upon firm’s core competence and also stretch the firm’s core competence. Since strategic intent works like an obsession for an organization, there is a possibility that it may result in the resource and capability gap. In order to ensure that the resource and capability gap does not become an hindrance in achieving the desired future position, the firm should also identify this gap and also put in efforts to bridge this gap enabling the firm to achieve its desired future position. The concept of strategic management also encompasses active management process which focuses on providing leadership in terms of motivating and communicating people to contribute creatively. The job of the leadership is also to ensure that the motivation among the employees is sustained over a longer period of time irrespective of change in circumstances. Another critical aspect is to ensure that the resource allocation is done properly so that there is no constraint. In simple terms strategic intent is the combination of vision (Where we want to get to?) and intent (How we intend to get there?).

4. Hierarchy of Strategic Intent

To ensure that the organization is able to realize its strategic Intent, this concept has a hierarchy and it includes organizational vision, mission, objectives, goals and plan. The framework within which firms operate, adopt a predetermined direction and attempt to achieve their goal is provided by strategic intent. Let us briefly understand each of these concepts, though a detailed discussion is provided in subsequent modules.

Vision: Vision is highest in hierarchy of strategic intent and reflects the aspiration of organization. It is defined as a long term goal of the organization in which organization is intended to achieve in future. Vision of the organization is developed before starting the business. Therefore it aligns the every employee’s work with the organizational long term goal. It is what that organization aspires to be in future. It is the first element that organization focuses upon and acts accordingly to other activities. For example: What I want my business to be?

Mission: Mission is fundamental unique purpose that sets a business apart from other firms. it gives the answer of why organization exists and also defines the path to achieve vision of an organization. Mission statement is written process that communicates why organization exists. For example what my business is and does?

Goals: Goals denote what an organization hopes to accomplish in a future period of time. These are tactical objectives that organization’s management defines to outline predictable future outcomes and guide employees’ efforts. For example, what will get my business there?

Objectives: Objectives are the end state specifically how the goals shall be achieved. Objectives of the organization are short-term and medium-term goals that an organization seeks to accomplish. It plays an integral role in formulating policies for business and allocation of organizational resources at right place. For example, right person at a right place.

Plan: it includes deciding about future in advance. It helps to achieve the long term objectives of the firm and monitoring explicit strategy to achieve them. Human resource allocation is also considered as one of the important aspect of the planning.

5.   Effective formation of Strategic intent

The effectiveness of the formation of strategic intent depends upon the following conditions

All the management levels should be committed towards the pursuit of specific, significant performance criterion.

The employees should believe in their company’s value proposition and create products that meet the expectations of the consumers.

The employees should be entirely focused on the firm’s ability to outperform its competitors and thereby ensuring sustainable competitive advantage.

Strategic Intent implies a stretch for an organization. As intentions are always ambitious and are beyond fit, organizations will have to stretch its resources and capabilities beyond limit.

There is a possibility of misfit between the ambition of an organization and its present resources. As discussed earlier there can be resource capability gap which the firm should provision for and also identify how it intends to fill this gap.

Wherever required, the organizations will have to build new competencies and capabilities to achieve its vision. According to Hamel and Prahalad, organizations should learn how to leverage resources which is important for the long term success.

The process of strategic intent is as below

Strategic intent: the organizations are supposed to define their strategic intent at a very early stage. It should involve all those factors that may guide, direct and influence firm’s day to day activities. Therefore, it becomes necessary for every organization to set up their master plan.

Identifying challenging situations: while framing strategies and objectives firms are required to identify the potential challenges that may encounter in future and should communicate with all the employees in organization.

Implementation of strategic intent: if problems are clearly defined and communicated within business the next step is to implement or give power to implement strategic intent in the organization.

6.   Importance of Strategic Intent:

Having a clear and well defined strategic intent is important because of the following reasons. These include –Expression of strategic intent is to help individuals and organizations share the common intention to survive and continue or extend themselves through time and space

Achieve clarity of purpose among all managers and employees. Project a sense of worth and intent to all the stakeholders.

Helps in Optimum utilisation and allocation of the resources.

Good Vision is always a source of inspiration to the employees. Brings in role clarity among employees.

Fosters long term thinking approach among the employees. Reduces the chances of conflict.

Fosters risk taking and experimentation among the employees. Makes the organization competitive, original and unique.

Promotes logical implementations of the plans.

Creates synergy in the efforts of the firm due to common desired strategic direction. Provides a focal point for all the stakeholders in an organization.

Enables superior organizational performance and therefore enhances shareholder value. Resolve divergent views among the managers.

7. Characteristics of the Strategic Intent:

As discussed earlier, establishing a clear strategic intent is critical for the long term success of the organization. Some of the characteristics of strategic intent include

It starts from reality to be

It implies intentionality and drive

Establishing BHAG – “Big, Hairy, Audacious Goal” – While writing a BHAG, it is important to know that it is Big, but simple and understandable; there is no right or wrong goal. It focuses on results vs. activity; is highly focussed, energizing and tangible; and challenges and excites the people to think beyond usual. BHAG is basically an answer to the intersection of the following three questions – What you are potentially best at?; What you are deeply passionate about?; and What drives your actions and decisions? .

A BHAG engages people and requires little or no explanation. It acts as a unifying focal point of effort and acting as a catalyst for team spirit.

It is said that great ideas bring great results and therefore BHAG focuses on establishing grandiose performance target.

It reflects a purpose which is beyond fit i.e. out of proportion to its immediate capabilities and market position.

The magic of well crafted strategic intent is creation of opportunities.

It commits all actors and empowers all stakeholders so that there is no stone left to achieve the well defined vision.

Strategic Intent calls for continual development of all the stakeholders so that the purpose identified is well achieved.

While framing strategic intent, all the concurrent scenarios are looked into and suitable course of action is taken.

Strategic intent should ensure that all the activities, investments and efforts are aligned properly.

It should signal relentless commitment to winning and establishing competitive standing.

Strategic intent facilitates growth and expansion of an organization by providing proper direction of work for taking positions intended to achieve goal.

Strategic intent clear commitment of the employees toward their goal. As a result, employees’ role and rewards are pre-decided. This makes them self driven and confident toward their work and goal.

When organisations depend upon their employees for the success of the organisation and shows faith & commitment on them. Thus, it motivates them to friction free work which is essential for smooth accomplishment of organizational goals.

Strategic intent develops sense of autonomy, responsibility and accountability along with their duties. Somehow, this develops sense of innovation among them to do their job.

Strategic intent management seems to be very active and focuses on the essence of winning. It has to make to clear indication of their business’s direction thus they defined problems are associated with this.

Strategic Intent promotes risk taking as they don’t restrict their thought to past and present but brainstorm and also interested to try something new for their business.

Strategic Intent calls for a resilient approach and it is important to have backup plans available to them if one fails get ready with another one. In simple words we can say that they have ability to bounce back in adverse situations.

Strategic Intent promotes creativity and calls for an out of box thinking so that an effective strategic intent is established.

8. Developing Strategic Mindset

Strategic thinking is the ability of the managers to think about, complexities, and implications of a situation; anticipate possibilities; and plan what to do. It is an extremely effective and precious instrument for the organization. Not in organizational context but in personal life as well to arrive at a better decision. It’s all about the critical set of skills where it allows us to choose best course of action. It is an attempt to develop a best guess about the future. In other words, strategic thinking is the skill of analyzing and conceiving important ideas, decisions, strategies and plans. It is the most valuable skill for success in business. Strategic thinking generates the creative act of synthesizing experiences into a novel strategy. Strategic Thinking is about synthesis. It involves intuition and creativity. The outcome of strategic thinking is an integrated perspective of the enterprise, a not-too-precisely articulated vision of direction. Now a day everyone is required to have critical skills to become a better decision maker. Following critical skills are to be requiring for critical thinker:

1:  Strategic thinkers must have the logical and creative ability. This talent helps them in build up confidence and put into practice.

2:   Strategic thinkers should have the ability to conceptualize the picture of the organization as whole which must be clearly with business vision. They must have both the skills such as thinking with a calculated purpose and visualizing the picture of organization. These skills are complimenting with each other.

3:   They must have the ability to design strategic action plan along objective broken down into different parts among employees in the organization.

4:   They must be having flexibility into their plans. Because all the time same plans are not going to make them survive in adverse situations. They should be proactive rather than reactive and have an ability to anticipate risk.

5:   Strategic thinkers must be adaptive because they should listen and understand the situations and observe it. They should provide them strategic information to guide them in difficult situations.

6:  They should learn from their bad experiences as well so that they may able to think better on strategic issues.

7:   Strategic thinkers should consider the time constraints as well. Because sometimes lack of time they had rush to conclusions and judgments rather critical analyzing it. It should be avoided and always ready to better perform in such type’s situation.

8:  Along with time need arise those strategic thinkers to be patient and great ideas and thoughts require a time to put into practice.

It is important for the organizations to build up a strategic architecture that enables the firm to establish objectives and competence building. Further the strategic architecture will help the firm to develop a road map for the future on which the t core competencies are to be build. The strategic architecture also creates a managerial culture, team work, a capacity to change, and a willingness to share resources, and to think long term. Further it brings in consistency of resource allocation and administrative infrastructure.

9. Summary

In this module we discussed the importance of strategic intent in the overall strategic management process. It is said that well begun is half done, in this spirit, the concept of strategic intent has been developed which sets the long term goal for any organization to achieve. Strategic intent is internally focused and defines what will be to produced and marketed, utilizing the firms’ internal core competencies. Strategic Intent has three attributes sense of direction, sense of discovery and sense of destiny. Expression of strategic intent is to help individuals and organizations share the common intention to survive and continue or extend themselves through time and space. Strategic intent is beyond fit. We also discussed about various characteristics of strategic intent. Developing a strategic mindset allows firm to grow and change pragmatically. Strategic mindset can lead to overemphasis on existing resources and present opportunities. The strategic intent notion helps managers focus on creating new capabilities to exploit future opportunities.