Strategic cycle

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The generic view of value realisation

Value realisation isn't a walk in the park. Two forces, the inner focus (clockwise) and the outer focus (anti-clockwise), constantly fight each other.

In between, the strategic cycle tries to balance those two forces. To succeed in this, each part of the cycle (vision, strategy, tactics or mission) has to unite these opposing forces and, at the same time, connect with the next step in the process.

  • The outside-in cycle is about action and doing, driven by every possible stakeholder 'in the current situation'. It is about the stress-sensitive situations for your company.
  • The inside-out cycle is about focusing on what is essential for the long-term survival of your firm. So what has to be authentic and suitable?
  • Between these two lies the strategic cycle, with a comprehensive sensitivity to absorb external signals on the one hand and to maintain the internal focus on the other.

The consequences of emphasising the OUTSIDE-IN cycle

Being stakeholder-driven, the strategic cycle of your enterprise, driven by outside-in actions looks like one of four tracks below, depending on where you start.

The natural sequence of the inner focus,

  1. dream (about the value you can offer to your customers)
  2. analyse (which products and/or services you have to deliver)
  3. decide (what you can provide by the competencies in and capacities of your enterprise)
  4. do (what is suitable, affortable, faisable)

is reversed by the outer forces and leads to one of the four following processes.

(You start where most of your resources go primarily.)

  • Starting from Vision, the outside-in cycle affects the internal focus in this way:
    • Customer value
    • Enterprise value
    • Capacity & competences
    • ( least attention to Products & services )
  • Starting from Mission, the outside-in cycle affects the internal focus in this way:
    • Enterprise value
    • Capacity & competences
    • Products & services
    • ( least attention to Customer value )
  • Starting from Tactics, the outside-in cycle affects the internal focus in this way:
    • Capacity & competences
    • Products & services
    • Customer value
    • ( least attention to Enterprise value )
  • Starting from Strategy, the outside-in cycle affects the internal focus in this way:
    • Products & services
    • Customer value
    • Enterprise value
    • ( least attention to Capacity & competencies )

The consequences of emphasising the INSIDE-OUT cycle

Being concept driven the strategic inside-out cycle of your entreprise looks like one of these four tracks, depending of where you start.

Note that although we start in the same places in the process, we don't end up in the same places as in the outside-in tracks.

(You start where most of your resources go primarily.)

  • Starting from Vision
    • Customer value
    • Products & services
    • Capacity & competences
    • ( least attention to Enterprise value )
  • Starting from Strategy
    • Products & services
    • Capacity & competencies
    • Enterprise value
    • ( least attention to Customer value )
  • Starting from Tactics
    • Capacity & competences
    • Enterprise value
    • Customer value
    • ( least attention to Products & services )
  • Starting from Mission
    • Enterprise value
    • Customer value
    • Products & services
    • ( least attention to Capacitiy & competencies )

The path of your strategic cycle when you start from your VISION

Overall, your company's vision has to be able to create customer value and enhance products & services while, at the same time, streamlining value appropriation.

  • When your company invests tangible and intangible resources starting from its proper vision, it tends to end up with customer value when they have an outside-in mentality
  • and enterprise value when they have an inside-out mentality.

More in detail:

Outside-in starting from VISION

  1. First action.
    1. When the enterprise creates customer value, value appropriation is the next thing.
    2. The action step following this is to reserve resources for business capacity building.
  2. Second focus.
    1. The obtained capacity and competencies,
    2. contribute to enterprise value.
  3. The expectation.
    1. The expectation is that this cycle will lead in a natural way to the right products and services.

Inside-out starting from VISION

  1. First focus.
    1. Driven by the vision of those who steer the enterprise (the founders or others), the enterprise tries to create customer value.
    2. So, they (quickly) develop (some) products and services.
  2. Second action.
    1. With these products and services, they aim for value creation.
    2. If one succeeds in doing so, a process of value appropriation starts.
  3. The expectation.
    1. The expectation is that this cycle will lead in a natural way to enterprise capabilities (capacity & competencies).

The path of your strategic cycle starting from your STRATEGY

Overall, your company's strategy has to be able to produce the right products & services and enhance the business capabilities (capacity & competencies) while, at the same time, creating value for stakeholders.

  • When 'strategy' is leading in the way the company invests its resources, they expect to end up with the best products and services if they have an outside-in mentality.
  • Instead, however, they tend to excel in customer value with an inside-out view.

More in detail:

Outside-in starting from STRATEGY

  1. First action.
    1. When we create products and services, we can create value for our customers.
    2. So the next thing is value appropriation.
  2. Second focus.
    1. With these resources (enterprise value),
    2. the organisation tries to create customer value.
  3. The expectation.
    1. The expectation is that this cycle will lead in a natural way to enterprise capabilities.

Inside-out starting from STRATEGY

  1. First focus.
    1. Strategic considerations guide the organisation towards specific products or services.
    2. Therefore, investments are made in capacities and the competencies of employees.
  2. Second action
    1. These rich intellectual resources enable the development of new products and services.
    2. If the enterprise strategy is correct, this leads to customer value.
  3. The expectation.
    1. The expectation is that this cycle will lead in a natural way to enterprise value.

The path of your strategic cycle starting from your TACTICS

Overall, your company's tactics have to be able to build capacity and competencies and realising enterprise value while, at the same, time supporting the development of new products & services.

  • Tactics in an outside-in driven company usually start searching for the best capacities and competencies.
  • However, when being inside-out driven, they start with products and services.

More in detail:

Outside-in starting from TACTICS

  1. First action.
    1. In general, (sought for) enterprise capacity and competencies are deployed tactically to develop products and services.
    2. As a result, they provide value creation.
  2. Second focus.
    1. Customer value is used to,
    2. enhance products and services.
  3. The expectation.
    1. This (unique) situation separates two systems, value creation and value extraction (creating enterprise value). This separation ensures peace of mind for those responsible for the company.

Inside-out starting from TACTICS

  1. First focus.
    1. Tactical considerations force the organisation to look primarily external for competencies,
    2. in the hope that they will provide enterprise value from the outset.
  2. Second action.
    1. The employees are deployed for enterprise capabilities (capacity & competencies)
    2. and the development of products and services.
  3. The expectation.
    1. The expectation is that this delivers the correct customer value.

The path of your strategic cycle starting from your MISSION

Overall, your company's mission has to create enterprise value and customer value while, at the same time be able to invest in business capabilities (capacity & competencies).

  • Enterprise value (resources) is the starting point of an inside-out mission-driven organisation.
  • Conversely, outside-in businesses start from capacity building.

Outside-in starting from MISSION

  1. First action.
    1. Given the (financial) value of the enterprise, the organisation starts with capacity building,
    2. followed by developing products and services.
  2. Second focus.
    1. learnings from the products & services aim to
    2. increase internal capacity & competencies.
  3. The expectation.
    1. The expectation is that this delivers the correct customer value.

Inside-out starting from MISSION

  1. First focus.
    1. Mission-driven enterprises will try to convert enterprise value,
    2. quickly into customer value.
  2. Second action.
    1. As a result, the organisations' value appropriation
    2. leads up to a large internal capacity building (not necessarily a large competencies pool).
  3. The expectation.
    1. The expectation is that this delivers the correct products and services.