STRATEGY OF DIAMOND STRENGTH

Strategic thinking has tended to emphasize one of two things: either a company should strategically focus on its own core competencies, an inward focus, or it should focus on the business environment, an outward focus. The Strategy Diamond introduced in chapter 6 combines those two strategic elements. Now I want to tie it in with four key aspects of organizational strength and four key peer councils.

Four Key Aspects of Organizational Strength

The first column in table 7 reveals the strategic qualities of peer-based organizations.

Table 7: DIAMOND STRENGTH IN ORGANIZATIONS

Four Key Aspects of Organizational Strength	Four Key Peer-Based Leadership Councils	Four Key Areas of Organizational Decision Making
Strategic alignment	Strategy council	Vision
Strategic openness	Functional council	Culture
Strategic transparency	Tactical council	Performance
Strategic competence	Operational council	Results

• Strategic alignment occurs when the organization's strategic capabilities, the wants and desires of the organization's customers, the actual portfolio of products and services provided by the organization, and the skill portfolios of all employees are aligned.

• Strategic openness occurs when feedback and communication involving strategy, tactics, and operations are allowed to flow in every direction, with few if any roadblocks , and anyone is free to communicate with anyone else in the organization.

• Strategic transparency occurs when all members of the organization are informed and understand the strategy and how what they do serves the customer and fits in with the organization's strategic direction.

• Strategic competence occurs when all members of the organization are allowed to develop their own unique expertise, to practice the skills of strategic thinking, and to act like an owner and be responsible for results.

Four Key Peer-Based Leadership Councils

The second column in table 7 includes four key peer councils ”the strategy council, the functional council, the tactical council, and the operational council ”whose responsibilities include overseeing the four key aspects of organizational strength.

• The strategy council continually reviews the organization's strategic capabilities along with present and future customer needs and wants to determine which products and services to offer to which customers. It views each facet of the Strategy Diamond from the perspective of vision and strategic direction and is responsible for ensuring that alignment is present in and between each facet to create and maintain competitive advantage in the marketplace .

• The functional council continually reviews how best to develop, reward, and compensate the organization's people. It views each facet from the perspective of culture and people and is responsible for ensuring that openness is present in and between each facet. The council monitors how well the organization is doing in satisfying all the stakeholders' basic needs and desires.

• The tactical council continually reviews how best to engage both customers and competitors ”that is, how best to deliver products and services to customers and successfully execute business strategy. It views each facet from the perspective of performance and tactics and is responsible for ensuring that transparency is present in and between each facet.

• The operational council continually reviews how to do all of this more profitably. It views each facet from the perspective of results and operations and is responsible for ensuring that competence is present in and between each facet. It also stays watchful for "high-level dumb", a condition characterized by a large and growing gap between the beliefs of those at the top of the organization and the reality in the trenches. The council monitors and corrects any problems in communication within the organization and constantly looks for ways to improve operations and make them more efficient.