When most people think of business strategy, they typically think of it from a top-down perspective: senior management draws up a strategy and tasks the rest of the organization with putting it into action. While there is certainly some truth to this — strategy generally has to come from the top — it’s only part of the whole picture.

Managers tend to believe once they’ve implemented a strategy and a structure, people will follow it and everything will fall into line accordingly. But oftentimes, that’s simply not the case. Organizational structure almost always emerges from the bottom as a result of the practices that occur within an organization, regardless of whatever strategy is in place.

Recognizing this reality, strategic management scholars roughly two decades ago developed what’s known as the strategy-as-practice approach, which suggests that strategy and structure flow from practices — the subtle actions and artifacts that form the foundation of organizational structure — and not the other way around. According to strategy as practice, the most effective way to craft a business strategy is by observing the practices within your organization and allowing them to inform your strategy. Unfortunately, many people, particularly senior managers, view practice as an afterthought rather than a key component of strategy. And when there’s a disconnect between an organization’s practices and its strategy, the strategy often fails.

To help explain this, let’s examine the relationship between practice, structure, and strategy in the context of corporate hierarchy: you have a supervisor you’re supposed to report to (strategy). But you don’t get along with them, so you go to the next person in the chain of command (practice), which means the hierarchy (structure) isn’t working the way it’s supposed to and the strategy is failing.

As a result of the COVID-19 pandemic and the social and economic upheaval of the last year and a half, organizations have had to deal with quite a lot of change, leading many to examine existing strategies and consider how they can best restructure. By employing a strategy-as-practice approach, businesses can ensure they’re better prepared to tackle a range of issues, from diversity, equity, and inclusion efforts to the challenges of our new remote/hybrid work model.

Diversity, equity and inclusion

Despite some progress, diversity, equity, and inclusion (DEI) initiatives at many organizations have failed to live up to their promise. This isn’t necessarily due to a lack of interest or enthusiasm, but because these organizations are crafting their DEI strategy from a very traditional top-down point of view.

Business Plan vs. Business Strategy Business Plan vs. Business Strategy Photo: Photo by Andreas Klassen on Unsplash

As a business, it’s critical to not simply say “We believe in diversity, equity, and inclusion and here’s our strategy,” but to examine the practices within your organization and understand the impact they have on strategy and structure.

Let’s use the example of a business that wants to hire and retain female employees in leadership positions. This is certainly an admirable endeavor, as women are notoriously underrepresented in these roles. However, if the practices informing that policy are flawed, then the strategy may be doomed to fail, even with the best intentions. For example, if the organization’s recruiting practices lead to only male employees interviewing female candidates, or if its socialization practices involve beers after work—interfering with child care duties, which are mostly accomplished by women—the organization is not going to succeed in its efforts. A recent U.S. Bureau of Labor Statistics report analyzing how Americans spent their time during the pandemic revealed that women spent 7 hours a day on average juggling work and child care, compared to less than 5 hours for men.

Practices prop up strategy and help ensure its success. By adjusting its practices — in this case, having more inclusive socialization practices or improving recruitment practices — an organization can strengthen its strategy.

Remote work

Though the pandemic has shown signs of waning, millions of Americans are still working from home and it's very likely they'll continue to do so, in some capacity, even after the pandemic has ended.

The shift to remote work has yielded numerous benefits for workers, allowing people to spend more time with their loved ones and affording an improved work-life balance. However, it’s also blurred the lines between work and life for many others. When work emails flood people’s inboxes at all hours of the day and showing up to the “office” is as easy as opening a laptop, the pressure to always be on and available can be overwhelming.

Many companies have taken steps to improve this situation, establishing set “office hours” and encouraging employees not to send emails after a certain time, for example. While this is all well and good, we all understand that there’s a difference between having a policy on paper and actually making it a reality.

By modeling behavior, business leaders can establish what they want the practices of the organization to be. Managers who stick to their own rules set an example for their employees. This applies to working parents as well. A senior manager who appears on a Zoom call with their child in the background or on their lap sends a message to their staff that, “This is OK. Working from home doesn’t have to be draconian and you don’t have to shut out the rest of your life.”

This gets to the heart of strategy as practice: It’s not about what you say you want to do, but the little details of what you do every day and how you’re positioning people through your organization’s practices to achieve that strategy.

Ultimately, strategy exists and accomplishes its goals to the level that it’s practiced. Many strategies fail because those at the top don’t understand all the subtleties of how their organization operates. By stepping back and taking stock, business leaders can get a better sense of their organization’s practices and how they form structures and, armed with this understanding, form better strategies.

We’re all familiar with the expression “can’t see the forest for the trees,” meaning that if you become too concerned with the details of a particular problem, it inhibits you from looking at the situation as a whole. Reinterpreted through the lens of strategy as practice, this expression might go something like this: “You can’t see the forest without the trees.”

Just as it is with so many things in life, when it comes to strategy, it’s all in the details. As businesses move forward and attempt to address the many challenges before them, they may find they’ll have more success if they pay a bit more attention to the details.

(Rangapriya Kannan is the associate dean of Faculty & Accreditation at the University of San Diego School of Business and the founder of its entrepreneurship and innovation catalyzer)