10.3 Strategic Drivers and Levers, Prioritising Options and Integrating Them into Themes
Key Takeaways
Strategic drivers explain why an organisation must act, while operational, organisational and people, and product and service levers are how it responds.
A value-effort matrix classifies options as quick wins, major projects, fill-ins or thankless tasks.
A weighted criteria evaluation makes the board's priorities explicit, and its ranking should be tested for sensitivity to the weights.
Rumelt's four tests of a strategy are consistency, consonance, advantage and feasibility.
A strategy is ready for implementation only when each goal has KPIs, targets, owners and planned contingency responses.
10.3 Strategic Drivers and Levers, Prioritising Options and Integrating Them into Themes
Executive Summary: Strategy development draws together the external, internal and option analysis of Modules 2 to 4. This section explains how strategic drivers create the need to act and how operational, organisational and people, and product and service levers respond; how options are prioritised with a value–effort assessment and a weighted criteria evaluation; how compatible options are grouped into strategic themes; and how Rumelt's four criteria test whether the resulting strategy is sound.
Strategic Drivers and Strategic Levers
Strategic drivers are the forces that make the organisation act: an external opportunity or threat, a shift in customer demand, or an internal capability gap. They answer "why must we move?" A powerful driver often appears where an external opportunity meets an internal weakness (Section 5.5)—for example, booming demand for digital experiences in an organisation with almost no digital capability.
Strategic levers are the internal mechanisms used to respond:
| Lever | What it changes | Example |
|---|---|---|
| Operational levers | How core activities are performed | Automating bookings, redesigning the supply chain, new inventory systems |
| Organisational and people levers | Structure, skills, culture, incentives | New roles, retraining, revised KPIs and rewards |
| Product and service levers | What is offered, to whom and through which channels | New products, premium segments, online channels |
The levers interact. A retailer adding click-and-collect pulls an operational lever (integrating online inventory with store systems) and a people lever (training store staff to handle pick-ups and returns). Drivers and levers can also act as constraints: a strategy that needs digital marketing will stall if the organisation cannot hire or train the people to run it, however good the software.
Considerations for new products and new markets
Options involving new products succeed more often when the organisation understands user needs, can market the launch effectively, develops efficiently, uses outside technology well and has a senior sponsor with authority. Options involving new markets need alignment with long-term goals, enough cash to absorb early losses, the necessary expertise and rigorous market analysis.
Prioritising Options
Value–effort assessment
A value–effort matrix plots each option's value (revenue, margin, strategic benefit) against the effort it requires (cost, time, resources, risk):
| Low effort | High effort | |
|---|---|---|
| High value | Quick wins: pursue first to build momentum | Major projects: select only one or two, because they absorb the organisation |
| Low value | Fill-ins: delegate or drop | Thankless tasks: avoid |
Weighted criteria evaluation
Where options are close, a weighted criteria evaluation scores each against criteria weighted by the board's priorities. Criteria often include market size and growth, profitability, return on investment or IRR, value proposition, access to distribution, fit with capabilities and capacity, risk, and corporate social responsibility.
Worked example (scores out of 5; weighted score = weight × score ÷ 5):
| Criterion | Weight | Option A: premium subscription | Option B: corporate events |
|---|---|---|---|
| Profitability | 25 | 4 → 20 | 3 → 15 |
| Growth potential | 20 | 5 → 20 | 3 → 12 |
| Fit with capabilities | 20 | 2 → 8 | 4 → 16 |
| Risk (5 = lowest risk) | 15 | 2 → 6 | 4 → 12 |
| Value proposition | 10 | 5 → 10 | 3 → 6 |
| Social responsibility | 10 | 3 → 6 | 4 → 8 |
| Total | 100 | 70 | 69 |
The options are almost tied. If the board increased the weight on capability fit to 25 and cut growth to 15, Option A would score 67 and Option B 70, reversing the ranking. The lesson is to test the sensitivity of the result to the weights and to make the weights explicit, so the decision reflects agreed priorities rather than the loudest voice in the room. Business analytics—customer data, market models and scenario simulations—can improve the scores.
Integrating Options into Strategic Themes
Individually chosen options are only a to-do list. Strategic themes group related options under a broad direction so they reinforce one another and do not conflict. For a regional art gallery, themes might be: (1) position the brand as a must-see destination (domestic tourism campaigns, social media); (2) diversify revenue (venue hire, memberships, reduced reliance on one sponsor); and (3) build capability (digital skills training, process review). Each theme links upward to the vision and balanced scorecard goals and downward to specific initiatives.
Testing the Strategy: Rumelt's Criteria
Richard Rumelt proposed four tests of a strategy:
| Criterion | Question | Failure example |
|---|---|---|
| Consistency | Are the goals and policies mutually consistent? | Claiming to be the highest-quality provider and the lowest-cost provider at the same time |
| Consonance | Does the strategy respond to the external environment and its trends? | Building large physical stores while customers move online |
| Advantage | Does it create or maintain a competitive advantage? | A 2 percent price cut that rivals can match immediately |
| Feasibility | Can it be achieved with available resources without creating unsolvable problems? | A plan for national expansion funded by a small regional bank facility |
Finalising Strategy Development
A strategy is ready for implementation only when it has measures. Each goal needs key performance indicators and measures with targets, owners and reporting frequency—and the planned response if performance falls outside agreed limits (metrics, controls and contingencies). For example, if volunteer turnover exceeds 20 percent, the plan already specifies a recruitment drive and a review of volunteer support. A pre-implementation review checks that the strategy is complete, consistent and measurable before resources are committed (Section 10.4 covers the formal plan and business case).
A museum considers adding interactive digital displays. The option would attract strong visitor growth but needs significant capital, new software and staff training. Where does it sit on a value-effort matrix, and what does that imply?
Major project: high value and high effort, so select it carefully and resource it fully
Thankless task: avoid it because the effort clearly exceeds the likely value
Fill-in: delegate it to a junior team as a minor improvement to the exhibits
Quick win: pursue it immediately because the visitor benefit is high and obvious
A clothing retailer plans to open 40 large suburban stores while its customers are rapidly shifting to online purchasing. Which of Rumelt's criteria does the strategy most clearly fail?
Advantage, because rivals can easily copy the new store layouts
Feasibility, because the company lacks the cash to build the stores
Consonance, because it ignores the shift in the external environment
Consistency, because its goals and policies contradict each other
Criteria weights are profitability 40, growth 35 and capability fit 25. An option scores 4, 3 and 5 out of 5 respectively. Using weighted score = weight × score ÷ 5, what is its total?
80
60
78
12
Sections you finish are checked off in the contents.