What Are We Actually Aligning Our Strategy With?

Why the Ambition of the Ultimate Stakeholders and a suitable Business Model should guide the organization.

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Connecting strategy and execution is one of the most familiar challenges organizations face. Strategic plans are developed, objectives are defined, responsibilities are assigned, and performance is measured. The challenge then becomes ensuring that everyone does what is needed to deliver on the strategy. There is nothing wrong with that. Quite the opposite. But there is another question that deserves just as much attention:

What have we actually aligned our strategy with?

The organization's Vision? Its Mission? Its current market position? The results we want to achieve over the next few years? Or does that alignment need to begin somewhere else?

Throughout my experience as an entrepreneur, CFO, and interim manager, one thing has continued to strike me: we readily accept the need to make organizations perform better, yet we are far less inclined to make explicit the future those organizations are ultimately meant to make possible.

That is remarkable. In our personal lives, the logic seems obvious: first decide what you want to achieve, then develop a plan to get there. Why should designing and managing an organization follow a different logic?

Whose Ambition Are We Talking About?

We constantly talk about the Ambition of a company, foundation, or other organization. We want to grow, strengthen our market position, increase our social impact, or improve performance. But whose Ambition is it, exactly? And more importantly, what is all that growth, development, and improvement ultimately meant to achieve?

An organization is not an end in itself. It is a means through which its Ultimate Stakeholder or Stakeholders seek to make a desired future possible.

The Ultimate Stakeholders are those for whom the organization ultimately exists. They may be an entrepreneur, family owners, or shareholders, but they may also be the people a public-sector or nonprofit organization ultimately exists to serve. Not everyone with an interest in an organization is necessarily an Ultimate Stakeholder.

For an entrepreneur, the desired future may involve financial independence, freedom of choice, or the ability to transfer ownership of the business. For a family, it may mean continuity across generations. For shareholders, sustainable value creation. For a foundation or public-sector organization, the starting point is the social or public value the organization is intended to create for its Ultimate Stakeholders.

For an individual entrepreneur, identifying the Ultimate Stakeholder is usually relatively straightforward. For a foundation, healthcare institution, or government organization, it can be more complicated. There may be several stakeholders with different interests and expectations.

But complexity is no reason to avoid this fundamental question. On the contrary, it makes it even more important to establish explicitly whom the organization ultimately exists to serve, what future it should help make possible, and how decisions about that direction are made. This requires careful consideration and, where appropriate, formal decision-making.

How can we determine whether an organization is doing the right things if we have not made clear for whom, and for what ultimate purpose, it is doing them?

Consider an entrepreneur who wants to double revenue. That is a clear objective, and a compelling growth strategy can be developed to achieve it. But suppose the entrepreneur's ultimate Ambition is to be free, fifteen years from now, to choose whether to continue working. What if doubling revenue is only possible because the entrepreneur personally serves more customers, makes more decisions, and becomes increasingly indispensable? The strategic objective may be achieved perfectly, while the entrepreneur moves further away from what they ultimately want.

The same applies to a family business that grows profitably but fails to invest sufficiently in transferability and succession. Or to a nonprofit organization that meets its operational targets without being able to demonstrate clearly that its intended social impact is coming any closer.

An organization can be successful by its own measures without demonstrably contributing to the Ambition for which it ultimately exists.

That is why the Ambition of the Ultimate Stakeholders should not be derived from the existing organization, its current capabilities, or its present strategy. The logical direction of organizational design runs the other way: first determine the future the Ultimate Stakeholders want to make possible, then identify the Business Model that can support it, and from there establish the organization and execution required.

But Isn't That What Mission and Vision Are For?

Many organizations already have a Mission, Vision, and Strategy. Why introduce the Ambition of the Ultimate Stakeholders as something that comes before them?

Because these concepts answer different questions:

The Ambition of the Ultimate Stakeholders describes the future they want to make possible through the organization. We deliberately use a time horizon of more than ten years. The starting point lies beyond the existing organization.

That Ambition raises the question of which Business Model is needed to contribute to it. Which customers or target groups will the organization serve? What value will it create for them? And how can it deliver that value sustainably and effectively?

The Value Propositions must support the Ambition of the Ultimate Stakeholders. They are closely connected to the organization's Mission: what value does it deliver, for whom, and what gives the organization its reason for existing?

The Vision describes where the organization aims to be in three to five years and how that development contributes to the longer-term Ambition. The Strategy defines the choices required to realize that Vision.

Organizational design, responsibilities, risks, objectives, and actions must all be connected to those choices. Mission, Vision, and Strategy are therefore far from redundant. Quite the opposite. But they gain their full meaning only when it is clear which ultimate Ambition they are intended to serve.

The point is not to create more plans. It is to make the right connections between existing plans and decisions explicit.

How Much Alignment Can We Really Take for Granted?

The fact that alignment between owners' goals and those of their businesses cannot be taken for granted is illustrated by Deloitte's Global Family Business Survey 2019.

In that survey, only 35% of respondents strongly agreed that their family business's long-term plan was aligned with both the business objectives and the individual and collective goals of family members. Half somewhat agreed, while 10% disagreed and 5% did not know.

The research concerns family businesses and respondents' perceptions of alignment. It does not establish that other types of organizations experience the same issues, nor does it demonstrate that the businesses involved were performing poorly.

What it does illustrate is that even where ownership and business operations are closely intertwined, a shared direction cannot simply be assumed.

How explicitly have we connected the ultimate Ambition with everyday decisions in our own organization?

Source:  Deloitte, Global Family Business Survey 2019, “Long-term goals, meet short-term drive,” Figure 2.

Would You Build Your Dream Home This Way?

Imagine you want to build your dream home. Would you begin by listing the rooms you currently have, improving your existing floor plan, or choosing whichever contractor can build the fastest? Probably not.

You would start with the future you envision. How do you want to live ten or twenty years from now? What should your home make possible? What requirements does that create for its location, space, accessibility, and layout? Only then would you choose a suitable design and organize the construction.

Why should organizations follow a different sequence? Here, too, the desired future should provide the starting point. From there, you determine which Business Model fits that future, what requirements it places on the organization, and how execution should be organized.

Yet in everyday practice, attention easily shifts toward the organization that already exists. We improve existing processes, develop capabilities, set new objectives, and work to execute the current strategy more effectively. All useful activities. But what if the existing organization is not suited to the future its Ultimate Stakeholders want to make possible?

We then risk becoming increasingly effective at improving something that should have been designed fundamentally differently.

Explore the comparison: Would you build your dream home the way you currently build your business?

Why Look More Than Ten Years Ahead?

Many organizations work with strategic planning horizons of three to five years. That makes sense when defining concrete objectives and organizing execution. But when determining the ultimate Ambition, that horizon may be too short.

Looking only a few years ahead makes it easy to remain constrained by today's circumstances. Existing customers, employees, capabilities, resources, and financial performance quickly begin to determine which future appears realistic.

Instead of allowing the organization you have today to determine what can be achieved tomorrow, you begin with the future you want to make possible and work backward from there.

A horizon of more than ten years is a deliberate design choice, not a scientifically established threshold. Not because we can predict what the world will look like by then, but because that horizon creates distance from the conventional three-to-five-year Vision and, more importantly, from today's possibilities and limitations.

It creates room to determine what future is genuinely desired before examining what it will take to achieve it. Think again of the entrepreneur who wants freedom of choice. That long-term Ambition already calls for a Business Model and an organization in which customers, knowledge, and decisions do not remain structurally dependent on the entrepreneur. Otherwise, the business may grow without increasing the entrepreneur's freedom.

The Business Model Is the Next Essential Link

Once the future the Ultimate Stakeholders want to make possible is clear, a second fundamental question emerges:

What Business Model can make that Ambition possible?

What value must the organization create? For whom? Through which activities, resources, and partnerships? And with what revenue or funding model?

The existing Business Model is not necessarily the right one. Different Customer Segments, Value Propositions, partnerships, or revenue streams may be needed. These require deliberate choices.

The Business Model Canvas developed by Alexander Osterwalder and Yves Pigneur is a well-known tool for making the components of a Business Model visible. But completing those components is not the same as establishing whether the Business Model is suited to the Ambition it is meant to support. The Ambition must serve as an explicit reference point. The chosen Business Model must then be translated into the organization needed to deliver it.

The Connection Does Not End With Strategy

A suitable Business Model provides the basis for determining what the organization requires. Which Mission and Vision fit? What strategic choices must be made? Which capabilities, responsibilities, processes, and systems need to be developed? What risks could prevent the desired development? And which concrete goals and actions require attention today? This creates a logical connection:

AMBITION OF THE ULTIMATE STAKEHOLDERS
Desired future · More than 10 years

↓

BUSINESS MODEL AND VALUE PROPOSITIONS
What value, for whom, and how?

↓

MISSION · VISION · STRATEGY
Reason for existing · 3–5-year direction · Choices

↓

ORGANIZATION AND CONTROL
Responsibilities · Resources · Risks

↓

EXECUTION AND IMPROVEMENT
Goals · Actions · Results · Learning

↺ Continuous review, adjustment, and improvement

The arrows indicate the logical direction of organizational design, not a mandatory sequence for execution.

A Strategy may be compelling in its own right yet fail to align with the Business Model that is needed. A Business Model may appear attractive but be unsuitable for the long-term Ambition. Employees may achieve their objectives exceptionally well while it remains unclear how those achievements contribute to the bigger picture.

Strong performance does not automatically prove that the organization is moving closer to the future it is meant to make possible.

Design First, Then Continuously Align

Imagine the organization does not yet exist. You would not begin with an existing structure, Mission, or Strategy. You would begin by asking for whom the organization is needed and what future it should make possible. From there, you would determine the Business Model and organization required.

For existing organizations, it helps to revisit their original purpose. Why was this organization established? Whom was it intended to serve? And is that purpose still valid?

The founders are not necessarily the same people as today's Ultimate Stakeholders. The original purpose must therefore also be assessed in light of the current social, governance, and legal context.

Once an organization exists, its different elements must be continuously aligned. Ambition, Business Model, Mission, Vision, Strategy, organization, and execution influence one another. New insights may require earlier decisions to be reconsidered, including the Ambition itself.

We Know the Building Blocks. But Who Connects Them?

There is no shortage of valuable management knowledge. Simon Sinek has encouraged leaders to think about their Why. Alexander Osterwalder has helped make Business Models easier to understand. Roger Martin has clarified the importance of coherent strategic choices.

There are also countless methodologies for organizational development, risk management, performance management, and process improvement. The challenge is not a lack of knowledge. The challenge is ensuring that this knowledge is applied coherently within the organization itself.

Who makes explicit what the Ambition of the Ultimate Stakeholders requires of the Business Model? Who ensures that the Strategy remains aligned with it? Who connects that Strategy to responsibilities, risks, concrete objectives, and everyday actions? And who makes it visible when circumstances change and earlier choices need to be reconsidered?

This requires more than separate plans and periodic reviews. It calls for a way of working in which leaders and teams can see the whole picture, make choices explicit, and maintain the connections between them.

From Understanding to Everyday Practice

Seeing the entire organizational landscape does not mean having to address everything at once. An organization can begin with whatever requires the most attention today: disappointing margins, unclear responsibilities, excessive dependence on the CEO, or a strategic objective that is failing to gain traction.

But none of these issues exists in isolation. The solution must also fit the desired future and the rest of the organization. How can these connections be made visible without becoming lost in plans and methodologies?

Three mutually reinforcing activities follow from this reasoning:

Oversee. Make the entire organizational landscape visible, from the Ambition of the Ultimate Stakeholders through to everyday execution.

Make Explicit. Document assumptions, choices, responsibilities, risks, and agreements so that they no longer depend solely on individual knowledge and interpretations.

Connect. Ensure that the Business Model, organization, Strategy, objectives, and execution continue to contribute coherently to the desired future.

By making these activities part of everyday management, uncertainties, risks, progress, and deviations can become more visible. The organization can also become less dependent on individual key people.

The entire landscape remains in view, while leaders and teams retain the freedom to choose where to begin and how quickly to move forward.

The Question That Comes Before Every Strategy

Connecting Strategy and execution remains essential. But that connection only becomes fully meaningful when it is clear what the Strategy is ultimately intended to contribute to.

That is why entrepreneurs, executives, and supervisory boards should regularly ask themselves three questions:

1. Do we know what future our Ultimate Stakeholders want to make possible?
2. Do we have a Business Model capable of supporting that future?
3. Have we made explicit how our organization, Strategy, and everyday execution contribute to it?

Because ultimately, the question is not simply how well we execute our Strategy.

It is whether we are genuinely building toward the future our organization exists to make possible.

What future should your organization make possible — and for whom?

Explore what the Ambition of the Ultimate Stakeholders means in your context.

Explore why Paul Joore developed ICR