Empowering Business Success with Functional Strategies: KPIs, Alignment & Impact
Did you know that 90% of companies fail to achieve their strategic targets? The small fraction that succeeds shares, among other aspects, one crucial element: clearly defined and well-aligned functional strategies.
While corporate strategy charts the company’s overall course and business strategies focus on market-specific success, functional strategies are the backbone of operational excellence. They define how essential functions like IT, cybersecurity, and HR will develop and deploy their capabilities to support business goals and corporate ambition.
As such, functional strategies serve as critical bridges between strategic intent and operational reality. They enable needs-based service delivery, optimize resource allocation, and drive thought leadership in their respective domains. By establishing clear priorities and performance metrics, they ensure that functional excellence translates into tangible business value.
The 4 ingredients of a strong functional strategy
Developing a functional strategy is like crafting the perfect pizza – every component matters. Especially in support functions, where tension between corporate expectations and business needs is common, a clear and strategic approach is essential. Here's our proven recipe:
- The dough: Strategic enablement
Close alignment of the Functional Strategy with the specific objectives and demands from corporate and businesses is essential for a purpose-fit strategy. - The sauce: Addressing global trends
Whether it’s digitalization, regulatory shifts, or demographic change – successful strategies consider global megatrends to remain future-proof. - The cheese: Outcome-oriented objectives
Defining concrete strategic objectives over a 5+ year horizon supported by specific KPIs (Key Performance Indicators) ensures goal clarity and outcome orientation. - The extras: Alignment between central and decentralized functional units
The full picture only emerges when both central (corporate) and decentralized (business and regional) units co-create the strategy. This drives buy-in, unified direction, and committed execution.
The result? A common functional strategy shared by corporate, business and regional functional units that balances high-level vision with practical action.
What makes a functional strategy truly effective?
A powerful functional strategy includes:
- A shared vision and mission
These describe purpose, inspire teams, and guide decisions – defined by stakeholders from both central (corporate) and decentralized (business and regional) units to ensure that everyone is pulling in the same direction. - Strategic goals across all units
Aligned with the vision and mission, strategic goals consider business needs, regulations, and market forces to guide decision-making and investments of the support function. - An execution plan with KPIs
Concrete design principles („How do we get there“) along typical dimensions of an operating model such as e.g., governance, organization, and processes help to prepare strategy execution and are most powerful when combined with concrete KPIs to track implementation progress.
Our approach: From alignment to execution
Our workshop-based, collaborative approach enables the creation of strategies that are not only visionary but also actionable. The process involves three key phases:
- Phase 1: Baselining
Understand your overarching business strategy, regulatory context, and market drivers. - Phase 2: Strategy definition
Create a common vision, strategic objectives, and start defining KPIs that matter. - Phase 3: Strategy execution
Translate strategy into action with a target operating model, identify capability gaps, and launch transformation initiatives.
At Siemens Advanta, we specialize in helping organizations define and execute Functional Strategies that truly make a difference.
With deep expertise in business transformation, we support you in creating alignment across functional units ranging from corporate over businesses to regions, defining your strategy, and translating strategic ambitions into measurable results.
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