Because corporate strategy is ultimately about allocating the company’s scarce resources - capital, time and talent - to win versus the competition, it is as much about saying "no" as it is about saying "yes." Strategic themes should define both what is core to the company and what is not, so that scarce resources can be concentrated in areas of advantage where competitors can be outspent or "outfocused."

Consistent with the three core assumptions and the industry consensus - global scale, network ownership and broad participation in new wave technologies - management had been investing across a wide range of markets. However, they were being matched or outspent by competitors doing exactly the same thing. Cash flows from the company’s core and competitively advantaged consumer fixed-line retail business were funding this new investment. In other words, and put in the harshest light, the historical corporate strategy had been to increase investment in positions where there were no profitable differences from the competition by reducing investment in positions where there were such profitable differences (see Figure 1)¹ - hardly a recipe for winning.

In order to force greater selectivity, the top management team developed a simple "matching rule": For every area of profitable difference they identified as a priority for investment, they would agree on an area of unprofitable similarity that would be a priority for disinvestment. Perhaps the hardest discussions of all led to the investment guidelines illustrated by Figure 2.²

The objective was not to create an equal "balance sheet," but rather to force choices and consequences. It is, after all, human nature to find it much easier to agree where to invest than to agree where to cut back.

Test #3: Suggestive
Strategic themes should guide but not prescribe business unit strategy
Based on this new shared sense of their corporate strategy, management could choose to pursue a number of immediate portfolio actions. New options included, for example, demerging and reducing investment in network companies and selling joint venture stakes in non-core local markets.

However, the full power of corporate strategy is in the impact it can have on business unit strategies. And here’s the risk: Top-down strategy can stifle bottom-up business unit creativity rather than add value to it. Corporate strategic themes need to be constructively ambiguous to provide helpful guidance while allowing for creative and distinctive strategies to be developed and delivered at the level of the customer markets. It is, after all, here where most value is ultimately created and destroyed. Effective strategic themes should tell the business units where to look for new strategies, but should not dictate their strategies.

The top management team spent time crafting simple themes to encapsulate where they intended to invest, mindful of the intended use of such themes for guiding bottom-up strategy development at the business unit level. Later, the business units were asked to come up with alternatives and recommendations for how to tailor the corporate strategy to their markets. For instance, in response to the "from network ownership to customer relationships" theme, one business unit came back with a plan for buying in basic network services; another came back with a proposal for sharing the costs of network build-out via partnership; and yet another proposed a strategy for increasing investment in relationship management funded by capital expenditure reductions in their network.

The New Corporate Strategy
By applying the three tests - distinctive, selective and suggestive - the company arrived at three primary strategic themes to describe the essence of the new corporate strategy:

1. We will be the profit leader in our chosen local markets, not the global scale player
2. We are a customer relationships business, not a network operator
3. We make new wave work for wireless customers

The new corporate strategy focuses more of the organization’s resources in areas where there are profitable differences and reduces exposure to investment in other areas to a minimum necessary amount. From having c. 70% of total investment in building undifferentiated positions under the historical strategy, the company is now targeting to devote c. 70% of total investment to build on profitable differences (See Figure 3).³

There is still a long way to go to deliver on the promise of the new corporate strategy. But by applying the three tests, top management now has a template that increases the odds that investment will be directed to areas that make the company stronger than its competitors rather than more like them.

Conclusion
Corporate Strategy as Strategic Themes
As with all management tools for creating positive change in behavior, corporate strategy is as much art as it is science. The art of crafting the right one for your company can be informed by developing three to five strategic themes that are distinctive, selective and suggestive. A simple but effective discipline is also to subject the proposed strategic themes to the "not test": Can we imagine any sensible competitor who would put a "not" in front of this? Customer-friendly themes such as "what the customer wants will drive our company" or "we will delight our customers" fall foul of this test. While these may well contribute to creating the right organizational mindset, they have little to say about what the company will actually do differently from the competition. After all, no company would state in its corporate strategy that "what the customer wants will not influence what we do" or "we will not delight our customers." If they do not pass the "not test," strategic themes are more likely to be comfortable but empty words rather than serious strategy.

If your strategic themes pass these tests today and over time, not only will you have a ready-at-hand answer to the question of "what exactly is your corporate strategy," but, more importantly, your strategic themes should give confidence that your organization can be aligned in the drive for outstanding value creation. Inevitably, your answer will never satisfy everyone, but it stands a much better chance of satisfying yourself.