“While companies might have an intended strategy, the strategy that actually emerges can be very different.”

There’s no arguing with this statement, made by Harvard Business School professor Clark G. Gilbert, especially when applied to Internet strategy. An extensive body of literature addresses how to ensure that an organization’s intended strategy is executed. Gilbert, along with professor Joseph L. Bower, have contributed to this important topic in a new book they have edited, From Resource Allocation to Strategy.

Gilbert and Bower’s book examines how strategy is developed and implemented in multinationals, but their insights should be of interest to any size of organization that is developing a strategy.

In particular, this is a topic that gets to the core of developing and executing an Internet strategy, because the functionality of web resources should play a fundamental role in determining the strategic possibilities that exist for an organization. Unfortunately, as Gilbert and Bower discuss, the disconnect between the strategic process managed by senior leaders and the resource decisions made at the operational level can result in a strategy other than that described in the official plan.

Organizations are becoming increasingly aware that they must understand and manage the resource allocation process because it can get in the way of the strategy. But the authors point out that those allocation decisions, which are most often made at the operational level, are important because they are also where the ideas often come from in the first place.  

In an interview with HBS Working Knowledge, Gilbert and Bower provide an example that probably sounds uncomfortably familiar for too many organizations:

Operating managers often constrain strategy adaptation in ways that are very powerful. We have seen this in the response of print media organizations to the Internet. For example, senior management at a U.S. newspaper company says, "We need to get into the Internet, we need to prioritize this and make a big investment." But then at the operating level of the firm you have a sales rep who is used to selling a display ad for $40,000. The new business has a lower gross margin, the customer who is buying it isn't the rep's traditional customer, and the price point isn't the same. And so that sale rep says, "Well, I can sell a $40,000 display ad, or I can go out and find one of these new customers and sell them a $2,000 banner ad." Every day as that sales rep comes into work he makes a resource allocation decision at the operating level—how to allocate his time and attention—which de facto keeps the investment from happening, even though financial resources have been procured.

The solution to eliminating the disconnect between strategic formulation and resource allocation is clear: conduct a thorough assessment and planning phase prior to strategic development. Ensuring this phase includes input from customers as well as key operational stakeholders ensures the good ideas are captured in the strategy, and early buy-in is secured at the operational level. In particular, the organization can determine what resources to allocate—not just for technology, but for change management initiatives to ensure behavior changes to support the strategic intent.

Why doesn’t this obvious step happen more often? Lack of resources. Either leadership doesn’t know to budget for it, or the operational level doesn’t request it in their budget proposals.

So what do you think should come first?

If you have a website and you don’t have a search engine optimization (SEO) strategy then you are not doing your job.

SEO ensures that you are doing everything you possibly can to be ranked in the highest possible position when someone Googles you or your company (or using any other search engine). And yet very few organizations have done much about SEO to optimize their search engine ranking.

Here’s just a sampling of some industry leaders, for example, that don’t even have proper page titles:

• Boston Scientific – one of the World’s largest biotechs
• Lycos – the big portal
• Con Edison – one of the U.S.’s largest energy companies
• State of Ohio – Ohio government portal

Why aren’t more organizations investing in SEO? Author and consultant Gord Hotchkiss offers up some insight into the roadblocks and challenges – and offers four key requirements – to getting an SEO campaign off the ground in his column The Real Cost Of SEO: It's Not Budget, It's Believers!...

Requirement One: Corporate Understanding

The problem with organic optimization is that it can't be owned by any one department in a larger organization. While a sponsored campaign can be launched by a single department--or by an individual, for that matter--with no impact on any other department, organic optimization needs buy-in throughout an organization. This is why we generally see the best optimization on sites where C-level executives are close to the front lines, believers in optimization, and can give a single go-ahead that will open the required doors for organic optimization to happen. The bigger the organization, the more unlikely it is that this will happen.

Usually, the need for organic optimization is recognized by someone in the marketing department. Here's the typical scenario: marketing has been convinced to try sponsored search. They're generally happy with the results, but then they read an article or attend a conference where someone (and I happen to be a prime culprit) tells them that 70 percent of the clicks actually happen in the organic results. "Wait a minute," they say. "I'm spending $4.28 a click and I could get more traffic with a free listing?" They immediately run to the nearest computer and see how they rank for the terms they're currently buying. Nothing on the first page, or the second, or the third. Ah, there they are! Number 48 for their term--stuck in no-man's land.

Requirement Two: A Friendly IT Department

In the next step, the marketing guy usually visits the IT department, which has technical ownership of the company Web site, and begins with the question, "How come we don't rank on the search engines? What's wrong with our site?"

You want to create a sworn IT enemy for life? This is the way to do it. And if this doesn't work, follow up with the comment, "If you guys can't do it, we'll have to find someone who can." This is generally where my company comes in, right in the middle of a vicious turf war between marketing and IT.

Requirement Three: No Sacred Cows

Now, the SEO experts (that would be us) start saying that the Flash on the front page has to go. Suddenly, marketing is not so sure. "We love that Flash, and it cost us a lot of money!"

It gets worse. The entire navigation structure of the site has to change, we need a lot more content, we're going to want to create separate topic areas for our main offerings, we have to reconfigure our CMS, and we have to strip out all the Javascript we have on every page and reference it as an external .js file. Suddenly, marketing is second-guessing us, IT is up in arms, legal is having a fit because none of the additional content required has been vetted, and the C-level executives are wondering what the hell hit them.

Requirement Four: Champions with Perseverance and Thick Skins

At this point, our marketing champion, who got the whole ball rolling, is on everybody's most- wanted list, and not in a good way. Everybody's thinking, "You know, on second thought, maybe it would just be easier to stick to our sponsored search campaign."

There is a cost to doing SEO. It's not the budget required, which is minimal relative to other marketing initiatives. It's the time and patience required on the part of one person to get the buy-in that's needed to make SEO happen. That's a price that many companies have been unwilling to pay up to now.

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Web marketing (Part I): search engine optimization

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