Inherited strategies involve a parent organization setting corporate strategy that subsidiaries adapt to their context without redefining the core strategy.
What This Pattern Is
You're a parent organization with subsidiaries, divisions, or semi-autonomous business units. The parent company (or central leadership) defines the corporate strategy. Each subsidiary inherits that strategic direction and adapts it to their specific context—but they don't redefine the core strategy.
This is the pattern of inheritance with adaptation.
How It Works
The parent FL3 system sets corporate strategic outcomes. Think of these as the boundaries and direction: "Reduce CO₂ emissions by 30%," "Expand into the Nordic market," "Shift to sustainable materials."
Each subsidiary then creates their own FL3 system. They inherit the corporate outcome and ask: "How do we contribute to this in our specific context?"
- Airline subsidiary: Might focus on fuel-efficient fleet operations and route optimization
- Catering subsidiary: Might focus on sustainable packaging and local sourcing
- Cargo subsidiary: Might focus on consolidation and optimized logistics
The corporate FL3 system might have few or no flight items—mostly outcomes and strategic direction. Subsidiary FL3 systems translate those outcomes into their own detailed strategies.
Key dynamic: The parent sets what needs to happen at the corporate level, but subsidiaries own how they'll contribute.
Typical Use
Use this pattern when:
- You operate as a holding company or conglomerate with distinct business units
- Each subsidiary has significant autonomy in operations and strategy-making
- You want clear corporate direction but decentralized execution
- Subsidiaries have different markets, products, or business models
Real-world examples:
- Airline groups (parent + regional carriers)
- Holding companies (parent + autonomous operating companies)
- Corporate groups with subsidiary brands
Key Characteristics
- Corporate FL3: Sets high-level outcomes and strategic direction; typically few flight items
- Subsidiary FL3s: Inherit corporate outcomes; create detailed strategies for their context
- Connection: Flight items copied from corporate to subsidiaries, then elaborated
- Autonomy: High—each subsidiary adapts strategy independently
- Coordination: Minimal—mostly alignment check-ins rather than ongoing coordination
- Size: Works well for organizations >1,000 people with distinct business units
When to Evolve
As your organization grows and subsidiaries become more complex, evolve to Inherited - Integrated - Aligned for active coherence management. If becoming more integrated, shift to Common Strategy.