What This Pattern Is
You're a corporate group with multiple autonomous subsidiaries or business units. Each subsidiary (Inherited Strategies) runs their own integrated FL3-2-1 system (Integrated - Independent)
This is the pattern of inherited corporate direction + independent integrated execution in each area.
How It Works
The parent company sets corporate strategic outcomes: "Reduce supply chain emissions," "Enter Southeast Asia," "Improve customer satisfaction." Each subsidiary inherits these outcomes and operates their own integrated work system.
For example, imagine a media holding company:
- Parent: Sets corporate outcomes (sustainability, growth, innovation)
- Subsidiary A (News): Runs integrated FL3-2-1 work system, adapts corporate outcomes to news context
- Subsidiary B (Entertainment): Runs integrated FL3-2-1 work system, adapts corporate outcomes to entertainment context
- Subsidiary C (Streaming): Runs integrated FL3-2-1 work system, adapts corporate outcomes to streaming context
Each subsidiary has complete autonomy in how they structure and manage their work. The parent doesn't micromanage FL2 or FL1. Each subsidiary owns their full strategy-to-execution flow.
Key dynamic: Corporate governance + subsidiary autonomy. The parent provides direction and oversight. Subsidiaries execute independently with inherited strategy constraints.
Typical Use
Use this pattern when:
- You have a holding company or corporate group with multiple autonomous subsidiaries
- Each subsidiary is large enough to have internal coordination (>100 people)
- Each runs a single primary business or product line (so they use Integrated - Independent))
- You want clear corporate direction but independent execution in each area
- No cross-subsidiary coordination is needed (unlike Inherited - Integrated - Aligned))
Real-world examples:
- Airline group where each carrier runs their own integrated work system
- Publishing group where each imprint runs independently
- Industrial holding company with autonomous operating companies
Key Characteristics
- Corporate FL3: Sets inherited strategy; each subsidiary adapts it
- Subsidiary FL3-2-1 Work Systems: Integrated work systems (Integrated - Independent) for each autonomous area) for each autonomous area
- Autonomy: Very high—each subsidiary owns their full work system
- Coordination: Minimal between subsidiaries—mainly corporate oversight
- Connection: Corporate outcomes copied to subsidiary FL3 boards, then elaborated
- Size: Works well for organizations >1,000 people with distinct subsidiaries
Difference from Pattern 1
Inherited Strategies: Parent strategy → Multiple subsidiary FL3 systems (no internal coordination layer shown on parent board)
Inherited - Integrated - Independent: Parent strategy → Multiple integrated FL3-2-1 work systems per subsidiary (each subsidiary manages full strategy-to-execution flow internally, completely visible within each unit)
The difference is visibility and scale. Pattern 5 is for larger subsidiaries that need their own internal coordination.
When to Evolve
As subsidiaries grow and need cross-product coordination, evolve to Inherited - Integrated - Aligned. If becoming more integrated, shift to Common Strategy (Common Strategy).
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