SFO Blog - Helping You Build Your Company into a Strategy Focused Organization

Saving Strategy – How to Make “Doing Strategy” Meaningful in an Age of Disruption

Did you realize that the approach to strategy that most companies (and consultants) use today was formulated in the last century?

That’s right. Back in the days when people had to talk face to face and TV was the new kid on the block. A time when if someone called you while you were out at the store they left you a message and had to wait until you got to a land line to call them back. And an era where the typical computer was big enough to fill a room at your university.

Back in those days, life and business moved at a much slower and predictable pace - so a slow moving, mechanistic and linear approach to strategy was adopted. And it seemed to do the trick for a really long while.

How different does our world look today? People around the globe are connected to each other (socially and for business) 24/7, digital technology is a part of everyone’s lives, big data isn’t a new concept anymore and AI is lurking on our horizon, and no industry is immune to disruption. Things have changed so much in just a blink of an eye and there’s every indication that things will only accelerate.

So why would we think that the old way of doing strategy would still apply in this new world? It just doesn’t make sense but, surprisingly, the old-school approach to strategy is still taught in many universities and business schools today.

It’s kind of crazy but this is where we find ourselves at this moment in time.

Many business leaders have felt the sting of applying this dated approach to strategy to their company and business reality. They’ve invested time, effort, resources, and money on a long, drawn out planning process only to realize that the strategy that came out the other end was DOA. It took so damn long to craft the strategy that a critical change in the business environment required a strategy do-over right out of the gate.

The response? After an experience like this, most business leaders would rather “wing it” when it comes to strategy than waste time trekking down the tired strategy path again. Who could blame them? More importantly - where’s the alternative?

Some consultants and darling tech companies have adopted approaches to planning and business management that work on a shorter horizon. The thinking is that since things will change anyway, why even bother planning for, let alone think about, the long term? With these approaches, “strategy” equals a collection of vague and generic directions, and quarterly goals and to do lists that hopefully get your business to the next level.

Hey – if it works for <insert the name of the latest tech star here>, why not for us?

The problem is that these new approaches to “doing strategy” appear to have been created with the belief that the best (only?) way to solve the problems with old school strategy is to focus on speed, and the short-term, while sacrificing the fundamentals required for sustained business success.

And while these new approaches may produce short-terms gains, it often (and sadly) doesn’t take long before something blindsides these companies and their business leaders find themselves wondering what exactly happened and how they got here.

Unfortunately, in these situations, many folks conclude that there was no way to have seen the big change coming. However, the fact is that, with a better strategy process in place – one that’s designed for a time of disruption – they could have been positioned to surf, or even lead, the change themselves.

So – what needs to change when it comes to “doing strategy” in this age of disruption? How can we save strategy and re-make it so that it becomes a powerful tool for sustained business results and success in a time of significant, and often unexpected, change? Here’s how:

First of all, we need to get rid of the activities in the old strategy process that prevent businesses from being fast and adaptable. Things like customer/stakeholder engagement events, the annual planning retreat, and extended budgeting and operating plan synching cycles.

Essentially, we need to move away from treating strategy as an event to making “doing strategy” an ongoing process for our organizations.

Next, strategy needs to move beyond the old-school fixation on life and conditions within our organization to include much greater emphasis on (1) keeping our finger on the pulse of our external environment (including our customers) and then (2) incorporating this information quickly and intelligently into our strategy calculations.

However, most importantly, a new approach to strategy needs to focus on what was often hidden in the traditional strategy process: the key strategic choices and business model the company is betting on to deliver success.

In fact, to do a better job in an age of disruption, “doing strategy” needs be a no nonsense process that’s focused on capturing, implementing, testing, validating, and improving (or innovating) a company’s strategic choices and its business model.

That’s it.

Here’s a one pager that gives you a closer look at the essentials of this new approach to doing strategy.

Download Express Strategy in 1 page 

This new process (let’s call it Express Strategy) is lightning fast! The initial turn through it can be done in weeks rather than months and then your business can cycle through the steps quarterly, more frequently, or whenever the need for a change is detected. The key to success is that your organization moves through the sequence continually supported by a steady stream of data, knowledge, analysis, and insights that helps you and your team change exactly what needs to change when/if it needs to change.

The outcome is this a more dynamic approach to doing strategy that gives your business greater odds of sustainable success in a rapidly changing and disruptive business environment.

 

Are you interested in learning more and/or giving Express Strategy a try? I’ll spend time in my next blog posts going over each step in this new strategy process and giving you tips you can use to adopt the express approach to “doing strategy” in our organization.

 

Is Your Organization’s Strategic Plan Putting Your Business Results at Risk?

Does your organization have a traditional style strategic plan? You know – something that looks like a three year “to do” list? If you’ve ever heard anyone in your organization proudly declare that the strategic plan is “done”, then you know that your organization has a “to do” list strategic plan and mindset.

If this describes your organization and your strategic plan then take it from me - you have a serious problem on your hands.

The problem with creating (and positioning) your strategic plan as a “to do” list is that, in a highly changeable and volatile external environment, that “to do” list could become irrelevant at a moment’s notice. I think that business leaders realize this and it probably explains why more and more organizations are less than enthusiastic about strategic planning. The fact is that most traditional strategic plans run the risk of being dead on arrival – making the time and effort invested in them seem like a huge waste.

Unfortunately, many organizations become invested in their strategic plan’s “to do” list just because of the amount of effort that went into creating it. I know that an organization is working with a “to do” list mindset when I see them focused on completing the list come hell or high water. Even when something important has changed in their business environment. They carry on working away at the projects and activities outlined in the strategic plan instead of stopping to consider whether the things on the list are still the right things to do.

So - why does this happen?

In many cases, checking off the items on the “to do” list equals strategy execution and strategy execution is usually what business leaders and employees are focused on and rewarded for. If you aren’t checking off the stuff on the list in the strategic plan then it’s going to have an impact on an evaluation of your performance sometime down the road.

Now don’t get me wrong – solid strategy execution is critical if a company is going to maximize its business results. However, strategy execution only leads to success when you are focused on doing the right things. When something changes in the business environment, continuing to complete everything on the old “to do” list often doesn’t make sense. Sadly, even when doing so can result in focusing on doing the wrong things, many organizations just blindly carry on, completing everything that’s on the list.

In my experience, organizations often behave like this because there’s simply not enough information available in the strategic plan to help them make an informed course correction.

This factor is perhaps the biggest barrier to business results success so let’s take a closer look.

Most traditional strategic plans include mission and vision statements, core values, four or five strategic directions, lists of the objectives, goals, or tasks that support each strategic direction, and the usual list of the activities and projects planned for completion over the next three years. While it seems like there’s lots of information there, it’s what’s missing from the traditional strategic plan that actually causes the problem.

What’s missing is a clear model showing the thinking and critical choices the organization is making, and the objectives it must focus on relentlessly, to deliver value and achieve the desired end state described in the strategic plan.

That essential model must map out the key results drivers for the business and make it clear how they work together to produce a defined/desired outcome.

In other words, we need to see an organization’s current business model included as part of its strategic plan.

No matter what business your organization is in, you are operating with a business model. That is you’ve got some ideas about who your customer is and why they should do business with you. Based on this, you’ve made specific choices and set up your business to provide products or services to your customer in a certain way. You may have carefully thought through your revenue and cost models as well. All of this thinking and choices create/form your business model.

Sometimes an organization has a business model by design while others have a business model that they haven’t thought much about or never even considered articulating. Either way, at any point in time, every organization, including yours, has a business model.

It turns out that, in an environment of rapid and surprising change, being explicit about all the assumptions and choices in your current business model is critical if you’re ever going to stand a chance of being properly positioned to respond quickly and effectively to change.  

It’s important to realize that, these days, strategy execution can no longer be just about completing a “to do” list. It needs involve more. It needs to be about implementing, testing, validating, and improving (or, sometimes, innovating) your business model. When this is what strategy execution is about for our organization, your strategic plan must evolve from a simple “to do” list to a plan for implementing, testing, validating, and improving your business model.

The new, more effective type of strategic plan must include, and revolve around, an organization’s business model.  

When your strategic plan makes your business model the centerpiece, you make all the current thinking and business choices that inform what your organization currently does transparent to everyone in your organization. Armed with all that information, insight, and understanding, your people now have something to work with when there’s a change in the business environment. When a change is detected, people can work together more effectively to assess the change, consider its impact on the business model, and then determine exactly what (if anything) needs to change about the business model. And, because your business model provides the foundation for what your organization does and focuses on, using a change in your business model to determine what you should start, stop or continue doing to implement the business model produces course corrections and actions that are optimally aligned with the revised business model.

 

So - the problem with most traditional strategic plans is that, while they are stuffed full of information, it’s not the kind of information that enables agility and success in today’s world.

The new approach to strategic plans puts an organization’s business model at the center and invests in making important business choices clear to everyone in the organization. This new type of strategic plan outlines current thinking on the essential drivers of desired business results and describes what the key business choices look like in. Making everyone in your organization an expert in your business model unlocks your organization’s ability to implement it more efficiently, even when there’s a change in the business model. Because it’s easier to re-align the activities and focus of the organization, your organization’s ability to achieve sustained business results is maximized.

 

Is your organization working with a traditional, “to do” list strategic plan? If so, it’s time for a change.

By making your business model the star of your strategic plan you will effectively transform this important document from a dust collecting relic to a powerful tool for ensuring the ongoing success of your business in today’s fast paced and evolving world.

 

The strategy map is a great tool that’s specifically designed to help you translate your business model into action. To learn more about strategy maps, why not explore the posts in the Strategy Maps section of this blog?

 

Tips for Getting on Top of the Initiatives and Deliverables in Your Strategic Plan

If you are like most organizations, you have a strategic plan that’s filled to the brim with tasks, initiatives, and deliverables all slated to be completed over the planning period (usually three years). I recently saw a strategic plan with the usual 5 strategic directions supported by, on average, 9 actions, initiatives, or projects each. That amounts to 45 projects total to be completed in just three years!

While I’d like to say that this is unusual, sadly, it isn’t.

I’m sure that you know what happens next. Each of these activities/initiatives becomes a line item in a huge project tracking Gantt chart. I’ve seen these documents range from 20+ projects for a small enterprise to over 60 items for a larger organization. Quite often, the majority of these projects are up and running right out of the gate even though the organization is working with a three or five year planning window.

I often wonder how they manage to keep the work of the organization going with all of these projects diverting attention and capacity. Many do it by, frankly, running their staff ragged while most simply fail to see all of the projects on their list through to completion.

The sad fact is that leaders in these organizations think that the problem is that their organization just isn’t good at managing everything that’s going on. However, the truth is that it’s just not reasonable for an organization to be able to accomplish a high number of projects AND keep the lights on. A first critical problem is the volume of projects on the “to do” list.

Now, many consultants will tell business leaders that 20+ projects is unrealistic (true) and that they need to aggressively shorten their list down to 3 – 5 projects per year (how do we know whether this will be enough to move far enough down the field over the planning period?). And while this sounds like good advice, business leaders and organizations STILL continue to struggle with massive lists of projects with similar timelines. Why?

I think that it’s because we have fallen short and haven’t provided business leaders with a solid way of deciding which projects should go on a project “short list”. In other words, business leaders need an approach for assessing and then prioritizing the projects their organization COULD undertake over the planning period.

Let’s take a look at a four step, fact-based approach that I use to help the business leaders I work with do exactly this.

 

PHASE 1: Keeping the Project List in Your Strategic Plan Manageable

 Step1: Achieve consensus on what your strategy really is

Did you realize that most strategic plans I see actually fail to complete this important first step?

Before you have a hope of being able to assess and prioritize the projects, tasks, and action steps you are considering completing over the planning period, you need to have a clear idea of:

1. The ultimate outcome your company or organization is trying to produce;
2. The critical, high value objectives you must focus on and deliver against over the long-term to produce that ultimate outcome; and
3. Where you want to be, in measurable terms, by the end of the planning period.

Readers of this blog know that my preferred tool for capturing this information is the strategy map. It’s ideally positioned to document and display your thinking on the items above. Completing step 1 allows you to clearly identify the high-value essentials that must be present and working well in your organization to achieve your desired ultimate outcome. Most importantly, this information provides you with a focused framework and criteria for project assessment and prioritization.

 

Step 2: Identify strategy-critical strengths and gaps

How well is your organization positioned today to get to where you want to be by the end of the planning period? Do you have any gaps in your current business that will prevent you for performing any of those high value objectives that support delivery of your ultimate outcome? Do you have any strategy-critical strengths that must be preserved over the planning period (and could be put at risk by focusing on closing gaps only)? Where is performance on those high value objective areas today versus where they need to be by the end of the planning period?

Ideally, you’ll leverage performance results data and facts to answer these important questions about the current state of your organization. After you’ve completed this step in the process you should have a good idea of the gaps you need to close to get to the level of performance you’d like to achieve by the end of the planning period. Step 2 concludes with using this information to create a more focused and relevant list of strength maintaining and gap closing projects that you should consider implementing.

 

PHASE 2: Using Criteria to Prioritize the Project List

 Step 3: Develop, assess, and prioritize your project options

Now it’s time to critically evaluate your project options. How will you finalize your list of possible projects and what criteria will you use to create a prioritized list? Here’s how:

Using your project list from step 2, you’ll want to assess (1) the strategic value of each proposed project, as well as (2) the size of the gap each project is designed to close. The table below outlines the different questions you can pose to complete this assessment.

Express your answer to each question as a number rating (I’ve provided a guide to each rating scale below the table). Leverage the information gathered during steps 1 and 2 to develop your rating responses.

 

Use the combined ratings for each project to determine the relative priority of each project on your list. Now, re-organize your list of project options based on their ranking. Priority 1 projects are a high priority and go to the top of the list, followed by priority 2A, 2B, and 3 projects. Projects that are not a priority should be set aside for now – since they have been deemed to have low strategic value, you should think about taking them off your “to do” list permanently.

 

Step 4: Space out your project deployment plan over the entire planning period

Now that you have your project options sorted in priority order it’s time to decide how to stage these projects over the planning period. Though there’s no hard and fast rules about how to make your scheduling choices, the relative priority ranking of your projects should make this process fact-based and easier to do.

A word to the wise: Resist the temptation to front-end load your projects in year 1!

The smart alternative is to begin in year one with your priority 1 projects – these have high strategic value AND you have a big gap to close. Many organizations decide to get started sooner than later with these gap closing efforts. If you find that you have a long list of priority 1 projects, you can do a further ranking within the priority 1 project list. Simply place projects with a higher strategic value - gap rating closer to the top of the list and get started with those projects first. Priority 2 and 3 projects can be scheduled for later in the planning period since you’ll need less time (and probably less effort and fewer resources) to close the gap.

Some organizations choose to attack a few lower priority projects in year 1 because they offer the promise of “quick wins”. This is fine. How you choose to schedule your projects over the planning period should be driven by the combination of the priority ranking and the culture and capacity of your organization.

 

At the end of this thoughtful process you should have a short list of relevant projects that are timed for completion over the planning period on a schedule that’s do-able and is endorsed by the people tasked with completing the projects.

 

I see too many organizations with too many strategic projects struggling with unrealistic project completion timelines. The root causes of this difficult problem usually include (1) an unclear definition of the high-value, “must have” elements of their strategy, and (2) a lack of a strategy-focused, evidence-based method for project selection and prioritization. Organizations that implement the four step process I’ve outlined here still have to make difficult project choices but most report that it’s far easier to make these choices because they can bring an objective set of criteria to their discussion and decision-making process.

Does your strategic plan include a huge list of projects, activities, tasks, and deliverables? Is your organization struggling to successfully manage everything you’ve committed to in your strategic plan?

If so, take a step back and use this four step approach to critically evaluate, refine and re-prioritize your strategic project list.

 

Time is Money and What It Means When It Comes to Strategy

An old saying states that “time is money” and it still applies today. Most people take this sage advice as a reminder to be efficient in their work – that is, the longer you take to do something, the greater the amount of money you spend/waste accomplishing it. However, in these days of rapid change, “time is money” takes on another meaning. In this case, the longer you take to make a change in your organization’s direction/business model when faced with a shift or disruption in the business or operating environment, the more it will probably “cost” you in the end. The penalty for being a risk adverse tortoise rather than an agile adaptive hare these days can range from lost opportunities to revenue loss and, in the worst cases, bankruptcy.

In addition to this, I’d also include another perspective on “time is money” - one that’s focused on value, investment, and return. So, for the sake of completeness, let’s also frame “time is money” as meaning that “time invested well (i.e. on the “right” things) delivers value”.

The implication of these different perspectives is that time is actually a shape shifter. In one case, devoting time to something can be an investment while in another situation it can be a costly waste. It also means that time spent doing something may have been an investment yesterday but now, in today’s context, it isn’t.

In my experience, business activities (and the time we spend on them) undergo a change in their value when business objectives change. And business objectives often change when the “rules” of the game change.  

However, sometimes I think that those of us in the business community don’t think that these facts apply to the activities associated with strategy. We seem to keep on doing what we’ve always done without critically evaluating whether the time we spend on them is still a good investment of time and resources in the current context. And we don’t ask ourselves whether there are new things we should be doing to get the most out of our strategy creation and implementation efforts.

Since context is everything when assessing value, let’s begin by examining some fundamental changes that have occurred in the business environment, the requirements for strategy management and business success, and the objectives of strategy activities. 

	Stable Operating Environment (yesterday)	Era of Disruption (today)
Nature of the Business Environment	Predictable (economy, competition, demand, etc.), steady and slow moving, low risk	Unpredictable (the old rules don’t apply), highly competitive and risky, shifting at multiple levels internally and externally simultaneously
Successful strategy is….	Deliberate	Deliberate + Emergent
Imperatives for Success	Complete a defined set of tasks and initiatives that have been proven to deliver results in the past	Pro-active, flexible, and agile – testing new paths and changing based on real time information
Strategy Creation – Objective(s)	Mapping out a proven roadmap with to produce a desired outcome	Continuously innovating, improving, and testing the business model (to enable or defend against disruption)
Strategy Implementation/ Management – Objective(s)	Top down management and decision making. Deliberate strategy. Management and employees are focused on completing the tasks defined in the plan.	Everyone’s involved providing multiple sources of relevant data, information, insights, and feedback. Management and employees are focused on learning and adjusting course and/or the business model together. Distributed decision-making.

With this new context, and its implications, in mind, we now have a more objective frame for assessing whether the strategic processes and tools, and the time spent on them, still represent time well spent. For example, let’s take scenario planning – a tool that has been used as part of the standard strategic planning toolkit for some time. Back in the day when the business environment was stable and predictable, scenario planning was a solid investment of time, effort, and resources. However, in an environment that's full of unpredictability and lurking black swans, putting time into scenario planning just doesn’t deliver the value it once had. In this context, it’s easy to see that scenario planning is just one case where spending the time on it has gone from being a good investment to a questionable one.

Completing a critical examination also provides us with an opportunity to see when adopting, and investing time and effort in, new strategy processes and tools makes sense in the current context. Let’s consider mapping out your company’s business model. While tools such as the business model canvas and strategy maps (two examples of business model frameworks) have been around for a while, they haven’t been routinely incorporated into the strategy processes of existing enterprises (the business model canvas is routinely used by startups). It just didn’t seem to be time well spent in yesterday’s business environment, however, when strategy management and business success demands that companies put their business model at the center of everything they do, spending time working with, and on, your company’s business model suddenly becomes an extremely high value activity that simply has to be a key part of your strategy/strategy activities.

I’m sure that I could go on and I hope that you’ll add your thoughts and comments to this post. What do you think we should take out of and add to a contemporary approach to strategy?

The bottom line is that we all need to take a closer look at everything we do in relation to strategy creation, implementation, and management because time is a precious resource. We need to remove the waste and we need to make sure that the strategy activities we do spend our time on represent “time invested well” in a business environment characterized by rapid change and breathtaking disruption.

 

Are you and your team ready to create or capture and test out your company's business model? If so, consider joining us for a four week live online training series where you'll learn "must have" business model essentials AND you'll be guided step by step to create your company's business model using the strategy mapping method. Participation includes a technical review of your company's strategy map. If you are interested in participating and/or learning more please fill in the form below - next training series begins soon!

   

Strategy Cascading – What it is and How to Do It

You may have heard of this term before. In fact, you may even have seen some dialogue in BSC and strategy management forums debating whether we should shift from a “cascading” concept. So, as we usually must when it comes to strategy management concepts, let’s define what we mean by “strategy cascading”.

When I use the term, I use it to describe the process of creating organizational alignment with strategy. Basically, strategy cascading refers to ensuring that the strategy pervades the organization at all levels so that the organization, and its efforts, are fully and appropriately aligned with the strategy.

Now – you may be wondering what strategy any given part of an organization is meant to be aligned with. While the high level answer is the organization’s overall/corporate strategy, the reality is that what alignment looks like and how it works depends on where you/your team or department is located within your organization. Often it’s easier to focus your alignment activities on getting in sync with the strategic priorities and efforts of the organizational entity (department and/or manager) that sits above you on your organization’s org chart.

However, it’s worth noting that strategy cascading (and therefore organizational alignment with strategy) also refers to ensuring that resource and asset allocation, employee skills development activities, budgets, etc. appropriately support successful strategy execution. As a result, strategy cascading must involve all elements in the business or organization.

Essentially, strategy cascading is a necessary process for optimizing organizational alignment with strategy. And, as we know, strong organizational alignment with strategy is the nirvana state smart organizations work to achieve because the greater the degree of organizational alignment with strategy, the more efficient and reliable an organization can become in executing its strategy. The result of alignment is the faster achievement of desired strategic results – even when there’s a course correction in the strategy you started with.

I’ll admit that I actually don’t mind using the term strategy cascading but I completely understand why it bothers some people. The word cascading could imply a wholly one directional process when, in fact, strategy creation, when done correctly, is quite a bit more dynamic. Ideally, an organization sets the strategy for the overall organization/corporation through an interactive process that includes people and perspectives from all corners of the organization. The result is a well-informed strategy that everyone contributed to and can get behind.

However, it’s important to realize that strategy rarely gets executed at the corporate level alone. Strategy is usually put into action through the contributions of business units, departments, teams, regional offices, etc. For the groups in the org structure then, strategy cascading involves each area of the business (1) determining their part in/contribution to the realization of the company’s strategy, and (2) translating the corporate strategy, where required, into terms, objectives, and activities that reflect and enable the business area to make that contribution.

Depending on where a business area resides in the organization, the nature of their contribution to, and impact on, the realization of the corporate strategy can be different. That is, in some cases, the contribution can be very direct while in others, the contribution is more indirect in nature. Sometimes, the contribution is mixed (often the case for HR that has accountabilities for implementing corporate strategy AND supporting a business unit’s people objectives). As a general rule of thumb, the closer a business area is to the top in the org chart, the more direct the contribution. When the contribution to the overall corporate strategy is direct in nature, it makes sense for the supporting business unit to align with/determine their contribution to the corporate strategy. However, when a business unit sits several levels away from the top on the org structure, their contribution to the corporate strategy is often realized through their contribution to their parent business area. 

However, proximity to the corporate strategy is just one of many considerations when determining the way you actually “do” strategy cascading within your organization.

In my experience, there are essentially two mechanisms for strategy cascading available to an organization, however, both begin with the strategy map. One method for strategy cascading is through the strategy map (and associated Balanced Scorecard) while the other can be achieved predominately through the Balanced Scorecard alone.

Let’s take a look at each of these approaches.

 

Strategy Cascading via the Scorecard

Can your business unit essentially adopt the corporate (or top level) strategy map without making changes to the strategic objectives AND their definitions? When this is the case, it naturally follows that the Balanced Scorecard indicators associated with the corporate strategy will apply to the business unit as well (same strategic objectives = same indicators). In this scenario, the business unit wants to be able to see their performance results for these indicators in addition to the corporate results.

Often, in these cases, the corporate results for any given indicator are simply a roll up of the results achieved by each of the contributing business units. What you need to do is determine which business units can adopt the corporate strategic objectives “as is” and contribute to the results roll up (e.g. Revenue (overall company) = Revenue (BU1) + Revenue (BU2) + Revenue (BU3)) – these business units are members of a scorecard’s/ indicator’s “breakdown structure”.

In my experience, business units can usually adopt the corporate strategic objectives in “as is” form when they are mini-me’s (mirror images) of the corporation in their purpose and strategy to achieve it (Kaplan and Norton refer to this as a Franchise scenario). For example, when I was in the group insurance business we were organized into customer-based business units and each business unit simply executed the strategy (strategic objectives and strategic imperatives) depicted on the corporate strategy map with their target customer group. This meant that all of the indicators on the scorecard were relevant to the corporation AND each business unit – we just needed to be able to show each business unit their slice of performance on each BSC indicator (i.e. that business unit’s Balanced Scorecard).

Taking this approach to strategy cascading allows you to work with one strategy map and scorecard to cascade strategy and provide meaningful performance feedback to participating business units. Having the luxury of this approach to strategy cascading can make strategy management much easier to administer.

 

Strategy Cascading via the Strategy Map (and Balanced Scorecard)

Does your business unit contribute to some but not all strategic objectives on the corporate strategy map? For the ones that you do contribute to, would it make the strategy more relatable and relevant to change them a bit (i.e. strategic objective names AND/OR their definitions) to better capture the uniqueness of your contribution? And, would your strategy map be incomplete if it didn’t include some additional, functionally specific strategic objectives?

When this is the case, it makes sense to leverage the strategy map of the closest organizational group to the business unit in question (i.e. its “parent”) and then edit it as necessary to create a new but related strategy map. The beauty of this approach is that modifying the parent strategy map helps ensure appropriate alignment while also capturing important unique strategic objective essentials on the business unit’s individual strategy map.  

New, “custom” strategic objectives on a strategy map usually require indicators that are different from the ones used by the parent business area on the business unit Balanced Scorecard. While some indicators may be common between the two scorecards, strategy cascading via the strategy map usually produces a unique indicator set that applies just to the business unit in question.

I don’t need to tell you that taking this approach to strategy cascading has the potential to produce numerous strategy maps, scorecards, and indicators. Organizations taking this approach to strategy cascading should consider using a strategy management application to help make administration easier and more efficient.    

 

In my experience, having these two approaches to strategy cascading available provides organizations with the means to walk the line between maximizing organizational alignment while minimizing the risk of unnecessary strategy map and scorecard proliferation. And while working towards this goal allows organizations to optimize strategy management outcomes without undue administrative burden, it’s important to focus on what’s most important – ensuring that the strategy cascading approach used by your organization produces a set of strategic objectives/strategy map that is relevant and meaningful to each individual business unit and their contribution to strategy and business success.

 

If you follow the guidelines and questions I have offered here, you should be able to make good strategy cascading choices. However, remember that there are always unique situations and exceptions to the rule. And don’t be surprised to discover that a mixed/hybrid approach to strategy cascading might offer the right balance for your organization.

 

My advice? When in doubt, use the strategy cascading approach that makes the most sense at the time – you can always change your approach if necessary as your organization learns and matures on its strategy management journey!

 

Where to Start on Your Organization’s Journey to Strategy Execution Success through Strategy Mastery

In a previous blog post  I revealed the five essential elements that must be firing on all cylinders if your organization is going to achieve strategy execution success. Here’s a quick reminder of all the elements and how they work together:

 The critical ingredient and most often forgotten element in achieving strategy execution success is Strategy Mastery^TM – employee confidence that they correctly understand the organization’s strategy and, as a direct result, are actively making meaningful contributions to the execution and improvement of the strategy. Strategy Mastery^TM has many components that must ALL be in place if you want to create an organization full of Strategy Masters (which is required if you’re going to maximize your organization’s ability to achieve strategy execution success). Here’s a reminder of the drivers of Strategy Mastery^TM:

 Each component in the model has several contributing factors. To see an in depth overview of all these factors, check out this blog post.

Looking at everything that goes into creating a compliment of employee Strategy Masters throughout an organization it’s easy to see that it requires a significant investment. And if you want to achieve strategy execution excellence you must also implement the four additional essential elements as well. When you look closely at what it takes to achieve strategy execution excellence it’s no wonder that business leaders can feel overwhelmed. It can be particularly difficult to know where to begin when you’re either starting the journey from scratch or, as is more often the case, when you’re trying to make a change in your organization’s current approach to strategy execution management. Based on my experience working with organizations of all sizes through their journey to strategy execution excellence, here’s my advice about where to focus as you and your organization get started on your journey to strategy execution success through Strategy Mastery^TM.

 

1 Translate Your Strategy into a Functional Strategy

Most strategic plans I see today have two problems: (1) they are essentially aspirational “to do” lists that aren’t clearly grounded within the organization’s business/value creation model and long-term strategy; and (2) they are written at such a high level that it’s extremely difficult for employees to put it into action with a high level of confidence.

Functional strategy answers some very important implementation questions and shows the key elements in the business that must work together to drive the desired outcomes. It clearly shows how these results drivers do this and identifies which sub-set of results drivers the organization plans to put extra effort on over the upcoming planning period. By depicting the full spectrum of critical results drivers, and their relationships, in an easy to understand format strategy immediately becomes more actionable – it becomes functional! When shown using a tool such as the strategy map, strategy becomes tangible to employees because they can easily see where they fit into the picture through their work, opening up the door for greater individual and team contribution to strategy execution success.

Whether your organization already has a traditional strategic plan in place or you are starting from scratch, take the time (and, if you need it, get help) to translate your strategy into a functional strategy as your first step in this journey.

 

2 Establish Learning as a Critical Core Value

A focus on learning enables your organization and your employees to take necessary action and risks, and to use knowledge to navigate more dynamically and successfully through these turbulent times. Focusing on learning enables improvement, innovation, and pro-activity – important attributes that all organizations will have to excel at moving forward.

Establishing learning as a core value in your organization must go beyond simply adding it to that list of core values you’ve got posted on the wall around your organization. You’ve got to make learning as an organizational value come alive! That is, you must take action to create and support a learning environment. Three ways you can do this as a leader are to: (1) start asking employees more questions that probe, delve into what has been/can be learned in any situation, and explore how to harness those learnings to make things better, (2) create time for, and set an expectation that, individuals and teams will actively pause for reflection, and (3) communicate the value of learning in moving your organization forward.

By setting these expectations, modelling the desired behavior, and giving managers and employees the supports they need to engage in learning behavior, and to harness the benefits, you will be making valuable inroads into truly instilling learning as a core value in your organization.

 

3 Invest in Making Collaborative Leadership the Norm in Your Organization

In their new book, Leading with Strategic Thinking,, authors Aaron Olson and Keith Simerson outline what being a collaborative leader means:

A Building relationships and moving beyond transactional work to establish deeper connections with colleagues;

B Listening in an effort to establish a real understanding of others and to avoid interpreting data through their own lens or priorities;

C Finding common interests and seeking out areas of mutual benefit that can create value beyond what individuals can achieve independently;

D Sharing power and giving away their own control while still maintaining clear lines of accountability; and

E Demonstrating trust and seeking ways to extend trust before they ask it of others.

Implementing all of these attributes can represent a big change in leadership style for executives and managers. The best way to start? Talk less, listen more, and ask lots of engaging, open-ended questions (which dovetails with creating a learning culture). And give eager employees the opportunity to run projects their way rather than micro-managing every step they take. Doing just these two things alone will go a long way in shifting leadership styles and will also begin deepening trust and building stronger relationships – key foundations if executives and managers are going to become successful employee coaches and mentors.

 

4 Start Hiring for Fit

Take the time to get clear on the values, purpose, principles, and motivations of your organization and then build these essentials into your recruitment program and hiring process. From there, start focusing on hiring employees that “fit” with your organization. 

Remember - the greater the alignment between an individual’s beliefs, values, purpose, goals, and motivations and those of your organization, the greater the degree of synergy. Synergy is the key to creating employee investment in your organization. And employee investment that’s deep and personal is the critical ingredient in achieving Strategy Mastery^TM (and all its benefits).

While a candidate’s skills and capabilities do matter, a poor employee – organization fit will always translate into the sub-optimization of the results achieved by both the employee and your organization, and the experience and happiness of everyone involved. Most HR experts agree that hiring for fit, and creating a hiring approach that builds screening for fit systematically into the process, is today’s best practice standard for ensuring organizational and employee success.

 

Beginning your organization’s journey to Strategy Mastery^TM success with these four critical elements will keep you and your team busy for a while. It will take time and resources but the investment is absolutely worth it. By starting here you will be establishing a solid foundation for creating an entire cadre of employee Strategy Masters, and you’ll be setting your organization up to achieve that elusive goal that most organizations struggle to realize - strategy execution excellence.     

 

What Drives Strategy Mastery?

In my last blog post I introduced the most essential ingredient for strategy execution success: Strategy Mastery^TM.   Here’s a quick reminder of what Strategy Mastery^TM is and what it looks like in action:

Strategy Mastery^TM

Every employee in your organization must be a Strategy Master. That is, they need to know what your strategy story is and they must be confident in (1) that knowledge (i.e. that they have the strategy story right) and (2) their contribution to the strategy. Strategy Mastery^TM is important because it drives self-motivated engagement and confident employee action, decision-making, and contribution to strategy improvement, greater organizational alignment, and more integrated business performance. All of which are essential for strategy execution success.

 

Creating employees who are Strategy Masters requires significant organizational investment. Organizations that succeed create the right environment and culture and put the right supports in place to develop and nurture a cadre of Strategy Masters across their company.

Let’s take a closer look at how these elements work to enable Strategy Mastery^TM.  

 

 

Strategy Mastery^TM  is built on a foundation that successfully combines three critical components: (1) a Learning Culture, (2) a “Doing” Environment, and (3) Coaching and Mentorship.

1 A Learning Culture: Akey core value of every organization that is successful in creating Strategy Masters is learning. A focus on learning enables an organization and its employees to take necessary action and risks, and to use knowledge to navigate more dynamically and successfully through these turbulent times. Enabling the value of learning is a commitment to openness and transparency across the entire organization. These important co-requisites open the door for learning by setting the stage for the safe two-way exchange of knowledge, insights, and best practices. When leveraged in a “doing” environment, learning accelerates the pace of strategy execution and results achievement for an organization.   

2 A “Doing” Environment: Strategy Mastery^TM requires a work environment that displays a bias for deliberate action. However, this doesn’t mean that thinking goes out the window. What it does mean is that thinking progresses rapidly to decisions which are followed by action. A “doing” environment is also pro-active in nature, taking action on what it takes to move the strategy, and the organization, forward as planned.

However, setting an expectation for an action orientation across an organization isn’t enough – it’s got to be backed up by organizational commitment to providing customized and appropriate support to individual employees AND a dedication on the part of leadership to providing the learning opportunities and feedback employees need to fine-tune and/or re-focus their actions and efforts (individually and as part of the organization).  

3 Coaching and Mentorship: Developing employees into Strategy Masters must be tackled both at the organizational level and by Managers and Supervisors working one on one with employees. Set in a culture that values a collaborative leadership approach that’s focused on engaging employees in the co-development and execution of organizational strategy, Managers spend time sharing the vision for Strategy Mastery^TM with employees and providing them with opportunities to practice Strategy Mastery^TM every day. By acting as coaches and mentors to their employees, Managers and Supervisors help all employees develop into Strategy Masters through a “learn by doing” approach. Taking this approach also allows everyone to benefit from the insights employees generate and share as they practice the craft of Strategy Mastery^TM.     

 

With this foundation in place, an organization has the positive environment in place that’s required to enable employees to translate knowledge of the organization’s strategy into action. However, this transformation doesn’t happen by magic – it requires two critical elements: (1) accurate and useable strategic knowledge, and (2) the development of the individual skills and capabilities required to take that knowledge and put it into action.

1 Knowledge Transfer and Translation: Once an organization’s high level strategy has been transformed into Functional Strategy, it’s time to take the next step: doing whatever it takes to make sure that the organization’s strategy is alive and active in the hearts and minds of every employee. This is often done through strategy communication town halls and other communication venues that usually share strategy from the organizational perspective. While this is a necessary first step, organizations seeking to create Strategy Masters must go further. Managers and Supervisors must repeat the strategy story and then engage employees in discovering and understanding the following:

● What our strategy is, what it looks like in action, and my part in it.

● How our team, and me as an individual, contribute to it every day.

● How I think I can contribute (expressed in my own words) and, as I understand our strategy better and practice working with it, how I KNOW I can contribute.

As employees talk about and develop a clear line of sight on these important topics, knowledge transfer and translation is taking place across the organization. Progress is made when employees understand organizational strategy AND can see themselves putting it into action in a meaningful way.

2 Individual Skills and Capabilities Building: While seeing oneself putting strategy into action is a necessary step in the journey to Strategy Mastery^TM, there’s often an execution gap. While employees are willing they may not be able. It’s not that they don’t want to take action, it’s that they may need new or more highly developed skills to do it. As a result, an important part of successfully translating knowledge of the organization’s strategy into action involves helping individual employees build the skills, capabilities, and confidence they need to make their contribution AND achieve their personal potential. It turns out that having many opportunities to apply and practice putting knowledge into action goes a long way to building employees’ confidence in their knowledge and abilities. Knowledge confidence stokes more confident action and decision-making – a key attribute of Strategy Mastery^TM that ultimately accelerates strategy execution success.

The good news is that traditional training programs aren’t the only way to achieve this goal. Coaching, mentoring, job shadowing, special project assignments, and job rotations are all excellent ways to help employees acquire the skills and capabilities they want and need.

 

When individual employees are able to effectively translate knowledge of their organization’s strategy into action they are well on the road to becoming Strategy Masters. However, there’s one additional ingredient that’s required to make the leap to Strategy Mastery^TM status: Individualization and Internalization. Composed of two elements (1) individual motivation – organizational motivation alignment and (2) strategy ownership and intrinsic accountability, individualization and internalization deepens an employee’s understanding of, and impact on, the organization’s strategy execution efforts, and the strategy itself.

1 Individual Motivation – Organizational Motivation Alignment: Quite simply, the greater the alignment between an individual’s beliefs, values, purpose, goals, and motivations and those of the organization, the greater the degree of synergy. Why this focus on synergy? Synergy is the key to creating employee investment in an organization. And employee investment that’s deep and personal is the critical ingredient in achieving Strategy Mastery^TM (and its benefits). 

To maximize synergy, organizations should pay attention to the employee-organization fit during the hiring process. “Hiring for fit” involves assessing the resonance between an individual’s beliefs, etc. and those of the organization. Hiring people who fit makes synergy a more natural outcome. However, the opportunities don’t stop there. The investments organizations make in the ongoing development of employees is important and the greater the degree of alignment between the development of the job skills and capabilities required to serve company needs and objectives, and the personal goals and objectives of individual employees, the deeper the synergy that’s created.

2 Strategy Ownership and Intrinsic Accountability: This is the final link between putting knowledge of the strategy into action and achieving Strategy Mastery^TM. Strategy ownership, and the development of intrinsic motivation and accountability for successful strategy execution, occurs when employees see themselves as co-owners of the organization’s strategy, experiencing a state of personal ownership for, and investment in, the achievement of the organization’s mission. When strategy ownership is truly felt, employees take personal, internally driven accountability for doing their part in, and discovering new ways of, putting organizational strategy into action.

When employees are invested this deeply, the organization’s success and their personal success are virtually one in the same, making every employee’s commitment to ensuring successful strategy execution personal and driven genuinely from the inside.

While it’s true that employees can be motivated extrinsically with rewards to translate knowledge of the organization’s strategy into action, the level of strategy execution success an organization achieves will be sub-optimal (AND it will take a lot of effort to achieve this result). In contrast, by just stretching a little further to nurture Strategy Mastery^TM  in every employee, organizations can harness the creativity and drive of everyone to achieve greater levels of strategy execution success than they ever could have envisioned.

 

Going back to thinking about the strategy execution model presented in my last blog post, here’s a picture that shows how the other elements in the model enable Strategy Mastery^TM to drive strategy execution success:

 

While much of what goes into producing Strategy Mastery^TM  isn’t “rocket science” it’s important to lay out all of the contributing drivers in one view and discuss how they work together to produce the organizational element that is most critical to ensuring strategy execution success - Strategy Mastery^TM. Until you put all the drivers together on one page, it’s easy to forget that (1) they must all be in place, and (2) must work together cohesively if you hope to create an organization full of Strategy Masters.

The biggest barriers in the journey to Strategy Mastery^TM success include the fact that it takes: a cross-functional view of organizational activities, a commitment to work together in all corners of the organization, and an investment in supporting the elements that produce Strategy Mastery^TM results.

There’s a lot to do and most organizations struggle to get all of the required drivers in place working just right.

 

So where should you and your organization start on this journey to strategy execution success through Strategy Mastery^TM? In my next blog post I’ll offer you a prioritized roadmap for putting this plan for strategy execution success to work in your organization.

 

The Essential Elements in the Strategy Execution Black Box

Many of us frequently fret about the state of strategy execution in the real world. Lots of statistics get tossed around – I’m not really sure which numbers are completely right at this point. What I do know, and what I hear from business leaders in a range of industries and sectors, is that something regularly gets lost in translation between the formulation of strategic intent and desired results, and the achievement of those results. Most people I know put it down to things going wrong during the process of putting strategy into action.

The process of putting strategy into action or strategy execution (in consultant speak) can feel like a bit of a black box to many business leaders. Sure there are lots of models out there – some are more complicated than most and some can feel a little theoretical at times. However, most executives I speak with don’t have the patience to wade through all this competing information. It’s not that they don’t want to do what it takes to put their strategic plan into action. It’s just that they want the insights they need to make the right “have to have’s” a priority while putting the other “nice to have’s” on the backburner.

In other words, business leaders just want to know the essentials for strategy execution success.

Based on my experience working with a variety of companies and organizations here’s what I advise business leaders to focus on to get the strategy execution results they’re looking for:

 

Let’s take a closer look at each element in the strategy execution black box.

 

1 Functional Strategy

Most traditional strategic plans are written at a very high level. While this may be a good place to start, stopping there makes it really hard for the people in an organization to put strategy into action efficiently and in a way that produces meaningful results. The solution to this problem is to transform the traditional strategy into Functional Strategy. An organization’s strategy becomes functional by answering the following questions clearly and in a way that every person in the organization understands (and can internalize):

● What is our strategy “story”?

● What does our strategy story look like in action?

● What are the “must have” focus areas and key choices and decisions in our business?

● Why are these elements important and how do they help us achieve our mission and vision?

● How do these elements help us deliver the big promise we are making to our customers or stakeholders?

● How must they work together to produce outstanding results? What does that mean for the way we must work together?

● What does it mean for me? Who do I have to work with to play my part and how does what I do impact others?

There are lots of great tools for helping organizations set the stage for transforming their strategy into a Functional Strategy (my favourite, of course, is the strategy map) however tools alone won’t do the trick. The key to making the move to a Functional Strategy is doing whatever it takes to make sure that your organization’s strategy is alive and active in the hearts and minds of everyone in your organization.

 

2 Aligned Organizational Resources

To do what you said you are going to do in your strategic plan you have to put the tools, technology, training, capital assets, and partnerships necessary for putting your strategy into action in place. It seems obvious but you’d be surprised how often this element gets missed.

 

3 Strategy Mastery^TM

Every employee in your organization must be a Strategy Master. That is, they need to know what your strategy story is and they must be confident in (1) that knowledge (i.e. that they have the strategy story right) and (2) their contribution to the strategy. Not everyone in your organization has to have the same high level of Strategy Mastery^TM but it doesn’t hurt. Why? Because Strategy Mastery^TM drives self-motivated engagement and confident employee action, decision-making, and contribution to strategy improvement, greater organizational alignment, and more integrated business performance. All of which are essential for strategy execution success.

 

4 Top to Bottom Goal Alignment

In the same way that the right organizational resources must be in place to put strategy successfully into action, department, team, and individual goals and activities must be lined up with strategy AND with each other in ways that are complementary and additive.        

These four elements alone are the “must have” elements of strategy execution that business leaders would be wise to focus on. Do each of these right and, in most cases, you’ll achieve strategy execution success. However, how will you know for certain that your investment in these essentials is giving you the results you want? That’s where an additional essential element comes into play. 

 

5 Data, Results, Outcomes, and Performance Information

Is your organization executing its strategy? Is it executing at the right levels? Is your organization producing the right outcomes and having the desired impact? Is your strategy even the right strategy? If not, what needs to change?

Without data, results, outcomes, and performance information you’re still dealing with a strategy execution black box. Implementing and leveraging a performance measurement and management framework gives you the insight you need to make targeted improvements in the strategy execution elements that need investments the most.

 

And that’s it – the essential “must have” elements in the strategy execution black box!

 

Now, I know that some of you out there might be tempted to think that this framework isn’t that different from some of the models out there (e.g. the Kaplan & Norton model for a strategy-focused organization) but don’t be fooled! The biggest difference in this take on the strategy execution essentials is the element of Strategy Mastery^TM.

In my experience cultivating Strategy Mastery^TM in every employee is the most critical element in determining the level of strategy execution success achieved. I’d go so far as to say that even when you do the other three things right, failing to invest in creating Strategy Masters across your organization will prevent you from achieving maximum strategy execution success.

Quite simply, what I have learned is that engaged and invested people armed with an intimate knowledge of your strategy and who are confident that they have the right knowledge of what it takes to put your strategy into action are the necessary linchpins for strategy execution success.

My advice? If you’re going to over invest anywhere in your business, invest in building your employees’ level of Strategy Mastery^TM ! The payoff will be exponential in numerous ways.

 

But what exactly should you invest in to create Strategy Masters? The real question is what are the critical factors that ultimately drive Strategy Mastery^TM ?  It turns out that the picture’s a little bit complicated so we’ll take a closer look at those essentials in my next blog post.  

 

How Strategy Communication REALLY Drives Strategy Execution Success in Your Organization

A recent article in the March 2015 edition of the Harvard Business Review looked closely at the five myths of strategy execution (“Why Strategy Execution Unravels – and What to Do About It”).  Myth #3 focuses on my favorite strategy execution “must have”: communication.

As the authors rightly point out, many organizations believe that communication of their strategy automatically translates into a common understanding of the strategy by every person who has received the communication. Unfortunately this isn’t the case in the real world. Just because an employee attends the annual strategy roll out or CEO pep talk doesn’t mean that they will walk away with an understanding of the strategy.

 

In my experience, moving from communication to understanding when it comes to strategy has more to do with the following communication/message attributes:

Focus and Clarity: I often see strategy communication presentations that include mission, vision, core values, value proposition, strategic directions/objectives, priorities, goals, targets, etc. – the whole nine yards. With this deluge of information, it doesn’t take long to get confused about what the core strategy truly is! Quality strategy communications are focused on answering a few critical questions: What is our purpose? Why do our customers do business with us? What must we focus on to deliver irresistible value to our customers AND make money? and What does success look like? A strategy communicated in this context is clear, focused, and easy for everyone to understand and, more importantly, remember.

Cohesion: Strategic plans and their directions/objectives are often presented as a laundry list with no apparent connections made between the elements. However, everyone in your organization knows that everything in your business is connected – and they want to see the connections in your strategy. Making the connections clear between strategic objectives, and talking through how they all work together to produce results, paints a clear, cohesive, and memorable picture of your strategy that employees will be sure to understand.

Consistency of Message: Once you have a clear, focused, and cohesive strategy story, does it get told in a consistent way every time, even when recounted by different people? Sure there’s room for individual personalities and communication styles but, at its core, the story of your strategy must remain the same every time it gets shared. When it isn’t, it’s confusing. And confusion makes understanding impossible.

Localization: While understanding the organization’s strategy is important, understanding where and how one contributes, individually and as part of a team, to successful realization of that strategy in your day to day work life is critical. Until employees can see their part in the picture their understanding of the strategy just isn’t complete.

 

Infusing strategy communications with these four attributes must be partnered with the use of multiple communication vehicles and venues as well as varied and frequent communication touch points. Annual CEO keynotes. Quarterly town halls. Monthly newsletters. CEO blogs. Daily shift changeover meetings. Manger-employee one-on-one’s. Informal chats and conversations. These are all occasions that can and should include strategy communications, discussions, and dialogue.

Building ALL of these parameters into strategy communications makes understanding more likely and probable.

 

However, is understanding strategy REALLY the key to successful strategy execution? I’m not sure that it really is. What I think we really need to strive for is creating employees who have strategy knowledge mastery. Driving to create strategy knowledge mastery involves ensuring that employees have the correct knowledge of the strategy AND that they have total confidence in the correctness of their knowledge. With this in mind, understanding strategy becomes only part of the confidence equation.

Here’s the thing – your employees’ confidence in their knowledge of your strategy should be high on your radar screen because research has shown that level of confidence is an important factor in translating knowledge into action. And since strategy execution is all about translating your strategy into action, employee confidence in their knowledge of your strategy, or their level of strategy knowledge mastery, is the essential factor that drives strategy execution success.   

So how do we create confidence? It turns out that repeated exposure to the same material over time increases confidence levels until, eventually, recipients of the information develop a certain level of mastery of that material or knowledge. In my experience, mastery also requires repeated exposure of consistent, high quality information in different venues and situations through/by different people/teachers/coaches/mentors.

 

The return for your investment in building strategy knowledge mastery across your organization is:

> Higher quality/more aligned operational AND strategic decision making;

> The creation of high value innovations and improvements (at all levels of your organization) that accelerate your strategy execution efforts and the realization of your strategy; and

> Increased levels of employee engagement with, and ownership for, the execution and improvement of your strategy.

 

The ultimate benefit of investing in creating strategy knowledge mastery for your organization is better business and customer results and outcomes achieved more efficiently and quickly.

 

So my advice to help ensure strategy execution excellence for your organization?

1 Focus on creating strong, high quality strategy communications that embody the 4 essential attributes I outlined earlier,

2 Deliver quality strategy communications with impact frequently in multiple different venues and situations,

3 Provide employees with opportunities to share their strategy knowledge with others and provide teachers/coaches/mentors who can reinforce that they are in fact demonstrating strategy knowledge mastery (and, if this isn’t the case, provide the support required to raise their personal knowledge of the strategy to mastery levels),

4 Regularly assess employees’ level of strategy knowledge mastery using an assessment tool designed to do exactly that (here’s a link to the best assessment tool I know - click here) and put plans in place to raise masterly levels when indicated, and

5 Repeat 1 – 4 in a never ending cycle of strategy communication investment and excellence that’s focused on creating an entire workforce of employees possessing strategy knowledge mastery!

 

How to Avoid Becoming a Victim of “the Plan”

As a strategy management consultant, I see different organizations having diverse and almost dysfunctional relationships with the concept of a (and their actual) strategic plan.  Let me share what I’ve observed from the perspective of the two primary types of clients I work with.

 

Medium-Sized+ Organizations

Almost every organization of a certain size in every industry and sector tends to buy into the idea that they should have a strategic plan. Why? Many do it just because it’s the expected thing to do. In other cases, the Board or a funder demands a clear game plan. Many leaders want a plan because they know that getting a little alignment going in their organization will, in the end, translate into the achievement of whatever the desired end result is.

For most leaders, strategic planning time gives their organization the opportunity to survey the landscape and look into the future. The resulting strategic plan tends to be a list of projects to be completed and goals to be achieved over the next few years. Once it’s created the strategic plan is executed faithfully (or as faithfully as possible!). Planned projects are completed and, if all goes well, the strategic plan is considered “done” (and successful) if all the activities and projects it outlines are completed as planned.

 

 

Start Ups/Small Enterprises

Many entrepreneurs and small business owners on the other hand tend to question the need for their company to have a strategic plan at all. In addition to feeling that, as a one person show or very small enterprise, a documented strategic plan seems like unnecessary overkill, their primary concern is that a set strategic plan will only slow them down. Particularly in a world where the future seems to change constantly, and when the business ethos centers on the concept of test – refine/pivot - rinse and repeat, a strategic plan can feel like a straightjacket to entrepreneurs and small business owners.

 

When I look at both groups of clients, I notice an interesting thing. The big guys often fall into the trap of blindly completing the plan regardless of whether it continues to be the right thing to do while the small agility-seeking guys avoid the plan just so they themselves don’t fall into this trap.

The bottom line? Both groups seem to be under the belief that the proper use of a strategic plan by a company is to, once it has been created, execute the thing as written come hell or high water.

In other words, they believe that to create a strategic plan is also an unspoken agreement to be handcuffed by, and beholden to, the plan!

Realizing this assumption has been a real epiphany for me. However, I think that, there are really two problems going on here. The first relates to what leaders and owners think a strategic plan is and should do, while the other relates to how organizations use their strategic plan. Let’s take a closer look.

 

 

1 What a strategic plan should be and include

If you examine strategic plans in most organizations right now, they look more like short-term operational plans to me. They usually include the mission and vision statements and a mention of the organization’s core values. Then, after outlining the findings from a SWOT Analysis exercise, they present 5 or 6 “strategic directions” or priorities for the upcoming planning period and then detail the objectives, goals, and projects the organization intends to achieve/complete over the planning period to support the strategic directions.

Three years in the future, after this planning period is done, a new strategic plan will be created in response to the results of the latest SWOT Analysis. It isn’t unusual for there to be very little consistency between the current strategic plan and the future one. As a result, each strategic plan acts almost like a self-contained plan.

What’s missing from this type of strategic plan is the identification of the business model and strategic choices that support the achievement of the company’s mission and vision in a way that’s aligned with the organization’s core values.

The business model is the critical bridge between the mission and vision and planned projects etc. that’s missing from traditional strategic plans today. The business model also acts as the thread of consistency linking an organization’s strategic plans over time.

Putting the business model into action and then testing whether it is the correct business model (i.e. it’s producing desired results) should be an organization’s strategic plan – FULL STOP.

With this in mind then, a better strategic plan outlines the mission, vision, values, value proposition, business model, desired performance results and outcomes, and proposed key projects required to put the business model into action. Each strategic planning period, an organization may choose to focus MORE on some parts of the business model but not to the exclusion of other parts of the model. Doing otherwise hobbles an organization’s ability to test whether the business model is producing the desired results.  

 

 

2 How a strategic plan should be used

As I mentioned earlier, most organizations tend to use the project list in their strategic plan as a big “to do” list. Some are better than others at executing the plan/completing the project list. In my experience, the one’s that fall behind in completing the established projects, tend to hide the strategic plan – as if it’s a reminder of what they thought they’d do but have failed to get done.

Other organizations tend to complete all the projects on their list blindly in the belief that getting them done automatically equates with moving their strategy forward. In many cases, these organizations continue working on planned projects even when a change in the business environment takes place that renders the project irrelevant. With project completion being their primary measure of whether the plan has been successful, it’s no wonder that many organizations make completing defined projects a high priority.

However, a strategic plan should be used in a far different way. Putting your business model into action and then testing whether it is in fact the correct business model is your only objective once the plan has been created. Projects that you believe are required to put the business model into action should be started however every quarter there should be a pause in the action to stop and reflect.

At this time, results should be reviewed and three questions should be asked and answered: (1) Are we executing the plan as planned? (i.e. Are we putting the business model into action effectively?); (2) Are we getting the results and outcomes we expect? (i.e. Is this the right business model?); and (3) Has anything changed with our customers and/or the business environment? (i.e. Has anything new happened that might cause us to change our business model and/or our test plan?).

If the answers to any of these questions indicate that a change is required then “the plan” should be adjusted accordingly. This includes changing the business model, re-prioritizing planned projects, and/or developing and implementing new activities and projects.

Organizations that take this more dynamic approach with their strategic plan and its execution often find that, by the end of the planning period, their business model has been refined, their priorities and projects have changed, and their business results exceed those achieved using the traditional approach to strategic plan utilization.

 

To achieve the kind of business performance and results organizations and business leaders want it is critical that they avoid becoming a victim of their strategic plan. The answer isn’t to avoid strategic planning/”the plan” completely – not having a strategic plan puts a company at unnecessary risk.

The key to avoiding becoming handcuffed by the plan is to change your definition of, and relationship with, the plan. If you re-orient your thinking to make your strategic plan the outline of your business model and how you intend to put it into action, and then focus strategy execution on testing and refining the plan, your strategic plan becomes a key tool that enables you to create the best business to deliver the results you want.

As soon as you look at strategic planning in this new, more dynamic and flexible way, it becomes natural to change the plan as needed – it’s just part of a test and improve cycle. Once you make this shift you’ll find that your strategic plan becomes a powerful tool that works for you rather than an overbearing taskmaster that handcuffs you and limits the success potential of your business.