How do we know we have a strategy? What does strategy look like? What does “strategic” mean? If something is not strategic what is it?
Strategy describes the planned journey from where you are to a place you want to go. In the end, the value of the description is measured by the outcomes resulting from strategy’s execution. In other words, did we get the results we were seeking? What properties does a strategy need in order to be executed?
The strategy journey takes time to deploy and execute. As the journey unfolds, the landscape in which it operates changes. Some changes are brought about by the strategy. Most changes occur because of factors outside the control of the strategy. Technology, competition, shifts in customer wants or needs, economic conditions and other environmental factors introduce change. Many changes can be anticipated but not all can be forecast. Strategy needs components that allow adaptation to the changes along the journey.
An executable strategy has three components. The first is a structure. Structure is the form most of us are probably familiar with when we think strategy. Structure can be over a hundred pages of text or as short as a single page. The structure may vary in granularity. Structure can be captured on a graphic presentation or in a text document. Structure is more than a list of prospective accomplishments with a budget attached. The purpose of structure is to define a roadmap, with constraints, leading to the strategy’s end state. Structure also provides a framework for decision-making by making explicit the options available to leaders.
The second component of strategy is process. If structure is the roadmap, process is the vehicle for execution. Strategy is not an event. It is an ongoing discipline of refining a plan for progress supported by a business case, testing the business case through execution, observing progress and adjusting the plan based on knowledge gained through experience. Strategy requires the coordination and cooperation of different parts of an organization. The organization needs a process to efficiently remain aligned with the strategy. Resource management must be flexible enough to redeploy capital and talent as the plan is refined through its confrontation with reality.
The final component of strategy is governance. Governance is the rules of the road, defining who makes decisions, how often the decisions are made and what those decisions are. Lack of clarity in decision rights leads to waste. Time is a resource that cannot be recovered, and capital resources are often consumed in lockstep with time. Decisions made by the wrong person or at an unexpected time can result in confusion. Decisions made ad hoc may not be well communicated. Another type of decision is one that should have been made but is not. An example of this is the situation where the effort should have been discontinued and resources redeployed against more promising projects.
Leaders need to consider whether their strategy has the vibrancy to make the journey to the destination they are pursuing. Some counterfeits include confusing objective setting or budgeting with strategy. One symptom of a problem is when the most pressing question is centered on what the form is that needs to be completed or spending non-value added time fitting the strategy into a presentation deck. Frequent updates without time to realize progress can also smother an otherwise viable strategy.
Essential to the development and deployment of strategy is a leadership forum that promotes critical thinking. Presenting conflicting ideas in an environment that is focused on what is right and not who is bright reduces the bias. Past pathways to success may no longer be open and while experience provides context, leaders must allow existing models to be challenged and new ideas considered. As leaders work to shape a strategy into a roadmap for learning that supports decision-making they can increase the engagement of employees, leveraging and developing talent.
I suggest being consistent in the process, structure, and governance used in developing and deploying strategy. Sitting down each year with a blank sheet of paper to “set objectives” can result in a lack of alignment and take away from the critical thinking needed to summarize learning from the past year and gain alignment for the coming year. The components can change, but the change should be orderly, conducted in a way that is understood by all stakeholders.
Don’t run out and try changing things because of what you read in this blog or any other source. Rather take some time with your executive team to consider some of the questions posed here, then decide where the most value would be generated if you do change. Think it through. Slow it down so it sticks.
© 2016 Differentiating Strategies, LLC