We see many company strategies being something like this. "We are a well-known, respected, and recommended brand of XXX in the target groups of our market areas." or "Our business produces optimal financial results for all stakeholders."
That's great, but that should be quite obvious. If you want to make business you should keep your customers happy, and make money.
The important question is how do I get to the point, where we as a company want to be in the next 12-24-36 months? Strategy should be the guiding force of organizational leadership, directing the daily work of every member.
Strategy is a tool for leadership
The goal is to integrate the strategy process with daily operations and provide tools for effective change management. Strategy is a shared tool for leadership, managers, and the entire staff, where the fundamental tasks of leadership are:
- Lead, clarify, and focus the strategy for universal understanding
- Ensure the practical implementation of the strategy
Strategy manifests differently across functions but always as an action aiming in the same direction. Strategic leadership requires decision-making, deciding on choices and priorities is a strategic act. The responsibility for choices and their success always lies with effective leadership.
So what should you take into consideration when doing the strategy process?
- Preparation consists of clearing your mission, and vision. Analyzing the internal and external factors. Setting goals and objectives, deciding actions that will get us there, and how to measure it
- The implementation consists of organizing, communicating, motivating, and supervising that the strategic actions are being done
- This loop should be monthly evaluated by leadership and at least every quarter updated analysis
An example of a strategy framework
Now, let's have a look at an example of a framework that can be used to get an extremely easy, and practical strategy that can be implemented, followed, and updated easily with everyone in the organization participating and engaging in that preparation.
Start with the mission, values, and vision. To answer the questions; Why do we exist? What do we believe in? What will become of us? Next, analyze the internal and external factors with the Balance Scorecard framework. You need to analyze both the inner and outer factors of your organization that affect your path to vision.
- Capability (Motivation, Know-how, Working ability) - To reach our vision, how do we keep up with our capability, and evolve?
- Efficiency (Organization, Cooperation, Processes) In which processes do we need to excel to satisfy our customers and stakeholders?
- Customers (NPS, market share, profitability per customer) To reach our vision, how do we appear to the customers?
- Financials (Balance sheet, income statement) To reach our vision, how do we appear to the stakeholders?
To get the inner factors you need to involve your employees in the strategy work and ask them what they feel about the work.
If you only measure outer factors, your strategy will be incomplete, and can not be implemented.
For an organization's inner data, and analysis you can use for example Priorit.io.
After analyzing each segment, you have to decide what goal you need to reach from each segment of the BSC. Then write down, or see from the analysis. Three objectives per segment you need to achieve to reach the selected goal.
If you are using Priorit.io your results are indexed from 0-100, then goals could be for example: Motivation - 59 | Know-How - 45 | Working ability - 38, then select a goal you want to reach your vision e.g. Motivation - 65 | Know-How - 65 | Working ability - 65.
Select suitable objectives
Then select three objectives from each segment that are crucial to reaching your vision: For example, if using Prioritio you can select these from the SWOT analysis. E.g. for Know-How
- Upgrade our leadership tools to match our growth vision
- Apply growth, and learning paths by teams and roles
- Individual development plans correlate with our growth vision
Repeat the process for each segment
When ready, this will be your "Strategy - Control Panel". The next step is to define your actions and metrics. What are the concrete steps to make the vision come true? Again, from each sub-segment select the key objective, key metric, starting level of the metric, target level, which process belongs to which, and who owns the process. Repeat this to all sub-segments.
Involve your whole organization to prioritize these actions. Remember management always makes final decisions and is responsible for the process, but everyone should be involved for the best outcome.
Then the rest is just execution. If you have a management team in place, evaluate progress, and results of your strategy monthly. Update your analysis every quarter. Make adjustments, and changes accordingly.