Five questions to help you build a strategy
Creating a strategy is a lot easier than you might think. It’s one of the steps in the planning process. We give you five questions to answer that will help you build your strategy.
Let’s first of all look at the steps associated with the planning process:
- Vision: It’s where you start and is the most abstract of the steps. Once clarified it becomes the guiding light toward which all your activities are directed.
- Mission: It’s what you do in your business to carry out your Vision.
- Goals: These are specific measurables that define what will exist when you’ve realised your Vision.
- Strategy: This is the thinking through of how you will achieve your Goals.
People make strategy much harder than it needs to be. Some focus too much on the tools: environmental scans, SWOT analyses, customer analyses, competitor analyses, financial modelling, and so on.
Others think it’s all about broad, conceptual, future-oriented, big picture stuff. Some think that strategy is what happens only when they think about changing direction.
At some level the reality is that strategy is about all those things, and you can’t do a satisfactory job with your analysis alone, or your big picture alone, or your changes alone. You have to do a bit of work on all of them.
Strategy is actually a lot more straightforward than it sounds. Our preferred approach is to develop a set of answers to five connecting questions.
The questions are designed to follow logically on from each other, and are as follows:
- What are our broad aspirations for our organisation & the concrete goals against which we can measure our progress?
- Across the potential field available to us, where will we choose to play and not play?
- In our chosen place to play, how will we choose to win against the competitors there?
- What capabilities are necessary to build and maintain to win in our chosen manner?
- What management systems are necessary to operate to build and maintain the key capabilities?
The trick is to get five answers that are consistent with one another and actually reinforce one another.
Aspirations & Goals to be a great international player and a Where to Play response that is domestic doesn’t match well with a How to Win on the basis of proprietary R&D — because the competitors with global aspirations will almost certainly out-invest and outflank you. Winning on the basis of superior distribution is unlikely to happen if you don’t have a concrete plan to build the Capabilities and a Management System to maintain them.
So where do you start?
Most organisations start at the top with some kind of mission/vision exercise that drives participants around the bend. The reason it drives them crazy is that it is extremely difficult to create a meaningful aspiration/mission/vision in the absence of some idea of Where to Play and How to Win. That is why those conversations tend to go around in circles with nobody knowing now to actually agree on anything. Any mission or vision will do when you don’t have a thought-through Where to Play or How to Win.
That said, if you think entirely about Where to Play and How to Win without consideration of Aspirations & Goals, you may end up with a strategy that is effective for its intended goal but isn’t something you would actually want!
What this means is that to create a strategy, you have to go over it again and again.
Think a little bit about Aspirations & Goals, then a little bit about Where to Play and How to Win, then back to Aspirations & Goals to check and modify, then down to Capabilities and Management Systems to check whether it is really doable, then back up again to modify accordingly.
While it may sound a bit daunting, going over it repeatedly like this actually makes strategy easier. It will save you from endless visioning exercises, misdirected SWOT analyses, and lots of heroically uninformed big thinking!
Crafting your strategy in relatively small and concrete chunks and honing the answers to the five questions through repetition will get you a better strategy, with much less pain and wasted time.
With thanks for the original article to Roger Martin
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