Although it’s one of the important steps in the planning process, creating an effective strategy is a lot easier than you might think. We show you how the answers to five interlinked questions will help you build one.
Let’s look at where strategy sits in the planning process:
- Vision: it’s where you start and it’s the most abstract of the steps. Once clarified, it becomes the guiding light toward which all your activities are directed.
- Mission: what you do in your business to carry out your vision.
- Goals: specific measurables that define what will exist when you’ve realised your vision.
- Strategy: the thinking through of how you will achieve your goals.
We tend to make putting together a 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 the broad, conceptual big picture stuff. Yet more think that strategy is what happens 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 just by focusing only on analysis, the big picture or changes. You have to do a bit of work on all of them.
It’s really a lot more straightforward than it sounds. Our preferred approach is to develop a set of answers to five interlinked questions. The questions, which cascade logically from the first to the last, 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 operate and not operate?
- In our chosen place of operation, 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 do we need 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, too. If you have aspirations and goals to operate internationally coupled with an actual operation that is only focused on the domestic market, this doesn’t match well with a strategy for winning against your competitors on the basis of proprietary R&D. This is because your 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 you capabilities and a management system to maintain them.
So where do you start?
Most organisations start at the top with some kind of mission and vision exercise that drives participants around the bend. The reason it drives them crazy is that it is extremely difficult to create a meaningful vision in the absence of some idea where they’re going to operate and how they’re going to succeed in getting there.
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 haven’t thought through the where or the how
It’s all about emphasis and repetition
What this all means is that to create an effective strategy, you have to keep coming back to it, to emphasise and repeat the process.
Think a little bit about your aspirations and goals, then a little bit about the where and the how, then back to aspirations and goals to check and modify, then focus on your capabilities and management systems to check whether it is really doable, then re-visit the first steps to modify accordingly.
While it may sound a bit daunting, this process of repetition actually makes strategy-building 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 iteration will get you a better strategy, with much less pain and wasted time.
Adapted from an article by Roger Martin, with thanks.
Want to read more of the same? Then click on the graphic below to receive a monthly digest direct to your inbox:
