STRATEGY DEVELOPMENT PROCESS
“Plans are useless. Planning is priceless”
Every organisation needs a strategy. Although it is possible to adopt a successful strategy purely by luck, the odds of developing a winning strategy are certainly increased by adopting a disciplined thinking process. It starts with strategic analysis about both the current situation and the future, then generates and evaluates alternatives that address key strategic questions, and ends with a clearly described strategy that is executed through action plans and measured to determine if it needs to evolve.
Our strategy has to answer the most important questions facing the business. We should ask our team, our advisors and our board/HQ for their input on these to ensure our strategy process includes the best thinking of all stakeholders.
Our questions should include the most urgent challenges as well as the important long term choices. Our strategic analysis should answer some of them – and we are likely to find some more important ones!
We will loop back on these questions once we have chosen our strategy to check our strategy addresses our most important challenges.
The starting point of any strategy. No matter how fast our business is changing, we will be able to predict the future better if we have a solid understanding of how the business works today. It provides the canvas on which future changes will be painted.
It is useful to structure our strategic analysis to understand today from 4 different perspectives:
Our strategy is how we will win in the future. For some businesses this could be 18 months, others could look out 10 years - it depends how rapidly our business environment is changing and how long a shadow strategic investments will cast.
The only certainty about seeing the future is that we will be wrong. Accepting this takes the pressure off, relax! The purpose of trying to see the future is to make better decisions today, not to be right.
Most of us need tools and techniques to help us build pictures of the future that combine imagination with structured logical thinking. Three of them are shared here:
These tools will help us position ourselves for the future.
“Skate to where the puck is going.”
Wayne Gretzky, record breaking NHL player
We choose our future when we make our strategy. And how can we make a choice without alternatives?
This is where the creative art of strategy comes in, as we have to imagine the possible ways we could grow our business in future. We can use creative brainstorming techniques to help us generate ideas.
Some of these ideas will be unattractive, for others we may be way behind competitors and unlikely to win a stern-chase. We can systematically evaluate all the opportunities and come up with the strategy we want to commit to.
After all the work of strategic analysis, developing and evaluating alternatives, the moment of truth is here!
We have to choose the direction we will lead the company.
It requires specific choices about what we will do, and what we will not do. This takes courage - the hardest decision for management is what NOT to do, causing their appetite often to be greater than their stomach can handle.
Once we have committed to a path, the action planning begins - what strategic initiatives must we drive, how will we measure success?
Our strategy is not executued by the CEO, the whole organisation needs to align behind it, cascading into communication, people decisions, budgets and functional plans.
Finally, the strategic development process is not something a company does once, then puts the plan in a drawer until next year. Digital innovation is causing the business environment to move faster and faster - strategy now needs to be a continuous process of discovery, reflection, and execution to keep up.