The Hallmarks of a Strategy
Strategy is a word that is often over-used so much that it has become poorly defined and understood. You can have a ‘strategy’ to buy your groceries before you buy alcohol … it can be a ‘strategy’ to start a meeting on time… the term has become watered down and flexible in it’s interpretation. But what are the hallmarks of a Strategy – that is, Strategy with a capital S? Part of my job is to write Strategies, and so I wanted to give my view – but do bear in mind that in the context of this article, I am talking about writing Strategies and not a Strategic Plan or Strategic Implementation Plan – those would be follow-up documents on how to achieve the Strategy.
It seems obvious
The first, and probably most important hallmark of a Strategy is that it seems obvious. Good design has an element of inevitability – as if it could not have been done any other way. A well developed Strategy should appear to the staff at the company as if they could have written it themselves (see the last point for more detail on this). Unless you are completely changing the company direction, the Strategy should deeply understand the context of the business, should embrace the mission, vision and principles, should embrace the why as well as the what of the business.
For people who work at the company, the Strategy should have such a deep connection with the business, the aims and objectives and the history – that it seems that it is the obvious thing to do. If it does not, then more work needs to be done with the staff to ensure that they accept and embrace the changes.
It is simple
An effective strategy must be simple. If it is complex, prescriptive and detailed, it makes it harder to achieve. I have made the mistake over my career of writing 100+ page Strategies – but this is not a Strategy, it is a plan to achieve the strategy. Like a good advertising slogan, a few words is often much more powerful than a complex document.
Part of simplicity is also digestability – the Strategy needs to be able to be understood and embraced by staff of all levels in the organisation. Simplicity does not just mean it is shorter – although that can help – but a complex Strategy is at risk of not working if there are people who do not understand the details and intricacies.
It defines a compelling vision
The vision that the Strategy defines must be of a nature that people within the organisation should feel that this is the best (or only) way for the company/department to go. Aligned to the requirement for the Strategy to be obvious, it should also define a vision that people want to follow.
Commonly, Strategies have a 5, 7 or 10 year horizon. In almost all industries, particularly with technology, what will exist in 5 years time will not exist when the Strategy is being written. The future will be fuzzy, and define a direction that has some wiggle room for changes. A Strategy will lay out the direction the organisation is heading towards – a vision that is shared and desired.
It is transformative
You don’t need to be world class at mundane business practices that are not your distinctive competence, but you must maintain standards of work equal to that of your competitors. That is, the organization must maintain parity with competitors in the ordinary and mundane matters.
A key point, though, is the mistake often made by parents when their C-grade child starts failing a class – they get a tutor for that subject to bring the child back up to the average. What should really be done is to focus a tutor on what they are already good at, what they love doing, where their passion is. Make them better, not average. Focus on improving the A-grade areas, and outsource the rest! The same with a business – yes you need to look after your staff – but fixing a poorly performing product may not be the right thing to do – focus on what you really are good at!
It is not SMART
Controversial for some, but I believe that a strategy should not be; Specific, Measurable, Achievable, Realistic and Time Bound. A strategy should go further, and not be bound by traditional objectives that all other business planning and people management should.
This is a strategy, and should not be tactical. Strategies define goals; tactics define actions to achieve the strategies
Not Specific – fine grained detail about what will be achieved will either be a limit, or based on what has been done before. Specific activities can follow from the Strategy, but should not be in the Strategy.
Not Measurable – if you set specific targets, this will dictate the pace of the business. If the target is set for 10% growth a year, and you are only achieving 2% – people may ignore the target as unachievable. Conversely, if the business grows by 10% in the first month, will people continue to put in the same effort all year?
Not Achievable – set a direction and vision that is just out of reach, a bit of a stretch! Of course there will be a requirement that there is a hope that the Strategy is completely achievable, but there must be an expectation that the Strategy is pushing the boundaries and trying to exceed.
Not Realistic – the pace of business – and in particular, technology – is so rapid, that goalposts can move (often making it possible to achieve more, sooner). Trying to make a Strategy “realistic” can mean that it is not stretched enough.
It is owned by management
The day to day “keeping the lights on” of the business tends to drag people’s time and efforts back to a status quo of doing things in the same way as before. People are comfortable in their work, and many people will fight to do tedious work in an ineffective way, before changing to new ways of working. Management need to fully own the Strategy, and pursue it in their daily work – making decisions and providing guidance in the direction of the strategic vision. This can’t be done if management do not embody the Strategy, if management slip back into the old path of the business.
Management must fully understand the Strategy – and not just the brochure version, or the “plan on a page” – but all the motivations, all the influences and drivers, and all the un-written intentions.
It is based on multi-dimensional analysis
It could be created bottom-up, top-down, inside-out, customer-driven, from as-is, working towards to-be – but in essence, it must be based on analysis. An understanding of your competitors and unique offerings, what processes and systems are pain points,and what are your people good at? You need to understand what needs to be fixed, what needs to be enhanced, where you can surpass the competition, what opportunities are there to head for.
Bottom-up – what are your systems and processes, how do you currently do things, and can this be improved or does this offer differentiating capabilities to disrupt?
Top-down – what are the business drivers and desires, what are you trying to achieve in the business, and how do you need to change to achieve this?
Inside-out – how do you work to help your customers, think beyond internal processes and on to product and marketing – how are you going to use your internal capabilities to provide new features or products for your customers?
Customer driven -what do the customers demand? What are their expectations and desires? Are you keeping up with market forces for services that the customers expect?
As-is – what is your current way of working, and how can it be improved? How do you do things now – is this efficient and capable, or is there a requirement to change? What are the problems you currently have, what needs to be fixed? Other than products, process and practice, is there any part of culture that needs to change?
To-be – where do you want to be? Is your differentiation lower price, or a better product/service? Do you need to develop your brand and reputation, your supply chain efficiency and speed, your product design or packaging?
You need to understand the obstacles to overcome them, recognise the need to address it,understand the market to be able to respond.
It can flex when required
Market conditions change, and a flexible Strategy – whilst still progressing towards the vision – will be more successful than a Strategy that believes it can outline exactly what the business is going to do over the next 10 years.
Opportunities present themselves – a competitor makes an error, or builds a desire that they cannot address (but you can), supplies or resources can suddenly change price or availability – even public events and a change in public opinion can have dramatic changes on a business.
It is developed inclusively
If you have been skimming this article so far, this is the bit you need to read. A Strategy cannot be just purchased off a shelf as a catalogue item, do a bit of search and replace on the company name, and then frame it in the reception. Many times that does happen, and I have seen organisations spend hundreds of thousands of dollars on shelfware that makes senior management and stockholders happy, but most people have no knowledge of it.
To make inroads into a Strategy that is deeply understood and shared by all parts of the organisation, it needs to be developed with a diverse group of thinkers – not just by management. Including staff who are on the ground can be an enormous help, not only to create a Strategy in the first place, but also to ensure a successful uptake and engagement with the finished Strategy.
Take for example a question to ask; “How would you like to address the inefficiencies caused by using paper forms, such as those to do interdepartmental tasks like approving task allocation?” A question like that will begin a thought process in the staff member to a) consider that paper processes are inefficient, b) paper forms are not the best way to do this, c) there can be better ways to communicate with other departments, d) allocating tasks could be done more efficiently – just for a start. The questions themselves can instigate change, and start to break through the usual way of working.
Build with people, not just for people
The process of building a Strategy must include people in all parts of the business. These are the people who do tasks all day and every day, engage with customers and suppliers – and may even have knowledge (or contacts) about competitors. These insights and ground roots information sources can, and should, influence strategy – looping back to the top point, making it obvious.
