While many organizations fall down trying to translate their strategy into action, almost as many don’t have a strategy to begin with. They think they do, but what they have are lots of plans and ideas for activity.
Don’t feel bad if you aren’t sure. You aren’t alone.
At the simplest level, the strategy is what and the plans are how. What you want to be vs. how you will get there and how you will deliver the goods until you get there. Defining your future, determining your approach, positioning yourself for success vs. determining who needs to do what and when in order to get there. Think of strategy as determining what you want your organization to become.
The first step in developing a strategy is to establish your overall driving force. The singularity is important. This does not mean narrow; it does mean focused. The singularity provides the tie-breaker when faced with conflicting alternatives. The singularity can also open doors. Are you driven to serve a particular market? To deliver a family of products? To exploit a specific technology? To leverage a capability? These aren’t the only choices but should help you see the impact of your choice. If you are clear about wanting to exploit a capability, you will follow it beyond existing products and beyond current markets. If you are driven by the market, you will develop additional products or services to meet the needs of that market. A clear decision about driving force makes it easier to establish your mission and to relay that mission and its significance throughout your organization.
Your driving force must be supported by a strategic framework. There are three general perspectives to consider: customer, internal and financial.
- Customer’s Perspective
- What will the customers see?
- What products and services will you offer?
- What is the market for these?
- Internal Perspective
- What processes will you need to be really good at?
- What capabilities will your employees need?
- What facilities, equipment, information systems, etc., will you need?
- Financial Perspective
- What will success look like to your shareholders or donors?
- What will your profit, revenue, size, etc., be?
- What kind of investment would be expected?
Once you answer these and similar questions, especially the interdependencies among them, you will have a strategic framework for planning and making decisions. And inevitably, you will uncover a host of issues because what you want to be able to do and what you currently are capable of doing are not likely to be the same, nor should they be if you are constantly raising the bar and preparing for the future. Addressing these issues is usually the difference between success and struggle.
Organizations that try to strategize often fall down in one of three areas. The first involves not completing the strategic process, in particular, not determining what the organization needs to look like internally in order to deliver the products and services suggested by a new vision and constrained by reality. The second involves ignoring strategic issues and not creating plans to become the organization defined by the strategic framework, and third, not communicating the strategy sufficiently to align the organization in support.
An Incomplete Framework
Organizations that don’t flesh out the strategic framework often skip the internal perspective entirely or may ignore many of the interdependencies among the three perspectives. It isn’t uncommon to decide on products or services, figure out the finances, and leave the organization scrambling to deliver. Do you know what capabilities your organization needs to develop?
Ignoring Strategic Issues
Formulating a strategy is about looking into the future and defining the organization that you want to become. As a result, by definition, your plans need to include efforts to become that organization simultaneously with delivering the goods today. Ignoring this developmental component has the same impact as never ferreting out the gap between current state and future state to begin with: your organization will scramble to deliver. Do you know how your organization is going to develop the capabilities it needs?
Not Communicating Strategy
People think of strategy as high level stuff and often fail to communicate these important decisions to the organization. The reality is that strategic decisions are being made throughout your organization all of the time. These decisions involve customer management, product direction, resource allocation, employee development, hiring decisions, facility maintenance, supplier relationships, contracts, and much more. A coherent strategy can be communicated effectively and it must be if employees are to make informed decisions.
Last But Not Least
A strategy needs to be alive – monitored and tweaked. While one of the attributes of a strategic goal or initiative versus an operational goal or initiative is usually its stability, a strategy is only as stable as its underlying assumptions. Given the fast pace of change these days, organizations must develop pretty straight-forward strategies and strategy management techniques that will allow them to adapt without upsetting the apple cart and yanking the organization around mercilessly.