Don’t mention the strategy
A new approach can result in a meaningful strategy plan, rather than a worthless document that just collects dust
Moments before he was about to go into a meeting with the chief executive of a major retailer, an executive took Martin Reeves aside and told him not to mention strategy. A tricky ask, considering Reeves is a strategist (as well as being an author and member of The Boston Consulting Group’s strategy practice leadership team).
In a subsequent Ted Talk, Reeves referred to the incident and said that the “classical concept” of strategy can sometimes be questioned by executives, given companies can spend months analysing and planning, only for the plan to quickly become obsolete.
But, according to Reeves, companies need to move away from this view of strategy and take a wider view to find the strategy that is right for them. “What is strategy? It’s basically getting a job done. It’s a tool,” he said. “The job is winning competitively in a particular situation.”
A survey published last year by Strategy&, the strategy consulting firm owned by PwC, revealed that many companies are at sea when it comes to devising an appropriate strategy.
Only 37 per cent of the 6,000 executives surveyed felt their company had a well-defined strategy. One in five respondents said their company did not even have a list of strategic priorities to keep them focused.
The survey’s findings also indicated that, even where a strategy existed, leaders struggled to make the connection between the strategy and their day-to-day reality.
Understanding your strategy
For a strategy to be effective, everybody in an organisation needs to know:
- What it is
- Their role in implementing it
- What it means for them, specifically
As a leader, you need to be able to explain your strategy to your team in a short, succinct manner. If you can’t articulate it, how can you expect them to get behind it?
“Strategy is a tick-the-box exercise for far too many companies,” says strategic communications consultant and managing director of Broadly Speaking, Margaret E. Ward. “This approach creates a document that collects dust, but doesn’t really change anything.
“We find that CEOs and partners who really involve their executive team in both developing the strategy and communicating it to staff see the greatest positive change in direction and behaviour.”
So just how do you go from a set of goals and a plan for the type of company you want to be to a one-liner that distils all this intention in just a few words?
There are a number of strategy models to consider but, as a starting point, an interesting one is simply to think about a story and storytelling techniques, says Ward.
Writing in the Harvard Business Review (HBR), Alessandro Di Fiore, founder of the European Centre for Strategic Innovation, outlined this approach. During a strategy workshop for clients, he asked them to tell the story of a potential customer and the service the company and its products had to offer that customer.
“Once we reached agreement on the strategy story, we were then able to distil from it a 15-word statement that identified the job the company had to do and for whom,” he wrote.
A step-by-step approach
Let’s assume you don’t have a defined strategy for your business, but you want to develop one. According to a 2013 article by consulting firm McKinsey, a central building block of good strategy is understanding your starting point.
Next, McKinsey’s article notes, you need a point of view on how the future may unfold. “By combining insights into a company’s starting position with a perspective on the future, the company can develop and explore alternative ways to win,” the article says.
A HBR guide to strategy points out that a clear strategy statement results in “aligned behaviour, empowered employees and increased effectiveness”. According to the HBR guide, a good strategy has an objective that is precise, measurable and time-bound; a sense of scope (so selling what and to whom, for example); and an understanding of the company’s competitive advantages.
Understanding what sets you apart is key to developing a strong strategic plan.
Take fast-food giant McDonald’s, for example. In March 2017, it unveiled its Velocity Growth Plan. “Velocity makes the most of our competitive advantages, from our unmatched global scale to our iconic brand to our tremendous presence in local markets around the world,” the fast-food giant’s website notes.
McDonald’s strategic plan has a number of elements, such as retaining customers and converting casual customers into committed ones; driving growth through delivery; and using technology to improve its customers’ experience. For anyone reading the brief outline of the strategic plan that features on the fast-food chain’s website, it is clear – at a high-level at least – how McDonald’s intends to grow in a changing food market.
Ultimately, a good strategy is written in clear language; reflects your goals and the unique capabilities of your business; and can be understood quickly, believed and implemented by you and your team.
There are a number of models to think about when devising your strategy. But, amidst the jargon, don’t lose sight of what really matters: the kind of company you want to be, the products or services you want to sell (and to whom), the advantages you hold in your market and how that market is changing.
Only when you have a clear sense of these elements, should you consider some of the models that might help you to develop and implement your strategy, says Ward.
Here’s a snapshot, but she says there are plenty of other methodologies to consider:
- Zoom out/zoom in: In an article published last year, professional services firm Deloitte says that most companies have “remained loyal to the five-year plan as a basic framework”. As an alternative, Deloitte’s article explores the concept of a zoom out/zoom in approach to strategy, which sees companies consider both a very short-term and a very long-term horizon in their plan.
- Balanced scorecard: Another strategy management tool is the balanced scorecard approach, developed in the 1990s by business experts Robert Kaplan and David Norton. Boards tend to like this model as it’s commonly used and easily understood.
This model focuses on four key questions:
- How do customers see us?
- What must we excel at?
- Can we continue to improve and create value?
- How do we look to shareholders?
- Need-gap analysis: Think about the gap! A need-gap analysis is where a company looks at where it is now and where it wants to be, and then develops strategies to bridge the gap.
- Strategic horizons: This McKinsey model helps companies focus on growth and innovation. You concentrate on three different strategic horizons: core business, emerging opportunities and blue sky. This versatile approach is easily applied to most types of organisations, but is favoured by growth-focused companies who need to keep an eye on cash flow.
- The stakeholder model: In the stakeholder model, you focus on developing your strategy with different audiences and stakeholders in mind, such as staff, shareholders, customers, community and society/politicians. What’s in it for them?
Above all though, you need to communicate the strategy to your staff, says Ward. “The best strategy in the world will have no impact unless you really think about what you want your managers and teams to change in terms of the way they think, feel and do things. Then you need to clearly and consistently communicate with them – using many different channels – so they know they’re part of making the strategy a success.”
If you need to develop or communicate a strategy, we can help. Contact firstname.lastname@example.org for more information.