The Strategy Series - Part 2
The Strategy Series - Part 2
An Insight into: Developing a strategy
Following on from my first article “Set and forget might be great for products, but not for strategy” this article looks at step one in the strategy development process.
Developing a strategy – reflect, review, think and align.
This phase is usually taken before the beginning of a new financial year and can take a number of days to complete. The two words “develop strategy” sound simple but actually describe a huge amount of work. Obviously, the level and type of work required will vary according to the particular circumstances of a business, its size, maturity, its challenges etc. but I believe there are some fundamentals all organisations should consider and these are outlined below.
Data collection and analysis
The first and very important step is to collect information and data that will help inform the company’s thinking and decision making. I tend to ask for this to be done prior to any workshops and will ask the team to collect, review and report back on the following:
- Environment scan – this involves researching and documenting what is happening in the world around the business (competition, technology trends, economic factors, social changes etc). Identify the threats and opportunities.
- Financials, KPIs and any other relevant data – collect and analyse as much relevant data as they can. The key to this is the analysis identifying all the things that will help to develop the direction and focus for the coming 12 months.
Strategy development workshops
Having analysed the data and prepared their pre-work, the next step is to get the team together in a workshop environment to assess every aspect of the business to help inform the strategy.
It is important to think carefully about who should attend this. I always think the more people the better, and often recommend that members of the board, investors, the leadership team and any good strategic thinkers within the organisation attend the session(s). A broad set of views and contributions is a positive thing and, in my experience, makes it more likely to achieve an aligned strategy.
As you might expect, I would always recommend using a facilitator for these sessions. Doing so will ensure the session is carefully structured, is well prepared and most importantly, it will allow every member of your team to fully engage in the process and the discussions.
The specific content of any workshops will vary for each company but the critical elements I think should form the foundations are:
- Mission and vision – look at the statements you have and get the team to debate and discuss whether they are still valid, appropriate and reflect the overall direction of the organisation. If not, tweak them.
- Business model review – get the team to map their business model and then ask questions along the lines of: ‘Do you have the right business model?’; ‘Do you need to adapt it to changes in the environment around you?’; ‘Where are you strong?’; ‘Where are you weak?’; ‘Are there any gaps?’; ‘Are there assumptions in the model that need testing?’. Importantly, document peoples’ thoughts.
- Opportunities and threats – based on the environment scanning, identify any threats and opportunities and document these.
- Lessons learnt – get the team to share what lessons were learnt last year – what was good, what needs improvement? Celebrate the successes.
- Risks – run a pre-mortem exercise to identify critical risks that need to be monitored and mitigated.
Output and next steps
The output from this step will be:
- A clear and aligned vision and mission;
- Clarity around the business model required to deliver these;
- A good understanding of opportunities and threats that need exploiting or mitigating;
- A list of learnings from the previous year;
- A list of the critical risks the team think require mitigation and monitoring.
All of this output is incredibly helpful but this is not the end. The information created now needs to be carefully reviewed and then taken into the next phase where the same team will begin turning ideas into actions. This will be the content of my next article and will include setting objectives, prioritising them, agreeing key measures, building initiative plans and setting up the necessary processes for managing and reviewing the plans.
See you then,
The Innovation Practice sets out to help businesses untangle strategic problems through facilitated workshops and mentoring. It was founded by Ludo Chapman, whose motto is “I am a facilitator, not a consultant.”
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