Refining the Emerging Strategy

Once the strategic information has been analysed and the strategy model has been created it is time to review and refine it.

This review is especially important after the first pass of the analysis phase of the process.  This is to validate the results and make any amendments to the emerging strategy model.

Once the basic structure of the business strategy has been approved by the strategy team, the process of reviewing the strategy model should continue to refine it.  At this point, we seek to create depth to the strategic plan by working on the ‘hows’ as well as the ‘whats’.  In other words, where there is an outcome that is not supported by activities, we will seek to understand what steps need to be taken in order to achieve the desired outcome.

In addition, we use various tools and techniques, such as the SWOT and PEST analysis. These help to elicit more specific information that is pertinent to the development or implementation of the business strategy.  Some of this information will emerge naturally from the process, including strengths and weaknesses.  Every business has weaknesses. Weaknesses are just things that the organisation needs to improve. Consequently, they should be embraced and not ignored or sweep under the carpet.  It is useful to always turn weaknesses into activities designed to correct them.  We prioritise them first to ensure we focus on areas that will have the greatest positive impact on the business.

The other important element of building a sustainable strategy is to identify the strengths of the organisation. Next we ensure that they are aligned with and support the business’ goals and objectives.

In summary, this phase of the strategy creation focuses on clarifying, refining and expand upon the information gathered during the initial process of obtaining strategic information.  In addition, it will develop options and ideas regarding how to attain the organisations goals and objectives.  This will ultimately lead to a business plan with clear activities connected to outcomes and ultimately to attaining the organisations goals and vision.

Analysing Strategic Data

The ‘strategy maps’ that are generated can often become very complex with a large number of statements linked together in many different ways. To make sense of the data, we use a software package that has been specifically developed for the purpose.  It is used to identify patterns in the causal maps. These patterns help to identify the basic building blocks of the strategy model – Goals, Objectives, Issues and Activities, thus helping to build the strategy model.

Identifying Key Concepts

The diagrams below show three basic patterns or structures that help us to identify the key concepts within the strategic data.  Here, the shape of the pattern in the data, along with the context in which the statement is made determines where it fits in the strategy model.

The tear-drop shape on the left will tend to be an outcome of some type (e.g. objective or goal) with lots of other elements supporting it.  The shape in the middle is a pivot point and will tend to be an activity or an issue.  The inverted tear-drop shape on the right is most likely to be a key activity (e.g. a project) that will have an impact on a lot of other elements.

While this may look simple it actually takes a great deal of expertise to analyse the strategic data to create the strategy model.  This is where our experience and knowledge comes into its own as we are able to interpret the information in a way that extracts the most important elements of the strategic data to build a strong strategy for your business.

The future success of your organisation depends on effective strategic planning.

Strategic planning is the process of establishing and documenting a direction of your organisation by envisioning where you want your business to be in the future as well as assessing where it is now.

This leads to the creation of a formal document – the strategic plan – that lays out the company’s views and goals for the future and the action plans you will use to move your organisation from where it is to where you want it to be.

The Structure of the Strategic Plan

The structure of the strategic plan is shown in the diagram where we can see that everything is aligned to help the organisation achieve its strategic goals and vision.

Here we can how the strategic goals are supported by organisational goals and objectives. The strategic activities should be aligned with the objectives, operational goals, etc. It is important that people understand that the activities are being undertaken to achieve the desired outcomes.

At a lower level (not shown in the diagram), strategic activities will be deconstructed into detailed projects and actions. This will form the basis of the business plan. and will set out what needs to be done to attain the organisations goals and vision.

Advantages of Strategic Planning

Focusing on the long-term strategy of your business is essential. Strategic planning is as important as having a business plan and can lead to the success of your business. You and your employees will understand the current status of the company, productivity will increase as everyone works toward achieving the business goals and will put it in a better position to address any potential issues that may come up in the future.

An increasing number of companies use strategic planning to formulate and implement effective decisions. While planning requires a significant amount of time, effort, and money, a well-thought-out strategic plan efficiently fosters company growth, goal achievement, and employee satisfaction because it makes it clear to everyone where it is going and what needs to be done to get there.

This means that management will  have a clear understanding of what you want to accomplish and how you are going to achieve that. Communicating this clearly and involving people from all levels in the organisation in the process has many advantages including improved motivation and commitment leading to increased productivity and efficiency.

Involve People

Involving as many people as possible in the process plays an important role in the successful implementation of the plan. This is not to say they everyone needs to be involved at every stage.  For example, senior management should be involved in envisioning the future – setting the goals and vison. People at the operational level will have an important input to understanding what needs to be done to achieve the long-term goals. The key is to ensure that the people with the knowledge and skills are involved at the correct phase in the development of the strategic plan.

Our strategy creation process has been specifically designed to encourage participation by all of the relevant people in the organisation.  It also creates causal links among each of the elements of the plan which helps build the strategy model shown in the above diagram.

Implementing the Strategic Plan

Creating the strategic plan is not the end, it is just the beginning. The most important part of the strategic planning process is not creating the plan, it is implementing the plan.  This requires commitment to and focus on carrying out the strategic plan from everyone in the organisation.  Ensuring that the strategic plan is used as the foundation for decision making and activities in the organisation means that people will continue to focus on its direction and goals.

A strategic plan is a living document that should be updated on a regular basis as you learn from implementing it and also as you react to changes in the external environment.  There is no predefined timetable for updating your strategic plan – it will depend on your organisation and the market in which it operates. However, reviewing and evaluating your strategic plan regularly (at least one a year) will help keep you on track to achieving your goals.

Reviewing your strategic plan involved testing the assumptions made when developing your strategic plan, checking to determine whether those assumptions were correct.  For example, what you thought would be challenges and opportunities when the plan was created may not be the same now. It is important that you do not become too attached to your plan. Don’t be afraid to change any part of the strategic plan if your find that assumptions are wrong or outside factors are having a bigger impact on your business than you initially thought.

What is a Strategic Objective?

Strategic Objectives describes what the organisation want to achieve in the short to medium term and serve as stepping stones for attaining its Goals.
Objectives can be categorised into long term (between one and three years) and short-term (up to one year).  Long -term objectives tend to be directly linked to attaining the organisations goals.

Long-term objectives will often be broken down into annual objectives or outcomes.  These are linked to the next level which ultimately leads to the attainment of the larger, more ambitious, objectives. This ultimately leads to achieving the organisations goals and vision.

Once you have defined your annual objectives, you might break each one down further into short-term objectives. These define the actions and outcomes for the next three months that will help you on the way to achieving your long-term objectives and goals. The plans for achieving your short-term goals are your action plans.

This is akin to breaking a large, complex, task into smaller tasks that are more manageable and/or can be allocated to different people and/or departments.

As shown in the diagram, it is important to ensure that the various levels of objectives are linked together and ultimately to attaining one or more Goals.

In addition, breaking a large objective or goal into smaller, more manageable chunks can also mean that they can be directly linked to the outcomes of individual activities.

As with goals, it is important that, where possible, we apply the SMART criteria to each of our objectives. This will ensure that they are clear to everyone involved in the activities leading to the objective and that their progress can be monitored.

What is a Strategic Goal?

Strategic goals describe what the organisation wants to accomplish in the longer-term. They provide a sense of direction, motivation, a clear focus, and clarify importance.

Strategic goals drill down to a level below the vision and they are desirable outcomes for the business in themselves. In addition, strategic goals link directly to achieving the organisation’s long-term Vision.  They are usually set three to five years into the future and should act as a focal point for all of the activities defined in the business plan. 

Strategic goals should also be deconstructed into operational goals that relate to the organisation as a whole, including departments, employees, customers and other stakeholders.  Operational goals will normally be more short-term in nature and will be organised into specific areas that require focus. This includes operating efficiency, profit, production, service delivery, customer satisfaction, marketing, growth, sustainability, etc.

Management must effectively communicate both the operational and strategic goals to the entire organisation. This should be done in a way that encourages and empowers people to work towards achieving them.

Strategic goals provide direction to both the management team and to employees. Consequently, they set expectations and help decision making in the organisation.

Strategic goals will tend to be fairly broad in scope. For example, a strategic goal may be to improve profitability. This will be supported by operational goals that relate to how the company intends to improve profitability. In this example, profit is driven by a combination of revenue and costs. We may then set goals to increase revenue and reduce costs.

Goals are also internal. Departments such as sales and marketing have individual goals to meet. For instance, the company decides how many units need to be sold by each salesperson to meet its profit expectations. In turn, the salespeople are encouraged to meet sales quotas.

Examples of strategic goals:

“To increase our market share in the sustainable energy industry from 10% to 20% within the next three years through the development and launch of innovative new products and services.”.

“Increase profit by 10% over the next three years by expanding into new international markets and launching a new line of innovative products.”

“To increase market share in the European market by 15% within the next three years by expanding our distribution network and launching new product lines in key markets.”

Be SMART

All of the above goals conform to the SMART criteria which means that they are quantifiable so that their progress can be monitored and their attainment (or non-attainment) can be clearly measured at the end of the specified period.

What is a Vision Statement?

A vision statement describes what you envision the future of your organisation to be.

A strategic vision is the aspirations that the owners / senior decision makers have for their organisation.  As such, it paints a picture of the future which should be communicates to all stakeholders in an inspirational manner.

Since the strategic vision is outside the normal planning window, there is no need to have a clear understanding of how to achieve it. Rather, it should serve as a destination that ensures the organisation is always heading in the correct direction.

A carefully crafted vision statement will communicate your aspirations for the organisation to people in a clear and memorable way, giving them a sense of clear direction and focus.  It should inspire your people to think beyond their day-to-day activities and to understand how they can help the organisation to move from where it is to where you want it to be.  This will help to motivate them to concentrate their efforts on activities that will help the organisation attain its vision.  It will also serve as a filter for making important decisions, ensuring that everyone is pulling in the same direction.

The strategic vision should remain consistent through the entire organisation.  This means that while different parts of an organisation may have their own goals, they should all be linked to and focused on achieving the overarching vision of the organisation as whole.

An inspiring vision statement should have thee key characteristics:

1)  It needs to state where the company wants to be in the distant future,

2) It must be aligned with the organisation’s purpose, and

3)  It must inspire excitement and motivation within the organisation

Finally, a vision statement should be reviewed on a regular basis (usually annually) in order to ensure it is still relevant in terms of the organisation’s purpose as well as the internal and external environment and with the way you envision the future of the organisation.