Strategy is the cornerstone for business success.
Strategy connects the present to the future.
Strategy brings focus and meaning to your tactics.
Strategy involves making decisions about the future and predicting the outcomes of those decisions.
Strategy is all these and complex too.
If strategy is so important, why is it one of business’s most confusing and misunderstood disciplines?
Because strategy requires understanding, assessing, and weighing the importance of multiple variables, now and in the future.
Reversing these challenges and understanding the strategic process starts with deconstructing the process into its essential elements.
“Simplicity is the ultimate sophistication.”
The Strategic Process progresses from Strategic Thinking to Strategic Planning to Strategic Decisions.
Strategic thinking > Strategic Planning > Strategic Decisions
Since strategy connects the present to the future, there should be a tool that helps guide and connect the parts. The Strategy Ratchet can be a helpful framework for seeing your strategy through to completion.
Like a Ratchet that turns and tightens in only one direction, a strategy should proceed continuously, moving from Identify to Analyze, to Create, and then Implement. With each loop and iteration, the strategy should align more tightly with your Vision.
Identify. (where are we?)
Complete honesty and transparency are needed here. No sugar coating. No Rose-colored glass, just the good, the bad, and the ugly. No problem-solving at this stage; identify where gaps exist. Time to see what’s “under the hood.” Look at products and services, operations, business financials, sales and marketing plans, market share, and IT. How do our products and services compare to our competitors? Is our present direction aligned with our Vision?
Analyze. (how far off are we?)
Time to quantify the problems and gaps identified. Look for sales, revenue, new products and services development gaps, and customer and employee satisfaction scores. Is market share growing or shrinking? By how much? What about financial performance, gross margins, profitability, and net income? How efficient are operations? What are gross margins, net income, and EBITDA?
Create. (what new ideas can close the gap?)
Moving forward requires seeing new possibilities. What future state and results are desired? What steps need to be taken to reach the desired goal? What needs to change to close the gaps identified in the Analyze step? Ideas and possibilities are endless; seeing them requires looking across disciplines to bring new insights and perspectives to problems. Breaking down the silos of conventional thought and replacing it with awareness and observation is a perfect place to start.
“Vision without Execution is hallucination.”
Implement. (how is action created?)
Strategies fail to reach their targets due to a lack of action and execution, not a lack of Vision and Mission. Continuous execution is essential. Strategy is a Team effort, so alignment, accountability, and rhythm are needed. Align actions by planning backward and executing forwards. Start with the goal and work backward to milestones and, finally, tasks that are accomplished daily. Accountability is required and can be used as a learning and training process. Celebrate team successes. At the same time, learn why goals were not met so performance can be improved during the next iteration. Finally, let the team establish their rhythm and develop a dashboard with key performance metrics to track progress.
Give the Strategy Ratchet a try. See if it helps you understand better this complex and confusing topic. Remember, too, your strategy must continue beyond Vision, Goals, and Objectives; execution and action bring it to life. This quote from VanGogh sums it all up the best:
“Great things are done by a series of small things brought together.”