The top 10 components of successful strategies
It’s that time of the year when people start to think strategically. Logically there is no reason for this. The change of the year makes no difference. Emotionally though we are on safer ground. You want to think strategically? You want to wrap it up in a New Year’s resolution? You know it makes no more sense to do this now rather than on April 1st? So what – go ahead anyway.
Business leaders use this time in the same way that individuals do. I offer as evidence to support this that for the past dozen or so years we see a spike in interest in the topic at this time.
Many people in business think they are strategists and largely they are right and wrong.
Right in that we all have some facility in developing a strategy (definition to follow) andwrong in that even though we have the ability to hear we are not as a result great listeners.
So developing a strategy is a discipline. Perhaps it is not as recognised a discipline as those of us who toil in this area would like. The purpose of this brief note is to give you our definition of a strategy and also to tell you the components that (if Harold McMillan’s “events” do not interfere) will lead to success.
Strategy definition: A strategy is a narrative supported by ideas, data and a plan. The narrative must be beautifully constructed. If it were a flag you would want to salute it.
Strategy users: Strategies should address customers, investors, and workers. Increasingly external partners are a fourth target group.
Strategy creation: To develop a strategy you need to fuse analysis (market, product, geography, current state, adjacent activities, data etc.) with aspirations (dreams, big ideas, headlines, major plays, political and technological trends etc.).The analytics and the aspiration may contradict each other. There are tactics but no set method for getting to a point of agreement between the two. You need to work it out with your team. If you cannot agree a way forward then your team should choose a direction together with scenarios that would be pursued should certain events happen.
Strategy contents: A successful strategy must be written, used every day and memorable. Here we offer our top 10 must haves in any strategy:
- A beautifully expressed and brief statement summarising the strategy. This can be a vision, a mission or merely one or more strategy statements
- A budget
- Change management that supports the implementation and secures hearts and minds
- Clear and powerful communications that may include videos, posters, websites, screensavers, MS Office suite templates, pens, USBs, town-halls
- Risk analysis and scenarios
- A dashboard that shows management how the business is performing against each of the main strategic objectives
- Business cases. Do not be tempted to skip this difficult and sometimes subjective activity. If your strategy is not supported by a business case the risk of non-implementation is high
- A strategy update process. Your strategy will need to be updated each year. Things change. Ensure your business can update its strategy regularly otherwise it will look old very quickly and have redundant parts
- A detailed implementation plan
- An updated Operating Model which includes an updated Decision Rights Framework. If decision rights do not change we are pretty sure the impact of the new strategy will be low
We are often asked about brands and whether the company should update its brand as a result of the new direction. Our very rough rule of thumb is that brands change every third or fourth strategy cycle which is every 10 to 12 years. If the brand is a good one then our bias is in favour of updating rather than replacing.
That’s it. Good luck in developing your strategy. An inspiring strategy is the very least an Executive Team owes its customers, investors, and workers.