When you design your strategy process, tailored to your organization, you need to consider two dimensions.
- The first dimension, the one usually considered, is the tangible outcome. What do we need to understand to be able to take informed actions toward valuable targets?
- The second, often neglected, dimension is the intangible process of understanding and commitment. How will we align to be able to act together? The outcome of the strategy process is highly dependent on our ability to integrate knowledge – what we call Collective Intelligence – which is a capability that can be systematically developed, you can read more about this in the insight Strategy processes require the development of new capabilities.
Using a framework for strategy can help us design “fit for purpose” strategy processes
We lay out a generic three-step Strategy Process design and give tips, gained from working with both public and private clients, on how to reach both the tangible outcome and the commitment necessary to make it happen. Most of the time these steps need to be iterated more than once in a single cycle.
Design the process
There is always a trigger for when to initiate a strategy process. Sometimes, it’s simply because it’s that time of year again.It can also be because of new directives from the board, a desire to improve previous efforts or that something has changed in the company’s environment. In this first step, you create awareness about why you need to re-design your strategy, how you design your strategy process, and whom to involve.
This step requires integration with execution, insight both into the strategy process itself, and awareness of your organization’s ability and experience from working with the strategy to make sure you tailor the process in a suitable way. Should you go with a full-scale strategy process? Is a benchmark study, scenario analysis or customer study most appropriate? In this step, it is important to understand potential limiting requirements, for example investor requirements. It is vital to secure involvement and commitment from relevant stakeholders, including ones outside of the organization.
Understand the context
This step is often considered the essence of strategy. It is about conducting the External and Internal Analysis (of many potential different varieties depending on your needs) and later combining them in a nuanced Synthesis to provide a rich foundation for your context and potential ways forward. Data is good but understanding is what really enables coordinated, intentional, and sustainable action. Research and Sensemaking should more often take place in parallel rather than sequentially.
In this step, it is essential to have openness and involvement. You need a common understanding of the context and the courage to question your existing presumptions about reality, which also includes raising uncomfortable questions to get the data you need to later make the right decisions. Often you need to iterate your analysis and continue the exploration through multiple scenarios since your initial description of the problem often falls short of the core issue.
Choose a direction and set the target
Strategy is about making choices and setting targets. Without choices all the understanding created previously in the process will not lead to action. Perhaps even more strongly, it is about choosing what not to do. Step three is about setting out a Strategic Direction, setting effective goals, making true Prioritization, and Planning for how to execute the strategy.
In this step, your ability to work as a team, create representation about what you want to achieve together, and your individual role and responsibilities in achieving this is essential. You need a common understanding of the most important initiatives to reach your wanted position and its consequences. This requires involvement, trust, openness, and knowledge sharing.
Realizing this newly developed strategy requires you to secure the integration between strategic planning and execution – which you can read more about in the insight Stratecution- A Formula for Realizing your Strategy.
