There is a process to effective organisational strategic planning and the cascading of strategic plans. It can seem confusing when you haven’t done it before, but it doesn’t need to be. So, for anyone who has not been involved in an organisational strategy development and strategic planning cycle, here is a whistle-stop tour with a few call-outs for best practices.
Review the current strategy:
Start here. This is when the executive team review where they are tracking with the current strategy and agree whether the strategy is still good, needs tweaking or needs an overhaul.
Decide what process you will use for strategy development:
Let’s now assume that a new strategy is needed. At this point the executive team need to decide what strategic process they will use. Strategy doesn’t just happen by wading through lots of data, it’s an iterative process of ideas, choices, research, hypotheses and decisions.
At this stage, someone is nominated to run and facilitate the strategic process. In larger organisations, this is the role of the strategy manager or strategy officer. In smaller organisations, this is usually an external facilitator.
Developing a strategy is a group activity of the executive team, therefore they each need to be involved in the process, hence the need for someone else to facilitate the process.
In a large organisation it might be that it’s just a region, or an offering or a product line that needs a new strategy. Either way, the leadership team need to be 100% committed (if not in 100% agreement) that a new strategy is needed, and where.
Manage expectations and reduce data overload:
The leadership team need to be brought together to align on the process of strategy development, clarify each leader’s role in the process and set expectations.
It’s a common misnomer that strategy is developed at an offsite. There is not enough time (strategy development takes more than a few days) and you don’t by chance have the specific data you need to hand. It’s only during the hard work of strategy development that you will uncover new options for which you need new data. You will not know what these options are before doing the work.
So resist the temptation to do much data collection at this point. Presenting reels of data just muddles thinking, narrows visions and quickly leads to data overload.
Developing strategic options: create storyboards:
Over the following weeks and months, new strategic options are fleshed out into storyboards. Research is completed to remove as many unknowns from the assumptions as possible. This is often an iterative process with strategic options rejected along the way as the storyboards get whittled down to a few.
These storyboards each have a high-level description of:
- How the strategy delivers both value to the organisation and innovation to your customers
- How the strategy deviates from the competition
- What would need to be true for this to be a winning strategy (the assumptions that have been made)
Review strategic options and choose one:
The final stage of strategy development comes when there are a few strategic choices mapped out on storyboards and the leadership team comes together to review each of them, debate them and finally agree on which one is the preferred option.
With this preferred option chosen the leadership team can agree on what the business will no longer be doing, or will be de-prioritising. This is a critical discussion, otherwise, the strategy quickly becomes unachievable and/or unprofitable. Strategy has two parts: what we are doing and not doing. It’s a set of choices, and that means choosing to not do some things so you can focus on doing others.
Everyone on the leadership team needs to be committed to the decision of what you are doing and not doing. They will need to be mentally prepared to re-allocate budgets, people and key resources to the new strategic priorities.
Communicate the strategy and the strategic choices:
Once the new strategy has been agreed then there is an opportunity to bring all the leaders in an organisation together to present the new strategy. This is where there is a clear communication on:
- How, and why, the leadership team have chosen this strategy
- How it creates both value and innovation for customers
- How it deviates from the competition
- What you will now no longer be doing
- What everyones role is now in developing strategic plans to achieve this
At each level of the organisation, strategic choices will be made that need to be aligned to the overall strategy. Everyone will be making choices about where to focus their people, budget, attention and energy. The communication of strategy never stops, because people’s choices never stop.
Create cascading strategic plans:
Following this, the business leaders prepare their business unit or departmental strategies. This is the creation of all the next-level strategies that add up to the organisational one. Strategies need to cascade both down and up and they need to make sense across levels too. At this stage in the process, there are discussions on what choices will need to be made in each business area to make the strategy work. This is very much a 2-way conversation. If a strategy is not achievable this is when you want to hear about it, not a year later.
A key discussion is the reallocation of resources to the new strategic priorities, away from the non-strategic priorities. This is always a challenging discussion as most leaders don’t like giving up budgets and headcount. However, without this level of enterprise mindset, the new strategy just becomes a cost burden as the organisation tries to do more with the same level of resources.
Lack of active re-allocation of organisational resources is one of the stages where great strategies easily come unstuck. Often the discussion goes ahead but no changes are actually made, or not made in a timely manner.
The way to mitigate this is in the upfront work of leadership development of the executive team, who then role model this enterprise mindset, and in the setting of expectations before the strategy is developed.
Align all strategic plans:
Having departmental strategic plans in place is good, but it’s not effective until all the departmental strategic plans add up to the organisational one.
This alignment step, to ensure there is no duplication and no gaps in the strategic plans, is often overlooked, leading to poor strategy execution.
Once the functional strategic plans are in place each of the plans are presented within the leadership team. This ensures all leaders know how the strategy will be achieved, from each business area, not just their own. This is an important step because senior leaders will need to hold each other accountable for each other’s strategic plan.
Monitor success using leading indicators:
Remember the list of assumptions made when the strategy was developed? These come back into play here as they form the measurements and data inputs that you put on your strategy dashboard. If you can pick up that an assumption is not playing out early enough then you have a warning indicator on your strategy. No need to wait until it shows up in your organisational results, you can make a course correction to your strategy sooner. Your assumptions are the leading indicators for the success of your strategy.
Whether your organisation is organised in business units, departments, functions or just a small number of teams the process still follows pretty much the same approach. If you would benefit from developing an effective strategic planning process, or with help creating, cascading and aligning your strategy then reach out and book a discovery call or contact me at Sarah Robertson Consulting.
