Strategy making – from theory to practice

It’s time to discuss the nuts and bolts of strategy making.

Early in this Strategy OV series, the Effectiveness lab defined strategy as: a plan, a unique and valuable position that others cannot match, or a journey that takes a company or individual from point A to B. The common thread in all the three definitions is: ‘a unique milestone, that is some distance away from the current bearing, and that has to be reached via some kind of OD. locomotion.’

In other words, strategy is a positioning game that involves defining current and future positions. A future position for which others may lack the wherewithal to attain.

Before getting into more detail regarding the strategy making options available to organizations, we have to yet again caution managers and leaders about the new-normal in strategy. Companies can no longer confidently predict situations plus go on to create systems and resource coordination mechanisms needed to get the best productivity patterns from businesses value chains.

The conventional linear approach to strategic planning is no more. A hybrid system that combines both traditional, contemporary, and emerging strategy making methods guarantees much more robust and sustainable strategy for the organization.

Strategy making tool-box:

The world bank’s ten step guide:

This world bank model stands to benefit the not-for profit aka INGO community the most

1. Agree on a strategic planning process

Involves deciding a strategy making road map – who is involved – timing of the process – as well as the resource envelope. This may be done at a retreat or not

2. Carry out an environmental scan

Often done using the SWOT tool. SWOT = Strengths, Weaknesses, Opportunities, and Threats.

3. Identify key issues, questions, and choices to be addressed as part of the strategic planning effort

Articulate ’strategic issues’ or questions the entity needs to address and set priorities against time and importance

Once an organization has put in place 1 – 3 above, the time will be right to plan a retreat or a series of meetings to:

4. Define or review the organization’s values, community-vision, and mission

The world bank advises organizations to consider beginning strategic planning by agreeing to the following:

  • Organizational core values or operating principles
  • Community Vision
  • Mission

Agreement on values, vision, and mission is usually best accomplished as a part of a planning retreat or at a special meeting. Remember to include the board in the process

5. Develop a shared vision for the organization

At this stage, organizations need to agree on where the organization wants to be in three to five years. Ask the question: ‘where should the organization be at the end of the strategic plan?”

6. Develop a series of goals or organizational status statements which describe the organization in a specified number of years – assuming it is successful in addressing its mission

This is usually a short step from the vision to goals – sometimes the statements describing the vision are primarily goal statements. It is vital  to transform the vision into a series of key goals for the organization, preferably in the form of status statements describing the organization.

7. Agree upon key strategies to reach the goals and address key issues identified through the environmental scan

The primary emphasis should be on broad strategy, including current and new program, advocacy, collaborative, or other approaches. According to the World Bank, strategies need to relate to specific goals or address several goals.

This requires organizations to pinpoint where the organization is at now, juxtaposed against where its vision and goal/s indicate it wants to be and identifying the strategies required to get there.

Critical variables like feasibility, acceptability, values, cost-benefit, timing, etc. need to be considered
Steps 4 – 7 above should be ideally completed as part of one strategic retreat

At this stage, a draft strategic plan should be written

8. Develop an action plan that addresses goals and specifies objectives and work plans on an annual basis

Ensure to involve staff at this stage – ultimately, they implement the plan and not the board or consultant

9. Finalize a written strategic plan that summarizes the results and decisions of the strategic planning process

Like the world bank, the Effectiveness lab advises against set formats for the strategic plan. Design a document that works for your organization. The Effectiveness lab’s rubric on the length of a strategic plan is: no more than x15 A4 pages including appendixes

10. Build in procedures for monitoring, and for modifying strategies based on changes in the external environment or the organization

iedunote’s 9 steps for making strategy: 

iedunote’s nine step model is a good balance for the more sophisticated private sector firm.

1. Planning Awareness

This involves taking stock of the status quo – current mission, goals, structure, strategy, and performance, as well as the values and expectations of the major stakeholders and power brokers of the organization

2. Formulating Goals

Clearly, spell out what an organization wants to achieve in the future. Like the World’s bank model above, at this stage, the mission or purpose and strategic objectives are defined

3. Analyzing the External Environment

With the goal and objectives in hand, the next step is to conduct an environmental scan. The environment scan looks for factors that will support or undermine the achievement of organizational goals and objectives.

4. Analyzing Internal Environment (or own organizational resources)

The internal scan identifies the organization’s strength and weaknesses.

5. Identifying Strategic Opportunities and Threats

Applying three and four above, strategic planning teams proceed to stage 5 i.e. the identification of opportunities to achieve the agreed goals as well as the threats that could torpedo the goal realization process.

6. Performing the Gap Analysis

This is the anticipated gap between where the organization intends to be at with the new strategy versus where it would be at were the current strategy to be maintained. You may refer to this as the ‘economic-rent’ for attaining the anticipated mission/vision

7. Developing Alternative Strategies

If the above gap analysis finds no gap, then there is no need to change strategy as all will be deemed to be well. The latter is a highly rare position for an organization to find itself in. Usually, a new strategy or tweak to the existing strategy is needed, and various options need to be considered, fully taking into account the risks involved for each.

8. Implementing Strategy

Strategies have to be implemented. The board endorses strategy, management rolls out the strategy and supports its implementation, departments develop departmental strategies and action plans. Individual staff are assigned their fair share of the strategic action plan through their individual operating plans

9. Measuring and Controlling Progress

Finally, driven by the new-normal, organizations have to monitor and very frequently, the efficacy of strategy – and tweak, change certain elements, or completely abandon it for something new, should that be called for

Onstrategy’s four stage model:

Like above, Onstrategy presents an equally linear but much more compressed four step approach to strategy making. This may benefit much smaller and less complex organizations.

1. Determine position:

Identify the strategic issues that you want to address – Scan industry and market data – Capture and reflect on customer insights – Employee input (specifically strengths and weaknesses of the organization) SWOT – synthesize all this data into a summary SWOT

2. Develop strategy:

Identify the organisations core purpose (mission) – Identify the organisation’s core beliefs (values) – Identify the vision of success in x5 years (vision) – Identify the organisation’s USP (competitive adv.) – Agree an organisation wide strategic approach to success – agree long term objectives via a 3 year balanced framework of 6 or less objectives – a 3 year finance projection (forecast)

3. Build the plan:

Process to set priorities – Organisational goals: set short to medium term goals (1+ year) – Select KPI’s to track the progress – Cascade organizational goals to departments (12 months) – Departments cascade departmental goals to individuals – and develop and align a one year budget with plan

4. Manage performance:

Communicate plan to wider organization – Set a schedule for progress reviews – Train the team to use the strategic plan (leverage) – Hold progress reviews and modify plan (quarterly) Hold annual reviews and plan for next year

Appreciative-Inquiry (AI) and strategy making:

Our final strategy making model is the contemporary appreciative-inquiry (AI) approach. AI involves listening to internal stakeholders who understand how the organizations work and build on organizational strengths to design strategy. The model has obvious disdain for the negative.  AI seeks to engage stakeholders in self-determined change.

“At the heart of Appreciative Inquiry, is an energizing and inclusive design that fosters creativity through the art of positive inquiry. AI’s invigorating process comes alive through conversation, shared values, and collective visioning. Using an Appreciative Inquiry approach helps answer the question of “what are we being called to do?” It also acknowledges that the questions asked determine the data found and the results discovered, so it intentionally focuses on discovering strengths, opportunities, and potential.” 

The AI approach has five key stages: Define, Discover, Dream, Design, and Destiny

Still, under the AI umbrella, the SOAR approach has been used as an AI tool and with good results

SOAR has five key stages: Initiate (Choice to use) – Inquiry ( into strengths) – Imaging (the opportunity) – Innovate (to reach aspirations) – and Inspiration (to achieve results)

Organizations are advised to hire experts to help them to appropriately use the AI approach in their strategic planning. It is not that straight forward

Good strategy making!



Categories: Strategy

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5 replies

  1. Apollo – This is a nice summary of the ‘state’ of strategic planning which shows how it’s evolved over the past years. It’s good to see how on-going monitoring AND adaptation (as needed) has begun to have more of a prominent place in the process.

    Like

    • Bonnie – thanks for reading the blog

      It’s true the new normal is about dealing with the uncertainty and its complex effect-patterns

      Monitoring is an increasingly vital function in strategy management

      Like

  2. I think AI and SOAR could have application in the tools we are gathering for our QA/School Improvement process. I’d like to learn more from you on their provenance. PD

    Like

    • Hello WHPD – I like your sobriquet

      Thanks for reading the blog. I always get fascinated by how many of us use the word strategy without understanding well what it’s all about

      AI’s source is the field of OD. at Case Western University- was developed at Case Western Reserve University’s department of organizational behavior, starting with a 1987 article by David Cooperrider and Suresh Srivastva

      It can be a good tool for your QA work – and to your credit, that is what you did at the nairobi meeting – not so?

      Like

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