Distillations in this newsletter: Strategy destination vs strategy aspiration; 12 strategy FAQs; One thing every strategist needs to accept; Gaining control in strategy; Strategic resilience.
STRATEGY DISTILLED:
A monthly concoction of insight, learning and things you might have missed for anyone who works on strategy, works with strategy or just loves strategy.
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This month …
- Strategy destination or strategy aspiration?
- 12 frequently asked strategy questions.
- Snippets on strategy you may have missed: One thing every strategist needs to accept; gaining control; strategic resilience.
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Strategy destination or strategy aspiration?
A challenge at the heart of any strategy is how to label where your strategy is going. When I wrote The Strategy Manual, I described this ‘where-is-your-strategy-going’ in two different ways: firstly, I said that one of the key objectives of strategy was ‘to commit the organisation to a future destination’. Secondly, I proposed that a key part of strategy scoping was to define your new strategy in terms of its aspirations. So, how do we best describe ‘where-is-your-strategy-going’? Is it better thought of as a destination or an aspiration?
One important factor to consider in answering this question is that strategy can be described in terms of a direction rather than a destination: the terms trajectory or path are sometimes used instead of direction. In other words, strategy can sometimes commit to ‘how we will strive to get somewhere’ rather than ‘where we will strive to get to’. For example, my strategy might be to increase investment in research, innovation and product development. This is definitely a means rather than an end; a direction more than a destination. Of course, this direction could be translated into a corresponding destination. By means of increased investment in research, innovation and product development, I aim to lead the market in how rapidly I launch new products. However, requiring strategy to be defined in terms of a destination may be an unwise ‘forcing function’ in some circumstances. Launching more new products than my competitors is one possible destination but improving the product-market fit of my existing products might be another. In some cases, it might be more judicious to leave strategy defined in terms of direction.
Aspiration perhaps comes to our rescue here. We can aspire to either a destination or a direction for our strategy. This would also align us with some illustrious company. Lafley & Martin, in their excellent 2013 book ‘Playing to Win: How Strategy Really Works’, locate strategy ‘aspiration’ front and centre of their model:
- “What is your winning aspiration? The purpose of your enterprise, its motivating aspiration?” (p14)
- Winning aspiration “sets the frame for all other decisions … Aspirations are statements about the ideal future. At a later stage in the process, a company ties to those aspirations some specific benchmarks that measure progress towards them.” (pp 18-19)
There is just one word of caution to heed in relation to ‘aspiration’. It can be used in two distinct ways in relation to strategy:
- Visionary aspiration – What is our ‘vision’? Where do we want to be ultimately? How do we see the world when our work is done?
- Strategic aspiration – Where will this strategy take us at the end of this prescribed time period? What is our ideal future state at this defined time in the future?
So, here are my rules for defining ‘where strategy is going’:
- If you can definitively and confidently define a strategy destination, do so. It provides a clear endpoint for strategy, with stopping rules so you’ll know when you’ve arrived, and KPIs against which you can measure your progress.
- For some strategies this will be a step too far. The only thing you can be certain of is your direction of travel. To force yourself to commit to a particular destination may prematurely rule out alternative destinations. In which case define a strategy direction.
- If you’re not sure which is going to apply to your own strategy, perhaps because you haven’t resolved it sufficiently yet, talk about strategy aspiration, because that can be either a destination or a direction. Make sure, in this case, you don’t confound visionary aspiration and strategic aspiration.
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12 strategy questions … we have resources to help you with
Here are 12 questions I’m frequently asked about strategy … and the models I typically reach for to help answer them.
- We need a new strategy – but where do we start?
This is a great question. Starting in the wrong place with your strategy thinking could cost you a lot of wasted time. My go-to starting point is always to ask the three questions in the Value Model of Strategy. Firstly, what value do you deliver to the world – and how could you do this differently in future? Secondly, what is it that you do in order to deliver that value – and how could you do this more effectively in the future? Thirdly, how do you manage your inputs and outputs to ensure your value delivery is profitable – and how could you do so more efficiently in future? - How do we draw a line between strategy and ‘business-as-usual’?
This is a question that ought to be asked a lot more often than it actually is. I developed the Boundary Model of Strategy specifically to help answer it. - Do we really need clear separation between our strategy and our strategic plan?
Yes. Yes! YES! The Separation Model of Strategy starts to explain why. - How do we make sure our vision, mission and strategy are complementary but still well-aligned?
Okay, that’s not the question I’m actually asked, but it should be. A great foundation for any new strategy is to have vision and mission doing the different jobs they’re meant to whilst being nicely aligned. The House of Strategy Model presents this graphically and provides a template to either analyse your existing vision, mission and strategy or devise new ones. - How do we get everyone to ‘take the long-view’ and see the entire strategy process from conception to completion?
As of last month’s newsletter, we have two ways of answering this. Our original Strategy Lifecycle Model highlights the cyclic nature of strategy whereas last month’s Triple Diamond Model of Strategy emphasises the three cycles of creative thinking that make up the strategy process. Take a look at both and decide which suits your purpose best. - How do we make sure our strategic thinking has been deep enough and creative enough?
Framing is a good answer. It sets your strategic thinking in a new context, and, in doing so, injects sources of creativity into strategic thinking. It stimulates ‘divergent thinking’ by frame-stretching and then ‘convergent thinking’ by frame-setting. The Futures Cone can also provoke useful discussion. - How do we make sure our various strategy initiatives align effectively and join up across our organisation?
This is my favourite question, because it is rarely done well, and it is so much easier to do than most people imagine… provided it is built into your strategy process from the start. Learn more by watching this 3-minute video or exploring the Cascade Model of Strategy and Strategy Mapping. Once you’ve built your strategy map, validate it, by checking that all goals are sufficient and necessary for strategic success, using the SaNity Check Model. - How do we check if our draft strategy is good enough?
The Strategy Design Model provides a checklist of the eight features every good strategy ought to have. - How do we ensure our strategic plan is resilient and agile enough?
The Pyramid Model of Strategy Adaptation helps you check that your sense-making, decision-making and change-making are good enough to ensure your plan remains adaptable. - How can we get everyone across the organisation actively engaged with, and willingly committed to, our new strategy?
The simple answer is to have lots and lots of ‘strategy adoption conversations’ and the ‘H’ Model of Strategy Adoption sets out how to do them well (this model is also referred to in relation to Rob Estreitinho’s suggestions on ‘control’, in the snippets below). Remember strategy adoption needs on-going support – check you’ve got all the necessary elements in place using the Goal Adoption Support Model. - How do we get Key Performance Indicators (KPIs) to work for strategy?
I’d have to admit that most of the times I get asked this question it turns out the problem is not actually to do with KPIs. It is more to do with goal definition and goal alignment (covered in 7 above), which need to be well resolved first if our strategy KPIs are going to aggregate up to a summative indicator of strategic success. Provided the underlying goal structure is resolved, the AMP Model will steer you towards good KPIs. - How do we align our management of risks with our management of strategy?
Firstly, recognise strategic risks (see Strategic Risk Model and Risk Register). Next, categorise the different ways to deal with them (see VACU Model) and then prioritise the risks and plan how to manage them (see PRiSM). See also the McKinsey item in snippets below.
As always, if you’d like to chat in more detail about any of these, get in touch.
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Snippets on strategy you may have missed
One thing every strategist needs to accept: The territory changes faster than the map. @mikebxtr on Twitter
If that doesn’t grab you immediately, here is the thinking behind it. The expression, ‘the map is not the territory’ has some big-name intellectuals attached to it, including Rene Magritte (Ceci n’est pas une pipe), Lewis Carrol and Gregory Bateson. Essentially it means that a model of something is not the same as the thing itself. Strategy is merely a representation of the organisational change we seek to bring about. It is not actually the change itself. For strategy to have impact, we need to translate words on paper into real-world action by real-world teams. If we now go on to say that the ‘territory changes faster than the map’, we are acknowledging that changes ‘on the ground’ are going to run ahead of changes we make to strategy – so we need to make sure that our strategic plan continuously adapts to real-world changes, as they occur.
Gaining control
I picked up several gems from Rob Estreitinho’s 21 slices to end 2021 but my favourite is number 5 which he called ‘control’ (BTW, this is the lesson for strategy that I took from his post, not what he actually said):
- What would it take for you to feel in control?
- Once in control, what would you want to change?
- What impact would you want that change to deliver?
What a great set of questions to weave into discussions on strategy. I plan to use these on two occasions: during early engagement on the development of a new strategy and during strategy adoption conversations (see the ‘H’ Model of Strategy Adoption). What a hugely empowering way to get people involved in the whole strategy process.
Strategic resilience
McKinsey published a useful exhortation to organisations that they ought to move from risk management to strategic resilience:
“… in the past, their risk management focus was on a small number of well-defined risks, primarily financial risks … now, risk is encompassing the broader mandate of resiliency management. It is woven into long-term strategy development at top organizations, helping companies navigate a far more dynamic operating environment.”
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Goal Atlas runs workshops and sprints to help your strategy work better across your organisation. Get in touch if you think we might be able to help.
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If you enjoy reading this newsletter, don’t forget to forward it to friends or colleagues who might also find it of interest.
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