Strategy Glossary

Key terms in strategy and what they mean

This glossary sets out to be a knowledge-base of latest thinking on strategy-related terms and concepts. Originally produced as a final section of The Strategy Manual, it is now on-going work-in-progress, where new sources, new insights and, occasionally, long-overdue realisations are added.

Adoption conversations
A key enabler of strategy adoption. These are conversations which spread out across the organisation as the core goals defined in the strategy are elaborated to fill out the strategic plan. They involve an exchange of knowledge and expertise to ensure that front-line teams understand the intentions and aspirations of the new strategy and senior leaders understand the front-line context in which strategic change must take place.
Agility

The ability to think or move quickly, easily or nimbly in order to respond at pace to either the need or opportunity to change. Being agile in relation to strategy means being ready and able to make innovative changes to the strategic plan in response to new circumstances.

AMP Model of Good KPIs

A model proposing that a good Key Performance Indicator (KPI) is one that is Actionable, Measurable and Purposeful.

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Boundary Model of Strategy

This model assumes that strategy is about the management of transformational change over a long period of time (typically years). It proposes that an important early decision about any new strategy is what proportion of the organisation’s resources are to be allocated to strategic initiatives, as opposed to the maintenance of business-as-usual. The ‘boundary’ is the dividing line between the resources allocated to strategy and business-as-usual, respectively.

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Binary Star Model of KPIs

In astronomy a binary star system is a pair of stars locked in orbit around each other. This concept is used to explain the interdependence of the two main types of strategic Key Performance Indicators (KPIs): Success-Defining KPIs and Critical-to-Success KPIs.

Bounded creativity

A best-practice approach to creative thinking, informed by research. Creativity is most effective and most valuable when constrained to the right extent; too tightly constrained and creativity is stifled, too few constraints and creativity is too unfocused and, usually, not relevant enough to the challenge that the creativity is trying to address.

Candidate strategy

A set of ideas contending to become the new strategy. If the mediated assessment protocol (MAP) is to be used to decide on the new strategy, it requires more than one candidate strategy to be compared.

Cascade Model of Goal Prioritisation
Starts with a simple priority allocation system (typically one, two or three stars) for individual goals in a strategy map and then cascades a calculated priority score across the map, taking into account the inheritance of priority from parent to child goals. This model is adapted from Thomas L Saaty’s well-established and well-respected Analytic Hierarchy Process (AHP).
Cascade Model of KPIs

Proposes that wherever you have a strategy map, you can cascade Key Performance Indicators (KPIs) over that map, thereby revealing the logical connection between the individual KPIs. A well-constructed KPI cascade will ensure that achieving all of the KPIs for a given set of sub-goals leads to the achievement of the KPI for their parent goal.

Change-makers

The people, across your organisation, who make the changes happen that are necessary for strategic success.

Convergent thinking

Often thought of as simply selecting the best or the correct idea produced during divergent thinking. This, however, is an over-simplification. Part of convergent thinking, as the name suggests, is the bringing together, the combining, the hybridisation or the synthesis of multiple individual ideas – this is creative convergence and is much more than simply idea-selection.

Critical-to-success KPIs

One of two types of strategic Key Performance Indicator (KPI) (the other being success-defining KPIs). Critical-to-success KPIs define the target performance thresholds for all goals in a strategy map that are critical to the success of the entire strategy. They are, therefore, a lot more numerous than success-defining KPIs.

Culture

The ideas, customs, attitudes and social behaviour of particular people or society (see also Organisational culture).

Divergent thinking

From the word diverge, meaning to move apart, divergent thinking is the ability to think of lots of ideas. It is one of the two stages in creative thinking, the other being convergent thinking.

Effectiveness
What you do to deliver value to your beneficiaries; how, and how well, you deliver value. Effectiveness can be defined as ‘doing the right thing’.
Efficiency

How you make good use of resources. Efficiency can be defined as ‘doing the thing right’.

Enforcement principle of governance

One of two principles shaping the working governance of strategy, the other being the engagement principle of governance. The enforcement principle recognises that rules and formalities need to be imposed, complied with and enforced, as part of the management of strategy. Mechanisms of enforcement include organisation design, the line management relations inherent in that design, policies and standards and managerial decisions about the allocation of budget.

Engagement and commitment

Active interest in, and a willingness to commit to strategy, brought about by high levels of consultation, influence and autonomy being afforded to individuals and teams across your organisation. (See also Working governance of strategy).

Engagement principle of governance

One of two principles shaping the working governance of strategy, the other being the enforcement principle of governance. The engagement principle recognises that for strategy to succeed, individuals and teams across the organisation need to co-create, engage with and commit to strategic goals, and a set of norms and conventions for pursuing them.

Executive governance of strategy

Ensures the board and senior leadership are working effectively together towards strategy success. This requires the board and senior leadership to work together to serve the best interests of the organisation. (See also Governance).

Formalisation of authority

A systematic approach to working governance employing organisation design, RACIs (definitions of who is Responsible, Accountable, Consulted or Informed about a decision-making process), policies and standards, budget distribution and performance measurement against defined targets. The formalisation of authority is how the enforcement principle of strategy governance is applied. (See also Working governance of strategy).

Frame-setting

A convergent thinking process designed to select, refine and combine the creative ideas generated for a new strategy (typically by frame-stretching). (See also Framing).

Framing

A technique used in the creative loop of the strategy development process. It stimulates the divergent thinking component of creativity by frame-stretching and then the convergent thinking component of creativity by frame-setting.

Frame-stretching

A divergent thinking process designed to come up with new ideas about what could potentially be included in the new strategy. The creative thinking about new strategy ideas is prompted by a variety of models (e.g. SWOT analysis or Value Proposition Design) that are placed at the centre of the frame to stretch the imagination into new ways of thinking about strategy. Typically followed by frame-setting. (see also Framing).

Futures Cone

The Futures Cone (as depicted in ‘The Strategy Manual‘) visualises an expanding range of potential futures, emanating from the current moment in time as a set of nested cones, with each cone representing a different degree of future likelihood.

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Goal
An action with a purpose.
Goal Adoption Support Model

A model showing the eight ways that each strategic goal can be supported in order to ensure that strategy is effectively adopted across your organisation: Authority; Policies and standards; Resources; Goal ownership; Goal connections; Strategic purpose; Meaningful progress; Performance targets.

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Goal owner

An individual to whom a goal (in the context of strategy, typically a strategic goal) has been delegated.

Governance

The means by which your organisation: i) structures and delineates authority, and thereby defines strategic roles; ii) sets goals (e.g. strategy) and the rules by which these goals can be pursued (e.g. policies, compliance) and iii) establishes reporting and enforcement mechanisms. (See also Strategy governance; Executive governance of strategy; Working governance of strategy).

Hallmarks of Good Strategy Model

Proposes there are five hallmarks of good strategy: strategy is about change; strategy is about choice; strategy is about coherence; strategy is about challenge; strategy is about cascade. These hallmarks provide a way of checking whether your draft strategy is a ‘good’ strategy prior to launch.

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‘H’ Model of Strategy Adoption

Proposes that, if strategy is to be adopted effectively across an organisation, senior leadership needs to secure the engagement and commitment of individuals all the way through to front-line teams. The ‘H’ Model (as depicted in ‘The Strategy Manual‘) illustrates how this is enabled by adoption conversations, that ensure front-line teams understand the intentions and aspirations of the new strategy and senior leaders understand the front-line context in which strategic change must take place.

Hourglass Model of Strategy Governance

Illustrates (as depicted in ‘The Strategy Manual‘) the relationship between executive governance of strategy and working governance of strategy and how formalisation of authority needs to work together with engagement and commitment within the working governance of strategy.

House of Strategy Model

Provides the foundation, walls and roof within which your new strategy is going to live. It shows graphically how vision, mission, values and strategy come together for your organisation. It can be used to audit an existing, or create new, vision, mission, values and strategy.

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Iceberg principle of strategy scoping

Uses the metaphor of an iceberg, most of which is invisible under the surface of the sea, to explain that strategy scoping needs to acknowledge that most of the forthcoming strategy cannot possibly be visible during strategy scoping (as depicted in ‘The Strategy Manual‘). The part that is visible, however, can, and indeed should, be described as meaningfully as possible.

Identity marks

Signals showing what type of organisation you are, what you stand for and what you aspire to, such as your vision, mission, values, strategy and brand.

Impact
How much value you are actually able to deliver, by means of the work you do.
Innovation Pyramid

A visual representation of the rule of thumb for innovation management first proposed by Sergey Brin of Google, suggesting 70% of resources are spent on maintaining business-as-usual, 20% on refining and augmenting the way you do business-as-usual and 10% re-inventing how you will do business-as-usual in months or years to come.

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Investment Pyramid

Illustrates how good investment decisions set out to balance the different risk and return profiles of different types of investments. The pyramid shape reflects typical investment advice to keep the majority of your investment assets in low risk, low potential return investments, and a minority in high risk, high potential return investments.

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Key Performance Indicator (KPI)

A critical measure of progress towards an intended outcome (see also Strategic Key Performance Indicator).

KPI trajectory

A depiction of how a Key Performance Indicator (KPI) is expected to change over time and hence how interim targets over the course of the strategy need to be set.

Lagging and leading indicators

Two different types of Key Performance Indicator (KPI). A lagging indicator is a measure of output or impact; usually the impact you seek to bring about (e.g. did your strategy result in the increased revenue you sought?). Such measures of impact commonly take some time to take effect and be measurable – hence ‘lagging’. A leading indicator is a measure of input (e.g. marketing expenditure) that often causes the impact we seek to bring about and is available quickly – hence ‘leading’.

Mediated Assessment Protocol (MAP)

A structured process for committing to a new strategy late in the strategy development process. It involves having more than one candidate strategy to decide between, defining how they will be assessed in advance, having the assessment done independently by multiple people and making the final evaluation after all the mediating assessments are complete.

Mission

One of the identity marks for your organisation (vision, mission, values and strategy). Mission is a statement of the core purpose and focus of your organisation. It provides a sense of identity for employees, customers, suppliers etc. It is about NOW! Why do you exist, right now?

Organisational culture
The ideas, customs, attitudes and social behaviours typical of an organisation. Organisational culture is often characterised as being positive (good communication, a clear sense of purpose, opportunities for growth and development, reward and recognition for good work, feelings of trust and adherence to clear values) or negative / toxic (hyper-competitive, giving rise to lots of conflict, distrust, fear of authority and pressure to over-work).
Organisation design

The creation of roles, processes and structures to enable an organisation to achieve its objectives. An important output is organisational structure, which defines the line management relationships between individuals across the organisation.

Performance indicator

A measure of progress towards an intended outcome.

Price-Value map

A graphical representation of your products and your competitor’s products showing how they compare on two axes of a scatter-graph: price and some measure of the value delivered to customers.

Prioritising Risk for Strategy Model (PRiSM)

A systematic and structured way for scoring risks and then calculating a relative risk priority number so that different risks can be compared and decisions taken on which to take action on. PRiSM is adapted from the well-established risk prioritisation tool in engineering called Failure Modes and Effects Analysis (FMEA).

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Pyramid Model of Strategy Adaptation

A graphical depiction of the three activities needed for strategy adaptation (sense-making, decision-making and change-making) as well as the three underlying capabilities needed to make these activities effective (surveillance capability, commitment capability and responsiveness capability).

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RACI

A means of defining working relationships in terms of who is Responsible, Accountable, Consulted and Informed.

Recursion

A repeating pattern-within-a-pattern. It occurs in biology (e.g. trees branching repeatedly with ever-smaller and smaller branches) in mathematics and computer science. Russian dolls that nest inside one another are a physical example of recursion. The concept of recursion applies to strategy mapping where the method of one goal is the purpose of the goal below it.

Residual value
The value you receive, after costs, in exchange for the value you deliver.
Resilience
The ability to withstand or accommodate changes both inside your organisation and outside in its operating environment.
SaaS

Acronym for Software as a Service, describing a business model where software applications are developed and hosted by the business and licensed to customers on a subscription basis.

SaNity Check Model

Checks both the sufficiency and necessity of goals in a strategy map. Once the entire strategy map has been checked for the sufficiency and necessity of all of its goals, the strategy map is considered to be validated.

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Separation Model of Strategy

Proposes that strategy and strategic planning need to be forced apart so they can serve their different purposes within the organisation. Whilst strategy provides a compelling vision of the future, strategic planning devises the transformational change programme to get there. Whilst strategy is all about destination and path, strategic planning is all about people, priorities, resources and deadlines. Perhaps most critically, strategy doesn’t change, but strategic plans can, and usually do, change.

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Situation analysis

Is part of strategy scoping and reviews the current situation of your organisation in preparation for strategy development. The House of Strategy Model can be useful for situation analysis.

Six Elements of Strategy

Six different things strategy is claimed to be: analysis, choice, positioning, design, storytelling and commitment. These elements are used to synthesise a coherent view of what strategy is.

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Strategic Key Performance Indicator

A critical measure of progress towards the change specified in a strategy.

Strategic plan

A transformational change programme, initially designed to achieve strategic success and then adapted to cope with changing circumstances for the rest of the strategy lifespan.

Strategic planning

A process that translates high-level, organisation-wide strategic goals into the actionable goals that front-line individuals and teams can achieve, and identifies priorities, timescales and targets for strategic success. The outcome from strategic planning is a completed strategic plan.

Strategic Risk Adaptation Plan

A way of analysing and describing how you could adapt to the uncertainties posed by strategic risks. The strategic risk adaptation plan is derived from the pyramid model of strategy adaptation.

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Strategic Risk Model

Illustrates how to recognise the risks standing in the way of strategy success, understand the nature of the underlying uncertainty, and decide how to mitigate any harm or exploit any opportunity arising from that uncertainty.

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Strategic risks
The five key types of strategic risks are: 1. Marketplace risks, typically involving actions of your customers or competitors; 2. Remote risks that initially seem remote but could turn into strategy killers, such as a global pandemic or a trade war; 3. Knock-on risks are triggered by events that have no direct impact on your strategy at all, but their knock-on consequences are what cause you the problems; 4. Internal risks are caused by changes within your organisation; 5. Emergent risks are the risks you don’t anticipate until they are upon you, commonly because they arise due to the changes brought about by strategy.
Strategic Risk Register

A way of analysing and describing strategic risks, to identify the underlying ‘uncertainty’ that a risk introduces and then explore the potential harm and exploitable opportunities available as a result of that uncertainty. The strategic risk register is derived from the Strategic Risk Model.

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Strategic success

A state (identified by success-defining KPIs) aspired to and moved towards throughout the strategy lifespan.

Strategy
Can be defined in quite different ways depending on whether you are focused on the process of creating it or the purpose it is intended to serve. The process-focused definition: strategy requires choices to be made, based on analysis and clarification of strategic positioning. It is, however, more than merely choosing between options; strategy designs a future you then strive to bring about. Doing so requires the commitment of change-makers and hence strategy must be conducive to engaging and inspiring them. The purpose-focused definition: strategy defines the future state you seek to bring about, the value of achieving that state and the core methods by which you intend to get there.
Strategy acceptance criteria

(A term used during strategy production): one or more factors used to evaluate whether the strategy under development is good enough to be signed-off and launched.

Strategy adaptation

One of the three stages in the strategy lifecycle (Produce, Adopt, Adapt), during which a strategic plan is adapted to cope with changing circumstances. Strategy adaptation focuses on both strategic resilience and strategic agility.

Strategy adoption
One of the three stages in the strategy lifecycle (Produce, Adopt, Adapt), during which a new strategy is adopted across the organisation and, at the end of which the new strategic plan is produced. Strategy adoption gets everyone across the organisation to engage with the strategy and commit to its success.
Strategy adoption gap

The challenge of turning the intentions of strategy, originally owned by senior leadership, into actions driven by front-line teams that lead to strategic success.

Strategy announcement

The moment when the commitment to produce a new strategy becomes official, at the end of strategy scoping and prior to the start of strategy development. The strategy announcement is usually marked by some sort of announcement event.

Strategy aspirations

Part of the strategy scoping process to identify what you, as an organisation or as leaders of that organisation aspire to in the forthcoming new strategy.

Strategy cascade

The process of elaboration and aggregation by which strategic choices at the top of the cascade set the context for the choices below, and choices at the bottom influence and refine the strategic choices above.

Strategy Design Model

A model comprising eight interlinked elements that good strategies should be designed to feature: destination, methods, alignment, innovation, priority, performance, adaptability and adoption.

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Strategy destination

The desired future state for your organisation, identified in your completed strategy and defined by your success-defining Key Performance Indicators (KPIs).

Strategy development

How you analyse, synthesise, imagine and commit to a new strategy, and how you write it and prepare it for dissemination throughout the organisation, following strategy launch.

Strategy development log

Documentation that logs each key step in your thinking and decision-making throughout strategy development.

Strategy drivers
Part of the strategy scoping process to identify what you feel compelled to include in the forthcoming new strategy.
Strategy governance

The means by which your organisation exercises authority to make a concentrated and coordinated effort to achieve strategic success. (See also Governance).

Strategy governance charter
A document defining how governance works and specifying how the roles and responsibilities of the board and senior leadership align.
Strategy horizon

(A term used during strategy production): a characterisation of the likely ambitions for the strategy under development, as far as can be seen at the present moment in time.

Strategy launch

The moment when the strategy officially begins, usually heralded by some launch event to publicise the new strategy and its aspirations. The strategy launch is also a key moment marking the start of strategy adoption.

Strategy lifecycle
The functionally-different stages through which strategy progresses.
Strategy Lifecycle Model

The model used in ‘The Strategy Manual‘ depicting the strategy lifecycle as having three stages: produce, adopt and adapt.

Strategy lifespan
The planned duration of a strategy from the time of strategy launch to the intended time when strategy success will be achieved.
Strategy map

An interconnected cascade of goals that link actions to their purpose or purposes. It systematically connects the strategic aspirations of senior leadership to the tactical actions of front-line teams, and can facilitate strategic innovation, strategy adoption and strategic planning.

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Strategy mapping

A process of connecting goals together using why-how logic to link methods and purposes in a validated map. It can be used to systematically connect the strategic aspirations of senior leadership to the tactical actions of front-line teams, and can facilitate strategic innovation, strategy adoption and strategic planning.

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Strategy production

One of the three stages in the strategy lifecycle (Produce, Adopt, Adapt), during which a new strategy is produced, and, at the end of which, the new strategy is launched. This stage is comprised of two processes: strategy scoping and strategy development.

Strategy review
A process of gathering insights and embedding the lessons learned so your strategy works even better next time. Ideally a habit that happens throughout the lifespan of your strategy, with a summative review at the end of its lifecycle.
Strategy Review Model

A representation (as depicted in ‘The Strategy Manual‘) of the summative review process that happens at the end of the strategy lifespan (or earlier, if it is decided to terminate the strategy early and develop a new one). This review should include look-back (what happened? why did it happen? how could it have worked better?) and look-ahead components (what lessons from this strategy could make the next one better?).

Strategy scoping

One of the processes within the strategy production stage of the strategy lifecycle. Strategy scoping defines what you can see of the new strategy from where you are standing right now.

Strategy scoping log

Documentation that logs each key step in your thinking and decision-making throughout strategy scoping.

Strategy success
A situation in which all strategy success criteria have been met, on time and to a satisfactory quality.
Strategy success criteria

One or more factors that will be used to judge the ultimate success of a strategy.

Strategy timeline

A (usually graphical) depiction of key events, processes and outcomes across the lifespan of a strategy.

Strategy validation

One loop of the triple-loop model of strategy development, which sets out to check if the strategy is fit-for-purpose by evaluating it against 1. the strategy acceptance criteria devised during strategy scoping and 2. the hallmarks of good strategy. Strategy validation also refers to the process of checking the final strategy map that underpins the strategic plan, using the SaNity check model.

Success-defining KPI

Sets the threshold at which your strategy will ultimately be judged to have succeeded or failed.

Triple-Loop Model of Strategy Development

A visual representation (as depicted in ‘The Strategy Manual‘) of the three activities that occur iteratively during strategy development: create, inform and validate.

Triple-Loop Model of Strategy Scoping

A visual representation (as depicted in ‘The Strategy Manual‘) of the three activities that occur iteratively during strategy scoping: horizon scoping, development scoping and acceptance scoping.

VACU Model

Represents four stages in a continuum of decreasing understanding and increasing unpredictability about the future (as depicted in ‘The Strategy Manual‘, developed from the previously published VUCA model). Volatility is where you know what will happen but not when, nor for how long. Ambiguity is where there are a few possibilities. Complexity is where there are lots of possibilities. Uncertainty is where anything is possible. Representing unpredictability in this way prescribes what to do in response; e.g. in volatile situations, have better sensors, whereas in complex situations, get more or better knowledge and expertise.

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Value

Who benefits and how. In the Value Model of Strategy, value refers to a value exchange between you and the world.

Value Model of Strategy

A model representing strategy in terms of the three key defining features of strategic action: value, effectiveness and efficiency.

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Values
Important and lasting beliefs or ethical ideals shared by the members of your organisation. Used to guide what is acceptable and unacceptable, what is desirable and undesirable. Good values are significant and impactful.
Vision

A picture of the potential of your organisation. An audacious dream of your future. Intended to inform, inspire and energise everyone to realise that shared vision. Vision is the counterpoint to mission – it is not where you are now, but where you want to be.

Working governance of strategy

Ensures that strategy is effectively adopted across the organisation. This requires senior leadership to ensure that people and teams across the entire organisation know about the strategy, are committed to it and empowered to contribute to its success. Working governance encompasses the formalisation of authority and engagement and commitment. (See also Governance).

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