What Is The Anatomy of Strategy?
by Tom Wright, on Mar 28, 2018 9:13:09 AM
Every organization has a slightly different way of putting together their strategy. Perhaps they use different terminology, include different things, or use different frameworks. That's the reason that we haven't tied our strategy execution platform Cascade into any one way of doing strategy. Rather, we made it flexible to suit the needs of just about any strategy setup I've ever seen.
But never-the-less, I'd say that on at least 75% of the deployments we do on our platform, I get asked the question:
What's the best way of setting up my strategy?
In this article, I wanted to address the anatomy of strategy- the foundations of what I consider to be a solid strategic plan. You'll want to tweak and modify this framework to meet the needs of your own organization, but it should give you a pretty good starting point.
Let's start by taking a look at a quick graphic we've put together:
Now let's start to break down the constituent parts. Each part is linked to a relevant guide so you can deep-dive into that aspect of the plan later:
Level 1 - Framing
Level 1 of a strategy is all about the following things:
- Framing your objectives at the very highest level
- Creating a pinnacle of achievement to inspire your people
- Setting the boundaries about what you want to achieve and how you'll go about it
You won't find anything too tangible in level 1 of your strategic plan. It also shouldn't change too much over time. That means you need to spend a good amount of time ensuring it's just right. The nature of a strategy cascade is that everything from here onward will be flowing back to deliver on your vision.
It probably shouldn't be a surprise that the most successful strategies start out with a really great vision statement. Something inspiring, ambitious, and that's easy for everyone in the organization to link their goals back to. You can include your mission statement here if you want to as well.
[Read: How To Write a Vision Statement]
Very close behind your vision statement, and indeed at the same level, should be your values. These are the how statements from a behavioral perspective that describe the essence of you organization as you strive towards your vision. Whilst not strictly strategic, they're a key part of framing who you are as an organization.
[Read: Creating Your Company Values]
Level 2 - Planning
Level 2 of a strategy is where you start to talk about specific things you want to do. It's still relatively high level, and at this stage you'll only be describing in general terms the things that you will focus on to achieve your vision. The point of level 2 is to:
- Break down your vision into tangible areas of focus
- Ensure your approach to strategy matches your strengths as an organization
- Provide guidance to your team about what your vision means in real terms
There's only one element to level 2 of our strategic plan - but it's a biggie...
Focus areas are high-level groups for your strategic plan. Think of them as an extension of your vision statement, for example:
Our vision is to produce and sell locally sourced cakes that are so delicious and satisfying, that every customer who leaves our store does so with a smile.
We will achieve this by focusing on quality, customer experience and taste.
I've highlighted the focus areas for this business in bold. The sense check should be: 'If I deliver against all of my focus areas, will I achieve my vision?' - If the answer is yes, you've nailed it.
Level 3- Outcome Setting
Level 3 is where the hard work really starts. You've got a high level vision and focus, but now it's time to start setting specific outcomes and objectives to determine how well each of your focus areas is progressing. Level 3 is all about:
- Creating outcomes for your business within each focus area
- Being able to tangibly measure the success of your focus areas and therefore your strategy
Again, we've only got one element sitting at level 3 - but this is the part of your plan that you'll probably spend the longest time on. It's also the point where you really need to start delegating to people in your team, if for no other reason than to secure their buy-in.
The specific element at level 3 are called objectives (we've used the word objectives over 'outcomes' simply because it's a more familiar business term - but essentially we're talking about the same thing).
Your objectives should sit inside your focus areas, and need to be written as action statements with clearly defined outcomes. Keeping our bakery example from above, a typical objective that might fit within their 'taste' focus area could be:
Receive recognition at a national level through awards, press and online reviews
This is not specific enough to be a goal (not yet) but it brings a tangible outcome to our 'taste' focus area, by which we can measure its success. It's fair to say that if we receive the recognition at a national level, we're delivering against our focus upon 'taste'.
Level 4 - Project Creation
The final level of strategic plan is where all the action happens. These are the goals, projects, and KPIs that turn your objectives into real work done by real people. This may sound obvious, but so many strategies fail because people don't take the final step of linking their grand designs to actual work that needs to be done. If you want your strategy to be more than just a PowerPoint presentation, this step is critical. Level 4 is all about:
- Creating SMART projects that will turn your objectives into reality
- Being realistic about your resources and limitations
- Assigning clear accountability for each aspect of your strategy
These are the specific things that you're going to to do to make your strategy happen. Projects are not goals - projects deliver goals. For example, let's say I have a goal to 'Increase levels of customer satisfaction by at least 50%' - to deliver that, I need to actually do something. So a project might be something like 'Open new contact center in London'. It can sometimes be a little hard to distinguish between goals and projects. If something has a series of specific tasks underneath it that need to be completed in a certain order, you're probably talking about a project rather than a goal.
Read: [How to Create Effective Project]
KPIs (Key Performance Indicators) are specific measures that you will put against each of your Objectives to measure their success. Remember, your Objectives won't necessarily have specific measures built into them, so you need to build them out as part of level 4. Here at Cascade, we have an Objective to 'Increase our online presence' - and underneath that we have a series of KPIs including 'Increase number of annual website visitors to xx'.
KPIs can either be leading or lagging. That means that they can either measure things that indicate success will come (leading) or they can measure the success itself (lagging).
How Do I Apply This?
In reality, there are lots of different words you can use to describe the different levels of a strategic plan - but the overall structure should almost always mirror our 5 levels above.
If you're already using a strategy execution platform like Cascade, you can just follow the structure in that system to build out your strategic plan. If you're not yet ready to try a strategy tool (ours is free for 14 days, so you really don't have much to lose!) then you might also want to consider downloading our strategic planning template that lets you build out the above sections in Excel.