Strategy Overview

Strategy has nothing to do with whatever is currently going on inside the organization. Strategy begins by discovering, exploring and understanding the forces of change that will shape the future external business environment. Once these dynamics have been assimilated, the Strategy team will be in a position to define a unique perspective on how the industry should be different in the future, as well as the roll that the organization will play in that necessary future.

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Strategy Team

Effective strategy development is the single most important activity in any organization. Selection of the strategy team should should be done very carefully.

Because effective strategy development begins with exploring the external business environment and developing a unique perspective on how the future should be different, the strategy team should consist primarily of individuals with a deep understanding of the various elements of the value network in which the organization participates and forces of change at work in the business environment. When these individuals include senior-level managers, the following caution should be observed.

Conventional wisdom suggests that the Strategy team should consist primarily of the senior-most managers within the organization, because they are the people who will have to manage the transition from the current state to the defined future, and because their participation will result in their buy-in and commitment. However, this traditional approach can have unintended consequences if not proactively handled. Instead of inspiring other key participants to think creatively about new ideas, the presence of senior-level managers may cause subordinants to defer to the positions of their superiors. Subordinants may have difficulty moving beyond simply reinfocing the status quo that the superiors represent. To suggest anything that is potentially disruptive to status quo might be interpreted as disrespect or insubordination. Depending on how autocratic the managment style may be, a strategy team dominated by one or more legacy managers can have difficulty achieving anything but incremental change, unless someone is there to help objectify the behaviors of both the managers and their subordinants. An experienced leadership adviser should be able to provide the coaching necessary to overcome this obstacle. If any senior-level managers or executives will be included in the strategy team, it is very important that their participation be appropriately conditioned. In some cases this may even include members of the Board of Directors of the organization, particularly in privately-held companies or where majority shareholders are involved.

To help organize the work of a strategy team, a high-level diagram should be created to accurately depict the value network in which the organization participates, with special emphasis on downstream and flanking value network participants and their roles.

In some cases it is desireable to include individuals actually representing specific value network participants, depending on the ability to create mutual benefit and disproportionately greater value. This is particularly true for individuals representing “flanking” or “downstream” perspectives, although “upstream” (supplier) perspectives should also be considered. Flanking perspectives are those of potential collaborators, complimentors or co-opters. Downstream perspectives are typically those of customers or customers’ customers. Particular caution needs be exercised when selecting individuals to represent customer perspectives because of the expectations that may be created through the process. Sometimes, customers really do not know what they need, although they usually know exactly what they want.

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Strategy Processes

Define the Organization’s Mission

An organization's mission is its essential purpose, its reason for being.

This essential purpose remains substantially constant over the lifetime of the organization, and should provide the foundation and boundaries for a BOLD Strategy®. Although certain situations (such as mergers, acquisitions, discontinuous changes in the external environment or value network, and, best of all, strategy-driven value network innovation) may, in fact, warrant a redefinition of the mission, these situations typically represent the end of the old organization and the creation of something new, a new organization for which a fresh BOLD Strategy is required.

The accurate expression of an organization’s mission can take some time to develop, but a clearly defined, structured approach can significantly reduce the time required to articulate the organization’s essential purpose, and may prevent many common pitfalls, such as semantic arguments, endless debates, and overly simplistic or overly complicated expressions of the mission.

One frequent and unneccesary debate relates to the question of who is the primary beneficiary of the organization’s purpose. Groups of manager who try to articulate their organization’s mission often get bogged down with parochial views of their collective purpose as it relates to the various stakeholders they individually serve. Without the benefit of a tightly constrained approach, debates break out over whether the organization’s essential purpose relates to customers or owners/investors, or even employees, suppliers, society, etc. The most difficult of these debates is the customers vs. owners/investors. Customers provide the revenue stream and are the primary beneficiaries of the organization’s outputs. The owners/investors, who sponsor the capital base, receive a byproduct of the organization’s collective effort, and can be a fickle group. Having no essential motivation for loyalty, investors shift their positions in the larger value network much more frequently then do the “chained” value network partners (customers and suppliers). Customers are the only reason the organization exists, and to think otherwise is, inevitably, toxic to success.

Define the Strategy Space

Establishing appropriate limits on the scope of the strategy development and planning activity is critical to achieving a sufficient level of focus while, at the same time, allowing enough freedom to explore broader areas of potential impact, opportunity and initiative.

Limits help to establish “What is NOT included?” Strategy development challenges established boundaries. Unspecified or unclear limits can lead to wasted time and effort, and may produce results that are too broad to enable the people in the organization to sufficiently focus their efforts and achieve success. Excessive limits will reinforce status-quo thinking and produce a result that is too narrow to provide access to the greatest share of future opportunities.

Define the Necessary Future

Explore the elements of the business environment and value network to develop a rich understanding of the forces that will shape the future. For each element, identify specific trends, project the eventualities, project the external environment forward and consider the new dynamics. Use advanced visualization techniques to make the future palpable. Then, imagine the consequences. Using structured decision and risk analysis techniques, identify key opportunities, threats, discontinuities, and leverage points.

Armed with all of the resulting insights from this exploration, decide how the future of the whole will necessarily be. Keep in mind that goodness is ultimately defined from the end customer's perspective.

Once the necessary future has been defined, define the role the organization should play in that future. Identify the prime opportunity space and the unique capabilities required to attain the prime position. Characteritize this strategic approach in the context of the necessary future and the goodness it will bring about.

Finally, communicate the necessary future to all relevant stakeholders, keeping in mind their unique perspectives, and expectations. Carefully consider the intended messages for each, and consider using events to make the communication experiential.

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