I was asked by a close friend recently, how I go about setting strategy, and what my methodology is for rolling this out.
As a strategist, I’ve found that having a clear and effective framework is essential for developing a winning strategy. In this post, I’ll share my approach, which combines the “Good Strategy/Bad Strategy” core kernel with the OKRs (Objectives and Key Results) framework. This potent combination allows me to diagnose the key challenges facing a business, set guiding policies, and establish clear objectives and initiatives to drive success.
The Power of Diagnosis
The diagnosis phase is critical to any strategy. It’s where you synthesise data into insight, identifying the key challenges and opportunities that will inform your strategy. You can use various frameworks to inform the lenses to apply to your diagnoses, for example Porter’s 5 Forces or McKinsey’s 7-s model, to understand both the competitive landscape, as well as internal forces and pinpoint the factors that are impacting the business at that present moment.
But diagnosis is not just about gathering data; it’s about using that data to develop a deep understanding of the business’s context. I ask the tough questions: What are the key drivers of growth? What are the biggest threats to success? What are the areas where we can differentiate ourselves from the competition?
The Importance of Memo Culture
I’m a big fan of Amazon’s memo culture, which emphasises the use of long-form memos to explain your thinking in a way that can be interrogated. This approach encourages clear thinking, clear communication, and a willingness to be transparent and open. It’s the antithesis of the “black box” approach, where objectives are set without any clear explanation or justification. I use a long form memo to socialise my diagnosis with the extended leadership team, so that it can be challenged during the formation phase, and ultimately with the whole organisation during the socialisation phase, so that the background that went into the strategy is clearly understood by the whole organisation.
From Diagnosis to Guiding Policies
Once I have a clear diagnosis, I use it to inform my guiding policies. These are the overarching objectives that will guide our strategy and decision-making. I formulate these objectives by asking: What are the key choices we need to make to navigate our current challenges? What are the essential actions we must take to achieve our goals?
Objectives and Key Results
With guiding policies in place, I establish clear objectives and key results using the OKRs framework. This involves setting specific, measurable goals that are aligned with our guiding policies. I also identify the key initiatives that will drive these objectives forward. I will typically do a draft of these together with my diagnosis memo. This allows my extended leadership team to understand how the strategy may be implemented. It makes it real, it takes it from the conceptual domain, to the implementation domain and it encourages immediate and real critique.
But here’s the key: I don’t just stop at the “what” – I also provide guidance on the “how.” While it’s true that people want to know what to do, not how to do it, they still need some direction. That’s where Impact Mapping comes in. This technique helps to fill in one of the weaknesses of the OKR framework. It help you to identify the actionable initiatives that will drive the key results.
Collaboration and Iteration
I don’t develop our strategy in a vacuum. I work closely with the leadership team to refine our objectives and key results, and to develop the impact maps that will guide our initiatives. I also encourage everyone to challenge my diagnosis, and I’m willing to adjust it if necessary. This ensures that we’re all on the same page, with a shared understanding of our context, our choices, and our objectives.
Whilst being very open to change during the formation phase, there will come a time when I ask the extended leadership team to commit. They either volunteer into the strategy or they are conscripted in, there is no fence sitting. It is important to allow enough time for this, as many times there may be an individual who isn’t comfortable. The trick here is not to force them to agree, but to open the floor again, as a team truly explore alternatives to see if there is another option. You will either find one together, or agree all together to move forward, and then ensure that everyone feels heard and consulted, even if ultimately the strategy goes in a different direction. The last thing you need is people in the leadership group, not fully committed to the organisational strategy. (I am amazed how often i’ve seen this to be the case in organisations throughout my career.)
Cascading Strategy
Once we have our strategy in place, we cascade it throughout the organisation. This involves breaking down our objectives and key results into smaller, more manageable initiatives, and ensuring that everyone understands their role in driving our strategy forward.
A member of the extended leadership group will typically be assigned as the responsible person for the initiative, and someone from the group will also be assigned as an alternate. This is both for contingency, but also because I have found people tend to work better in pairs. It avoids the analysis paralysis that can become a problem when trying to break new ground.
Conclusion
Crafting a winning strategy requires a combination of analysis, creativity, and collaboration. By using the “Good Strategy/Bad Strategy” core kernel and the OKRs framework, I’m able to develop a clear and effective strategy that drives success. But it’s not just about the tools and frameworks. it’s about the mindset and culture you bring to the process. By embracing transparency, collaboration, and a willingness to challenge and refine our thinking, we can create a strategy that truly drives results.
Recommended Reading
If you’re looking to deepen your understanding of strategy and how to develop a winning approach, I recommend checking out the following books:
- “Good Strategy/Bad Strategy” by Richard Rumelt
- “The Art of Action” by Stephen Bungay
- “Measure What Matters” by John Doerr
- Impact Mapping at impactmapping.org
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