Kristin Brooks, Sr. Technical Program Manager
In the world of business, creating and implementing an effective strategy is crucial for success, but what is strategy?
At its core, strategy is; defining WHAT you want to achieve and HOW you will achieve it. Sounds simple until you find yourself in this scenario:
It’s Strategy Week, and the leadership team has gathered to create next year’s strategic plan.
You begin with sticky notes, a whiteboard, and sharpies and collect everyone’s ideas and actions, expecting to end the week with a strategic plan. Unfortunately, this is what Mark Ritson, Marketing PhD and author at Branding Strategy Insider, calls “the risk of tactification” - suggesting actions without first diagnosing the challenge.
In this scenario, the team needed to distinguish between strategy and tactics and ultimately found themselves with an unwieldy list of tactical actions untethered to a challenge. As a result, the group walked out of the room with a very long and unorganized to-do list.
What could have been done differently to affect a more coherent outcome?
I’m so glad you asked because that was our team a few years ago! So now, let’s look at how we moved from an overwhelming list of unrelated actions to a coherent action plan and successful strategy implementation.
WHAT Makes a Good Strategy?
Richard Rumelt, a renowned strategist and professor emeritus at the UCLA Anderson School of Management, answered us in his book, “Good Strategy Bad Strategy: The Difference and Why It Matters.” First, we needed a “Strategy Kernel” made up of three basic elements.
A Diagnosis: using the classic 5 Ws model (who, what, when, where, and why), our team was able to take a complex reality and break it down into our key challenge, which provided a framework for our strategic direction.
A Guiding Policy: setting guidelines kept us focused on actions aligned with our challenge. Rumelt describes it as “like the guardrails on a highway, the guiding policy directs and constrains actions in certain directions without defining exactly what shall be done” (the coherent actions finalize specific actions).
Coherent Actions: everyone’s favorite part - how we make our strategy a reality! The key is the word COHERENT, where actions and implementation tactics are coordinated and support each other, ensuring everyone is working together towards the same objectives.
HOW we Created our Coherent Plan
Framed our Strategy: Using a Strategy Canvas as our template, we diagnosed our challenge, set our areas of criticality, and identified a guiding policy which was eventually printed and placed in the workshop room so we had a front-and-center reminder of our Strategy Kernel. Ideally, diagnosis and guiding policy are set well before Strategy Week.
Held Breakout Sessions: With the diagnosis and guiding policy set, we moved into facilitating employee breakout sessions, each with a focused topic related to an area of criticality as defined in our diagnosis. These sessions gave us a broader scope of information and actions from those on the front lines.
Because of the amount of data expected to be collected, we set up a simple process using an impact/effort matrix, stickies, and sharpies.
Assigned each breakout topic a unique color sticky note
Participants plotted the stickies on an impact/effort matrix
Sticky notes had to be actions aligned with our guiding policy
We ended up with something like this, which gave us a head start once we began ranking our coherent actions.
We held these sessions both before and during Strategy Week. It is vital to complete them before you begin building your Coherent Action Plan.
Year in Review Retrospective: We ARE a software consulting company living and breathing Agile, so of course, we kicked off Strategy Week with a retrospective. I like this approach because it immediately brings the team together, and adding a voting element to refine topics further, begins the alignment process on coherent actions. All actions resulting from the retro were plotted on our impact/effort matrix.
More Breakout Sessions: Over two days during Strategy Week, we held additional breakout sessions based on areas of the business we identified as being impacted by our diagnosis. The sessions, like the ones held before Strategy Week, produced a mix of coherent actions that helped us move the company forward in that area.
Rank the Coherent Actions: This was the final day of Strategy Week, and we all filtered into the room that morning, greeted by a matrix filled with 100+ action items awaiting ranking (cue more coffee!).
As mentioned above, using the impact/effort matrix made the ranking task easier by plotting the actions on our Strategy Canvas with Quick Wins in the green zone, followed by Big Bets and Fill-Ins. Anything plotted in the Time Waster quadrant fell out of the ranking. As you can see, our Strategy Canvas was starting to fill up.
Now what? There were still a lot of actions, and we were getting anxious, wondering how we would get all this done. So, we took a moment to breathe before moving on to our final step.
Build the Coherent Action Plan: Using our Strategy Canvas, we quickly filtered our ranked actions by placing them on our Coherent Action Plan or moving it to a parking lot. This step takes a lot of discussion, and often actions are grouped into one related action. Still, the result is a manageable plan with coherent actions that can be managed and executed across teams in a coordinated way.
Our final Strategy Canvas looked a bit like this, with our actions organized by area of criticality.
Managing and Executing the Plan
Whew. If you are still with me, I suspect you’re thinking, “Cool, but how do you MANAGE the plan?”. It seems like now is an excellent time to touch on prioritization and why it appears we’ve overlooked that ubiquitous step in our process. We didn’t. We do not need to prioritize our plan because all actions are equally crucial to achieving our challenge. So instead, we’ve prioritized the challenge and the actions sequence accordingly based on how they relate to each other and team availability, and they are adjusted to reflect new knowledge.
Rumelt says, “Good strategy is designed to be COHERENT – all the actions an organization takes should reinforce and support each other. Leaders must do this deliberately and coordinate action across departments. Bad strategy is just a list of “priorities” that don’t support each other, at best, or actively conflict with each other, undermine each other, and fight for resources, at worst.”
To be honest, this shift in approach has been a bit challenging. Still, it’s also been a “light bulb” moment for us as we realized there is a harmony between Rumelt’s Good Strategy Bad Strategy framework and Agile methodology.
Both emphasized planning to plan, meaning go, do some of the things, and then come back every few weeks to check on any adjustments needed to the plan.
We keep it simple, using tactics that work for a company our size. For example, the team responsible for leading the execution of the Coherent Action Plan created a Scrum board to plan, track, and adjust the plan every four weeks. Applying Agile tactics keeps us accountable, creates transparency, and makes seeing where each action sits straightforward.
We report on accomplishments as they happen and provide a quarterly company overview of what’s complete, what remains, and any adjustments.
In conclusion, Richard Rumelt’s framework for good strategy has been an excellent tool for strategic planning. By focusing on the essential components of a good strategy, we have focused on the company’s most critical challenges. It provides clarity and direction to the organization, promotes flexibility in implementation, and ensures that everyone is working towards a common objective. By following this framework, a company can develop and execute an effective strategy that leads to success.
Richard Rumelt "Good Strategy Bad Strategy: The Difference and Why It Matters"
Mark Ritson “Branding Strategy Insider” [https://brandingstrategyinsider.com/author/mark-ritson/]