5 questions to ask when reviewing your strategy

-By Kevin Nuttall, Published on 2 November 2017

A client recently asked us to review their strategy development and execution process. Although we pointed out that we were not exactly unbiased arbiters, having been their strategy facilitators for the past 5 years, they were confident we would conduct a competent job.

To ensure we were as objective as possible, we developed the following 5 questions for the  research.  These questions were asked from their perspective:

 

  1. How well did we anticipate the future and set the right goals?

  2. How well did we build capacity to realise our goals?

  3. How well did we adapt our strategy as issues emerged?

  4. How well are we now positioned to compete?

  5. Are we currently working on the right things to remain competitive?

 

The conclusion for this client was that they had scored a ‘B’.  Interestingly, it was likened to getting a B at high school and, as they are now going into far more complex market conditions, getting a B at university was going to require a significant lift in focus and effort on developing and implementing their strategy.

The definitions of the grading scale are below.  How well does your organisation score? 

 

Grading Scale:

5 - Outstanding (leading the pack and able to continue to pull away from your competitors)

4 - Good (could have done better, but a very creditable effort)

3 - Average (no better or worse than your competitors but subject to shocks)

2 - Failed (losing ground to competitors, losing key people and partners; in need of a step change)

1 - Spectacular failure (not just failed but did it in the worst possible way; CPA comes to mind)

 

The context of each question is explained below. Tally up your score to get a better understanding of how you are tracking.

 

 

Question 1. How well did we anticipate the future and set the right goals?

 

You cannot predict the future but you can make informed guesses (‘hypotheses’ in consulting speak). In reality, your organisation controls very little. You are but one independent element in a very complex soup. Ingredients in this soup include geo-political forces, climate change, regulatory changes, demographic changes, digital tsunami, new left field competitors and the list goes on.

Your organisation's strategic imperative is to be ready and able to deliver value to your customers (or beneficiaries) now and into the future. In this complex and ever-changing environment, how well did your organisation go in the past, in setting goals that ensured you were relevant to your current customers?

 

Score 1 to 5

 

Question 2. How well did we build capacity to realise our goals?

Unless you are a startup, a full 90% or more of your resources will be allocated to running the core operating business.  New strategic initiatives get starved of vital resources and focus to succeed. Christensen famously called it the ‘Innovation dilemma’. You know you need to invest in the future but your ‘business as usual’ model consumes all of the available resources and, in fact, most already feel under-resourced.

It takes immense discipline to invest in the future in any meaningful way.  It is a bit like getting fit; you tell yourself, there’s always tomorrow.

Having observed thousands of companies execute their strategies over the years, there is clear evidence the successful ones conscientiously carve out the time and resources to consistently work on building capacity for the future.

How well does your company do with the resources allocated to strategic initiatives?

 

Score 1 to 5

 

Question 3.  How well did we adapt our strategy as issues emerged?

 

As previously discussed in our recent article - The Tipping Point of Complexity - our world is complex and by definition, unpredictable.

To paraphrase the famous Prussian General, Helmuth von Moltke, “no plan survives contact with the enemy”.

Like the modern military’s strategy, you have the commander’s intent but then the ground commander makes the decisions based on the realities of the emerging situation. This is a local and agile approach that is dealing with the realities as they arise and adapting without losing the intent of the strategy. For example, under this approach, there would have been no Charge of the Light Brigade.

This agile approach to strategy means, your strategy is ‘up for grabs’ every 90 days. This means stepping back from the execution process and taking an objective look at progress; testing your hypothesis against what you are learning from the field. You then accelerate the experiments that are getting cut-through and change or abandon failing experiments.

How agile or adaptive is your organisation to external changes?

 

Score 1 to 5

Question 4. How well are we now positioned to compete?

 

Is your organisation losing ground to more aggressive competitors, or are you gaining market share and gaining meaningful traction in new markets? This question can be answered by answering the subset of questions about your customers and your product/market fit:

Are you able to charge a premium because of leading innovation?

Are your customers loyal?

Are you able to attract and retain the new talent that you need to grow?

Companies that read the ‘tea leaves’ well and respond proactively perform better and become resume trophies for talented people.

How well are you currently positioned to win in your target markets?

 

Score 1 to 5

 

Question 5. Are you currently working on the right things to remain competitive?

 

Strategy development and execution is not an event, it is a continuous process that is never 'done'. Doing well in the past is no guarantee for the future. Just ask the 95% of the fund managers that fail to outperform the index over a 5-year term.

The question here is, are you resting on your laurels? Is there a continued sense of urgency about maintaining the strategic momentum? Andy Grove; having nearly buried Intel in the early days by ignoring the Japanese threat of cheaper and better ROM chips, coined the phrase, “only the paranoid survive”.

Does your organisation have a sense of urgency and a healthy level of paranoia?

 

Your score 1 to 5
 

How did you Score?

Add up your scores to the 5 questions. The ranking is:

21 to 25 = A

16 to 20 = B

11 to 15 = C

6 to 10   = D

1 to 5     = E

 

How well did you go?  Even if you got a ‘good grade’ remember our client’s conclusion - a B today is no guarantee of a B tomorrow.

We have developed a rapid collaborative process to obtain a consensus rating or grade on your organisation's strategy performance in less than 60 minutes.

If you are interested in a bit of reality therapy drop us a line.

 

 

Further Reading:

http://fortune.com/2016/03/21/andy-grove-fortune-classic/

https://hbr.org/2011/11/why-does-the-innovators-dilemm