Four Strategic Guidelines
November 7th, 2019
I was recently helping some clients think about strategy. As part of the training, I tried to convey a number of guiding principles, which often prove useful in developing strategy. Consequently, I thought I would share some of them with you, in the hope that they prove useful when you next embark on developing a strategy.
1. Strategy can be Simple
Strategy has a reputation for complexity and being difficult. The cynic in me feels such a reputation is, in part, generated by the consultancy industry, to justify why their expertise is required. While many look to key strategic ‘thought leaders’ for guidance with their strategy, I believe one of the most useful strategic frameworks comes from the author of The Jungle Book, Rudyard Kipling;
‘I keep six hoest serving men (They taught me all I knew);
Their names are
What and Why and When
And How and Where and Who’
To invoke Baloo the bear’s advice to Mowgli in The Jungle Book, strategy is about the ‘bear necessities’. It is about being clear on the key ‘Ws’;
- ‘Why do we do what we do?’
- ‘What positive difference do we make to society and how can we increase it?
- ‘Where are we now?’
- ‘Where do we want to go?’
- ‘Who do we need to get us there?’
- ‘How much will it cost and how long can we give ourselves to get to where we want to go?
It’s also crucial to be clear on ‘What is strategy?’ and ‘Why do strategy?’, but sign up to a training course, or wait for a future blog, if you want clarity on these particular ‘Ws’!
2. Focus on Decisions Rather than the Plan or Process
You’ll note that all the ‘Ws’ above are listed as questions. That is no coincidence. Strategy is all about making decisions. It’s about deciding how best to achieve your overarching goal, or to fulfil your organisation’s vision. Consequently, your strategy will almost certainly benefit from improving the quality of your individual and collective decision making.
Sadly though, many people rush straight to a strategic framework/template and then focus purely on completing its relevant sections. Instead, I’d encourage you to consider some key precursors such as:
- Who should be in the room when you do strategy?
Strategy is situational. It depends on your own organisation’s circumstances and what’s going on in both your direct environment and the wider world. A balance needs to be struck between a sufficiently large number of people to give diverse perspectives, to reduce the likelihood of strategic blind spots, and a small enough number of people so that timely decisions can be made.
Consequently, there is no ‘right’ number of people. However, two rules of thumb that can stand you in good stead are:
(i) Ensure at least some of the people who are going to be ‘doing the doing’ are involved. (ii) Remember that everyone likes to be heard (even if they are not agreed with).
- How can we minimise flaws and embed good practices in decision making?
There is a significant amount of research which highlights common flaws when making decisions. There are also some tried and tested techniques for making good decisions. The links below provide some insight into both:
As referred to in the first link, remember to feel as well as think. A strategy should excite, or at the very least satisfy you. So, in addition to analysis, be sure to tap into your intuition.
3. Embrace Assumption and Improvisation
While the process for developing a strategic plan lies outside the scope of this article, do remember that, regardless of the particular process you use, it should include some degree of analysis and experimentation. This is because I’ve yet to meet anyone who’s been able to articulate where they are now and where they want to go, without some sort of analysis/experimentation.
In my experience, analysis and experimentation can often create the most angst and fear during strategic planning. It is the strategic equivalent of the social condition, FOMO – Fear Of Missing Out. There are endless analytical frameworks and experiments you could employ, so doing them all would mean spending all your time analysing and experimenting, rather than actually implementing the strategy. However, if you can’t do them all, how do you decide which ones to do?
In my experience, the best strategists deal with this reality by being hypothesis driven. They discipline themselves to generate:
(i) The 1 minute ‘answer’
Then (if it’s worth pursing) the:
(ii) The 15 minute ‘answer’
Then (if it’s worth pursing) the
(iii) The 1 hour answer
Then (if it’s worth pursing) the
(iv) The half-day answer
and so it goes on.
The alternative, to do every piece of analysis/experiment fully, would simply take too long.
In my communications training I often state that:
“Assumptions are death to great communication.”
In strategy though, I find assumptions are essential – as long as you’re clear on the assumptions you’re making and how they will be tested.
The other key to successful strategic analysis and experimentation is improvisation. I’m often struck by the reverence with which analytical frameworks are viewed, and the subsequent reluctance to adapt and alter them. Given the situational nature of strategy, I believe there is always value in considering how a particular framework can be adjusted to best cater for your specific situation, or what you believe to be important.
To illustrate, a framework that I have personally adapted is Jim Collins’ ‘Hedgehog Concept’. The concept was born out of Collins’ research on the characteristics of consistently successful organisations. The term ‘Hedgehog Concept’ is a reference to Isaiah Berlin’s essay, ‘The Hedgehog and the Fox’. Berlin divided the world into two groups, based on an ancient Greek proverb, which pitted the two animals against each other. He characterised foxes as pursuing many ends at the same time and seeing the world in all its complexity. They are scattered and never integrate their thinking into one unifying vision. Hedgehogs, on the other hand, simplify a complex world into a single principle that guides everything. When faced with challenges, the hedgehog only focuses on things that relate directly to the unifying principle. Consequently, when foxes and hedgehogs are pitted against one another, the hedgehog always wins.
Collins claims that all consistently great organisations exhibit the ‘Hedgehog Concept’. In practice, this means that they operate in the ‘sweet spot’ of what they are passionate about, what they can be excellent at and what will make them enough money. Anything that lies outside the intersection of these three things should be of no interest.
This links back to one the fundamental ‘Ws’ I mentioned at the start of this article:
‘Why do we do what we do?’
I personally believe that a fourth circle needs to be added to Collins’ concept – ‘service’. To me, service means operating in a way that is enriching to staff and society as a whole. This therefore requires a focus on:
(i) The organisation’s physical and cultural environment, so that staff can bring their best selves to work
(ii) How the organisation contributes to enhancing social justice and social capital
(iii) Minimising the negative environmental impact of its operations
While mch’s ‘Hedgehog Concept’ creates a smaller sweet spot, decisions can become even clearer and, in my experience, life becomes all the sweeter for it!
4. The is no one way
As alluded to above, strategy is situational. Consequently, I do not recommend any particular strategic framework. I have developed and implemented strategic plans which are many pages long and include numerous pictures, case studies, charts, graphs, bullet points and action plans. I have also developed and implemented a plan that was hand written and covered two sides of A4. Both were equally successful.
I am comfortable with the format of any plan, as long as it clearly conveys:
(i) Why you’re doing what you’re doing and why it has value
(ii) Where you are now, where you want to go and why you want to go in that particular direction
(iii) A plan of action and how the plan will be reviewed
Furthermore, the best strategists I know have several formats for their plan. They know the strategy is likely to be shared with different audiences, so they tailor the format to give each audience what they want and need. They are also able to tell their strategy as a narrative. They appreciate that people remember stories far better than bullet points and graphs. They also know that stories tap into emotions which are more powerful motivators than pie charts. Furthermore, they understand that, unless they can explain their plan to a lay person in simple, compelling terms, then they’re not clear enough on it themselves.
I hope the above principles prove useful. Do let me know about any frameworks you’ve modified, or even created, to best serve your strategic endeavours.View comments >
How Strategy is Really Developed
February 9th, 2017
In my view, strategy provides the detail as to how an organisation proposes to achieve its overarching vision and mission. If you pick up a typical ‘How To’ guide to strategy, it is often presented as a neat step-by-step process or framework. Follow the prescribed steps and out will pop your strategy. As a former associate at the international management consultancy firm McKinsey & Company (a firm that specialises in strategy), I was taught that while there were different ways of ‘doing’ strategy, there should always be a process of some sort. While I still believe that there can be real value in developing strategy through a formal process, this blog post offers a less formal and more meandering route to developing strategy. Such an approach is illustrated through describing a series of events that assisted mch in making a recent strategic decision.
The Ordinary Event
I recently finished writing mch’s annual Corporate Social Responsibility (CSR) Report. CSR involves operating a business in a manner that meets the ethical, legal, commercial and public expectations which society has of business. Upon completion, I reflected upon the year just gone and compared it, in CSR terms, to previous years. One of the areas of particular reflection was community engagement, which in mch’s case took the form of charity donations and volunteering. From such reflection, the following question formed:
‘How could mch increase the positive impact of its community engagement?’
With no immediate solution forthcoming, the question was consumed by the more immediate, day-to-day questions mch faces. In retrospect though, this ordinary event planted the seed which led to mch’s new initiative. Despite strategists often extolling the virtues of ‘blue sky thinking’ and ‘thinking outside the box’, I believe good strategy can start from simply taking the time to reflect upon the existing, ordinary work that is being done (or not being done).
The New Event
Within days of completing the CSR report, I came across an initiative called the Percent Club. This club is aimed at businesses based in Bath, England (the city closest to mch’s offices). A key requirement of membership is that a business gives at least a percent of its profits to charity, whether through financial or in-kind donations. To encourage such giving, the club organises regular events at which local charities give a brief presentation outlining their work. mch has always donated well over one percent of its pre-tax profits to charities and so was readily able to join. Doing so allowed me to attend one of the club’s events, at which the impact of in-kind support, rather than just donations, was really stressed. Specifically, members were asked to consider whether any of their specialist goods or services would be valued by charities. Not surprisingly, the event reminded me of the question I had asked myself upon completing mch’s CSR report. However, given the event’s focus on in-kind support, a more nuanced question arose:
‘What combination of financial donations, volunteering and in-kind support would lead to mch having the greatest positive impact on community engagement?’
Being an organisation that works exclusively with Third Sector organisations, providing in-kind support in mch’s core work of staff development has the potential to be problematic – if it offers one organisation in-kind or pro bono support, then full fee-paying clients may expect the same. For this reason, mch has previously limited its in-kind support to discrete mentoring sessions for individuals who have no means of paying. Instead I have focussed on volunteering in areas that fall outside mch’s core work e.g. volunteering for literacy lessons at the local school.
The new event highlighted that there could be scope to improve mch’s community engagement, but it also raised a complication. Complications invariably arise when developing strategy; I’d be worried if they didn’t. Complications indicate you’re on the right track, as fundamentally any worthwhile strategy should be about removing pain and/or maximising benefit. Complications can simply indicate you’ve come across one of the pains.
The Chance Encounter
A day or so after the Percent Club event, I received a call from a small, local charity enquiring about communication training. They had been given my details by Sue, a resident in my village. Sue had only recently learnt about ‘what I did’ on account of us both attending a local event. For me, this illustrates how you can never tell where insights for strategy will arise.
After ascertaining the charity’s need, I gave a brief outline of how I felt mch could address it. The caller seemed really pleased with the outline, but as soon as we got onto costs, it became apparent that they had insufficient funds for the training.
Looking to Others who are Similar
Such a call is not uncommon and the ending never feels satisfactory. However, the challenge of finding a fair and simple way of working with both small, local organisations and large, national ones is not unique to mch. Realising this is important, as sometimes the best strategic solution comes from observing what similar organisations are doing and then copying them. Consequently, I have reflected on the fact that other staff development organisations offer a ‘small charity rate’ for their services. However, I have never been inclined to go down this route – I have a single preparation day rate and a single presentation day rate. In part, this reflects my desire for simplicity. It also avoids getting into the hazy area of what constitutes ‘small’. Finally, the biggest cost within mch’s fees is my time and I believe the size of an organisation has no bearing on the value of it.
Engaging with Others who are Different
In addition to observing how similar organisations address an issue, I also find that there can be real value in discussing strategic plans with those outside of my specialism and/or sector. So it was in this instance, as around this time I was fortunate enough to have a conversation with the partner of a small firm of patent attorneys. Knowing her well, I was able to be candid and to articulate the issue within a ‘safe space’ - one in which I knew I would not be judged. Through a combination of active listening and comparisons with her own work, the strategic question became even more nuanced:
‘If there was some way to provide in-kind support to charities that would otherwise be unable to afford it, how could such in-kind support be maximised?’
Taking in the Broader Landscape
As someone who subscribes to a sector-specific journal, articles continually reinforce the challenging economic and statutory environment charities face. Within a staff development context, the challenging environment makes it ever more important for charities to have skilled staff. In short, there is a need to provide more staff development to more people. However, increasing demand for services, combined with reduced resources, makes staff development more difficult.
Looking at the broader landscape made me appreciate that the challenging environment for charities was unlikely to go away, and neither were the unsatisfactory calls with charities with a clear training need but an insufficient budget.
A readily proposed solution to these challenges is greater collaboration: generate economies of scale by sharing resources. Despite this undeniable logic, the practice of greater collaboration is often far harder than the principle. One difficulty can be developing the requisite trust for successful collaboration. Also, an initial increase in costs may be required before savings start to be made. Furthermore, there can be complications in managing resources that you don’t actually have authority over.
However, given that the training element of staff development can be quite discrete, it struck me that if charities joined forces to access training, they might not face the collaboration problems outlined above. Furthermore, such collaboration would lead to more people being trained per training course, thus maximising the positive impact of any given training session.
Rather paradoxically, looking at the broader landscape helped me narrow down the type of in-kind support that would be most suitable. I’ve found such paradoxes to be common in strategy.
The Initial Solution
Based on all the above, a potential answer to my strategic question emerged, namely that provided at least two charities partnered together to present a shared training need, mch would split the cost evenly between itself and the partners. Consequently, if a training need was presented by two charities that would ordinarily cost £1,200 to deliver, mch would make an in-kind donation of £400 and only charge each charity £400.
Such a solution acknowledged the reality that many charities do not have sufficient funds to access quality training. The required partnership working would also maximise the number of training beneficiaries.
Reality Checking and Considering One’s Appetite for Risk
Since mch works exclusively with Third Sector organisations, its business model is based on what is sustainable rather than what is lucrative. Consequently, there are genuine limits to the amount of in-kind support it can give. My initial sense was that mch would not be inundated with requests to take up the proposed offer. However, I’ve learnt that it is worth asking a few ‘What if?’ questions when developing strategy. In this case, an obvious one was:
‘What if mch is inundated with requests for this offer?’
For a number of reasons, such a scenario would be best avoided. However, such a risk is readily mitigated by setting clear expectations. Consequently, the initial solution was iterated so that the offer would initially be available up to twice a year on a first-come, first-served basis.
Strategy often focuses on external impact. However, in my experience a successful strategy depends as much on internal motivations as it does on external opportunities and needs. Consequently, for any strategic initiative, it pays to have a compelling answer to the, ‘What’s in it for me?’ question that almost all staff will be thinking, even if they don’t say it.
Running concurrently with the above ruminations to increase mch’s community engagement was a personal desire to increase the amount of work I conduct locally (so that I was away from my children less often). Consequently, I felt that incorporating this desire into the solution would make it more motivating and sustainable. To this end, the initial solution was iterated further so that the offer would only be available to charities in the Bath area of England.
Being Comfortable with the Flaws
Rarely is a solution perfect. Fortunately, it very rarely needs to be. That said, I’ve found it useful to be aware of and comfortable with the flaws in any strategy. There are obvious flaws to mch’s proposed offer. For example, the likelihood of two organisations having the same training need at the same time (and knowing that they both have the same need) is low. There’s also a risk that the offer will not go to those in most need and that it will cannibalise my business, i.e. the offer will be taken up by two charities that would have been able to pay separately for the training.
While I accept these (and several other) flaws, I am still comfortable with the offer, as at its heart it provides an opportunity for certain charity staff to gain access to training that they otherwise wouldn’t .
Bringing it All Together
The result of this meandering path is that mch is excited to be piloting a new initiative for local charities. Essentially, provided at least two local charities can partner together to present a shared training need, mch will split the cost evenly between itself and the partners. For practical and personal reasons, this offer is only open to charities in the Bath area of England and will initially run twice a year on a first-come, first-served basis. Consequently, if you’re a local charity, please get in touch!
On reflection, I see that some of the events and experiences outlined in the above meandering path would find themselves in many formal strategic frameworks, albeit under a different name e.g. ‘Looking to Others’ and ‘Taking in the Broader Landscape’ could quite accurately be translated into business speak as ‘Market Analysis’.
Furthermore, I think it is fair to say that I was already aware of many aspects of this issue right at the beginning of the meandering path. However, it took a series of events and experiences (many of which were completely unrelated to my ‘day job’) to make something happen. Crucially, it also required time - time to attend the events and have the experiences and time to reflect upon them. A favourite quote of mine by the philosopher, psychologist and educational reformer, John Dewey, seems particularly relevant:
“We do not learn from experience…..We learn from reflecting on an experience.”
Some readers may consider that the above approach to strategy may be appropriate for very small organisations such as mch, but simply not practical for larger ones. If you are one of them, I would certainly acknowledge that, in larger organisations, there is a greater need to coordinate the strategic effort and that formality and process is often necessary for such coordination. However, I would direct you to a book called Obliquity by John Kay (a former mch ‘Resource of the Quarter’). The central premise of Kay’s book is that goals/strategies are best achieved indirectly. For me, a key insight from the book is that no matter how sophisticated your strategic frameworks or how much intellectual ‘horsepower’ you have, life is just too complex to make detailed and accurate plans for well into the future. I’d encourage you to read the book as it challenges some of the core assumptions that many managers and leaders make when developing strategy. Alternatively, an essay John Kay has written on obliquity can be viewed here.View comments >
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