How To Create a Strategy in Three Easy Steps
The word "strategy" gets used a lot in business and if you want an idea to be taken seriously, calling it a strategy immediately gives it gravitas and authority.
However, sometimes you may be called upon to create a "real" strategy, and it can be difficult to know where to start. But building a work strategy does not have to be difficult. In fact, the bigger your strategy, the easier it is to put together. If you have a clear idea of what your objectives should be, then creating it will be straightforward.
Perhaps the most difficult part of building a strategy is knowing how and where to start. It is common to have a gut feeling as to what your strategy should be, but putting it down on paper or explaining it out loud can be tough. This is where a strategy building framework can support your process and make the job easier, quicker; and most importantly it will make sure that the strategy you put together has a high likelihood of success.
Before we go into the Strategy Framework, it is probably a good idea to define what a strategy is. There seem to be lots of varied definitions and understandings of what we mean by strategy. And I'm not going to pretend I have the definitive answer because strategy means different things to different people. But it is important that we establish what strategy means for the purpose of this framework.
The most accepted definition of a strategy is that it identifies what you need to do to meet one or more business objectives. What it does not outline is how the strategy will be achieved as this part is covered by the planning stage where you identify the tasks and activities that are needed to accomplish the strategy. An easy way to think of it is that the strategy addresses the What (do we need to do) and the Plan focusses on the How (do we do it).
The Strategy Framework
The Strategy Framework can be used in lots of different scenarios. Not everyone is involved in building a large company strategy, but nevertheless the framework will still be useful to people at all levels of an organisation. Has anyone ever asked for your opinion on whether you think a particular project is a good idea, or what the team priorities should be?
If so, then this framework will give you the tools to answer these types of questions quickly and with confidence. particularly when you are under pressure to give your thoughts. More importantly though, this framework will give you the tools to explain why your viewpoint makes sense for the company or project.
There are three parts to this system:
Cascade of business objectives
Internal and external forces
Assembling the strategy
1. Cascade of Business Objectives
The cascade of business objectives is the most important part of the framework, and it is a very simple.
The aim is to connect a higher set of objectives with your own potential strategy. That higher set of objectives could be as far reaching as the main company goals e.g. increase revenue in Asia Pacific by 5% in 2021. Or it could be at a much smaller scale. For example, if you are working on a new software application project, one of the overall objectives could be to improve data entry efficiency by 15%.
Once you know your high level objectives, the next step is to come up with a strategy that is both within your control and will positively affect this overall high level objective. For instance, if the objective is to increase revenue in Asia Pacific by 5% in 2021, your strategy could be to sign 30 contracts in this region over the next 12 months. If you do this properly, your strategy will now have a direct link with the overall objectives of the company.
This approach can also be used for smaller "strategies". If you are asked for your thoughts on the direction a project should take, you could begin by looking at the overall objectives of the project. From here you will be able to use the same principles as before, and create a cascade from the project objectives directly down to your personal opinion. This gives you a very quick way of coming up with an easy and justifiable answer that puts the best interests of the project at the centre of your decision.
2. Internal and External Forces
As well as the cascade of business objectives, a strategy will be subject to internal and external forces. So once you have come up with your initial strategy using step 1, it can then be evaluated against these forces, and modified where necessary.
There are four forces you should consider:
Top Down
Market
Bottom Up
Resources
Top Down
The Top Down force is fundamentally very similar to the Cascade of Business Objectives from step 1. This is the drive from the top of the business down to your strategy; the needs from the top are directing the strategy.
Market
The Market Force is a factor that can sometimes be forgotten. The strategy is often moulded specifically around what the business is dictating, and sometimes you can forget to look at what the market actually needs. The Market Force will often be your existing customers or future customers you want to attract. So you need to listen carefully to what they are telling you.
Bottom Up
Who knows most about what direction the business should go in? I think it is often the people at ground level; the employees who are on the metaphorical shop floor.
The bottom up force takes the employee input into consideration when building a strategy.
Resources
The final force is the Resource Force which looks at what can be achieved with the resources and skillsets available. This force is easy to overlook because you don't want the success of the business to be dictated by resources. But if you are unrealistic and expect change to happen without the proper infrastructure, you will find that any new products and initiatives will be built without the proper foundations and may result in a gradual collapse of the structure.
When you work on a strategy you should build the four forces into it and this will create a set of objectives that are much more robust and realistic. If you carry out a proper analysis of the four forces you will find that strategic ideas will flow much more easily.
3. Assembling the Strategy
The final phase of constructing a strategy is to put it all together. The great advantage of going through stages 1 and 2 is that you can show the thought process that has gone into building your strategy. The journey you took is just as important as the final objectives you decide upon.
However, for me the real power of this three step framework is that it gives you a structure to use when you need to think on your feet. You may be in a meeting and asked to give feedback on an idea or project. And rather than simply saying the first thing that comes into your head, you can think of your answer in terms of the cascade of goals and the four forces. If you explain your thought process as you present your strategy or opinion, whatever final conclusion you give will be justifiable.
Because you are explaining the thinking behind your answer you will give yourself time to form your opinion effectively and coherently. Even if you are asked your thoughts on a relatively minor point, you can still run through this process when putting your answer together.
There are two things I really love about this framework. Firstly, if you follow the three steps it will not only result in a thorough strategic plan. But you will also be able to explain how you built the strategy using the cascade of objectives and the strategic forces principles. Secondly, this framework can be used just as easily for full strategic planning, smaller action plans or even giving opinions and feedback. It is vert versatile and is a great tool when you have to think quickly.