Our framework for strategy creation and implementation – Strategic Learning
Today’s competitive environment presents unique challenges for organisations, such as high levels of uncertainty and complexity, disruptive technologies, and a premium on speed, choice, and innovation. These new challenges demand a new type of dynamic strategy creation. This means creating an organisation with the built-in ability to sense and rapidly adapt to changes in the environment on a continuous basis.
Strategy is a singular thing. There is one strategy for a given business, not a set of strategies. It is one integrated set of choices. Creation of a strategy is a creative and analytical process. It is a process because particular functions are performed in a sequence over the period of time. The process involves a number of activities and their analyses to arrive at a decision. Even though there may not be unanimity over these activities particularly in the context of organisational variability, a complete process of strategy creation and implementation is a must to deliver sustainable results to customers and other stakeholders. Therefore, it is impossible to draw a line between strategy and execution. It is a pointless distinction that does not help the company in any way. In fact, it may rather be damaging. If you think about it, only a well-implemented strategy with winning results can legitimately be called great. A strategy that fails to produce a winning outcome is simply a failure.
A simplistic strategy-to-execution approach tends to fail at multiple levels when just top management thinks and chooses, and the rest of the organisation does what top management tells it to do. Strategy is not just choosing, and execution is not just doing. Everyone from the top of the organisation, all the way down to the very bottom, makes choices under constraints and uncertainty. Each time a frontline employee responds to a customer request, he or she makes a choice about how to represent the company, a choice directly related to the fundamental strategy and value the company is offering.
Strategic Learning – The framework for creating and implementing a winning strategy
The Strategic Learning strategy process framework has a four-phase dynamic cycle of learn, focus, align, and execute. The dynamic cycle has the same logic as the Plan-Do-Check-Analyse cycle which today is widely used to improve organisational performance. Like the PDCA cycle the four-phase dynamic cycle of learn, focus, align, and execute build on one another and are repeated to create and sustain a winning performance. The more often an organisation repeats this cycle, the better it becomes at doing it, thus enhancing its adaptive capacity. The result is a process of on-going renewal that characterises the truly adaptive organisation.
The essential starting point in The Strategic Learning process is the Situation Analysis — a systematic exercise in diagnostic learning. The Situation Analysis is the engine room of strategy creation. Its aim is very specific: to develop superior insights as the basis for the company’s strategic choice. All breakthrough strategies are based on unique insights. The task of the Situation Analysis is to generate superior insights into at least the following key areas:
• The company’s own realities
• Industry dynamics
• The broader environment
The Vision and Strategic Choices are the key deliverables of strategy creation. They are based on the insights generated in the Situation Analysis and represent the strategic focus of the company. A vision is a concise word picture of what an organisation aspires to be in the future and provides a clear sense of direction that everyone can understand. A successful strategy focuses on one of two things, either do things that no one else does or do things that others do, but in a different better way. Trying to compete by doing the same thing in the same way is not meaningful. The way decisions are made throughout an organisation has vital consequences for the strategy. The Strategic Learning process is designed to ensure that your choices are based on insights rather than guesswork and that you then make the most intelligent choice possible. The focus phase addresses these perspectives:
- Customer Focus, defines which customers the company will serve (and which it will not), and what products or services it will offer them.
- The Winning Proposition. This answers the question, “What will we do differently or better than our
competitors to achieve greater value for our customers and superior profits for our company?”
- The Five Key Priorities, a list of the top priorities the company will pursue to realise its winning proposition.
When the strategic choice has been clearly defined and decided on, the company is ready to tackle the issue of strategy implementation. The big question is, “How do we get our organisation to do what we want it to do?” In large, complex organisations, this can be a daunting task. The right competence, culture, processes, structure, disciplines, measurements, and accountability must be applied to close the gaps, and follow-through must be relentless. The key dimensions or pillars for aligning the organisation behind the strategy are:
• Structure and processes
• Measurements and rewards
The final phase, execution, is implementation and experimentation. Each phase of the cycle has its own sets of hurdles and rewards, and when done effectively, each phase builds on the previous one creating a powerful momentum behind the strategy. If all components are in place, then this cohesion will help to close the strategy-to-execution gap by executing the plan rapidly and successfully. But, the implementation of the strategy will only be as effective as the insights, focus, and alignment are. Execution is also both the final phase of one cycle and the first step into the next cycle. Hence, by working the way around the cycle again and again, the company continues to update its insights, learns and adapts to new conditions. Hence, the Strategic Learning process never ends.