Showing posts with label articulation. Show all posts

The importance of articulation in business strategy development and execution

The question of articulation doesn't get nearly enough attention in business strategy.

Articulation is the ability to express every aspect of your business strategy in a way which is:

crystal clear,
engaging and
encourages aligned action.

It applies to:

Your strategic analysis: Is it insightful? Does it create those aha! moments for your audience?
Your strategic goals and initiatives: Are they clear and unambiguous?
Your results tracking: Can everyone clearly see your strategy succeeding?
Each step in the process of gathering inputs and developing the strategy, as well as communicating the output.

There are four critical success factors for business strategy articulation.

Communicating clearly and precisely.
Telling a story.
Leaving everything else out.
Being consistent.

Communicating clearly and precisely

This should go without saying. But we've all been on the receiving end of communications which are jam-packed with jargon and waffle, repetitive redundancies, which go on for ever without ever seeming to reach a conclusion or make a point and leave you wondering what the communicator meant or what you are supposed to do about it. (Yes, that sentence is deliberately poorly written.)

Make sure your strategy is not guilty of this.

Articulation starts with grammar and spelling. It proceeds to sentence, paragraph and document structure.

I often use a tool called hemingwayapp.com to help me ensure my writing is up to standard. And, of course, if used correctly, ChatGPT and the like can be a great aid to clear articulation. If you've not yet tried it, I suggest you give it a go.

Of course, there are other tools you can use. And I am sure they're just as good. If you have a favourite, why not share it with the rest of us in the comments?

It's not just about words and sentences. You can also use charts, tables and graphics. And its just as important that these are clear and well constructed.

"If you can't explain it to a six year old, you don't understand it yourself."

- Albert Einstein

Telling a story

People have been telling each other stories since the discovery of fire. It's baked into the way we communicate. It's part of how we make sense of the world.

You strategy should tell a story. It should have a beginning, middle and end. It should lead your audience on a journey from where you are now to where you want to be.

It should engage them on a personal level. It should tap into their fears and aspirations. Articulation should take the logic of your strategy and connect it to the emotions of your audience.

People are sense-making beings. We're programmed to make sense of the world. And we do it with stories. So if the story of your strategy doesn't make sense or contains gaps, people will simply fill in the blanks. They will make up the story in a way that makes sense to them. It won't always be what was intended. But it will become their understanding of the strategy.

Leaving everything else out

Why does James Bond never eat, sleep or brush his teeth? Of course, he does. But that gets left out of the film. It's not relevant. And it would bore the audience instead of engaging them.

Is your strategy packed with irrelevant detail? It may make you look clever. But is it detracting from your strategy?

Or have you refined it down to its essence? Just enough to tell the story and achieve the effect you're after. And no more.

At the end of many assignments I end up with a deck or document I call "the cutting room floor". It contains all the analysis and ideas that, whilst valid, didn't make it into the final strategy. They're not wrong, or bad. They may even have been important at during the process of developing the strategy. They're just not essential to the current articulation.

Being consistent

You've probably invested a lot of time and effort in coming up with your strategy.

So don't expect your audience to fully understand what you're saying in the first telling. They also need time to get to grips with it.

That takes repetition over time. And repetition requires consistency.

At school we may have been taught to vary what we say so that we don't bore our audience. We're taught to use similes and synonyms and flowery language. To mix things up.

But in business we need to be more concise and consistent.

I you say the same thing in two different ways, your audience will spend all their time trying to understand if you mean the same thing. Sometimes, they'll get it wrong and think the meaning is different when that wasn't intended. Either way it is distracting their attention away from your core message.

I know many people who think function is more important than form. That if your strategy is sound, it shouldn't matter how you articulate it. But the truth is, it does. So you might was well get good at articulating strategy.

Strategy communication is as important as strategy development and execution. And it should get as much attention.

Introducing the Enhanced Business Model Canvas

The Enhanced Business Model Canvas combines the Business Model Canvas with the Operating Model Canvas.

The Operating Model Canvas was proposed by Andrew Campbell, Mikel Gutierrez and Mark Lancelott in their recent book by the same name. (See to the right). The Business Model Canvas was proposed by Alexander Osterwalder and Yves Pigneur in their book "Business Model Generation". I previously blogged about it here.

In suggesting this combination, Campbell, et al, argue that it provides a more operational perspective to the left-hand side of original Business Model Canvas. This directly addresses "important issues such as people, organization structure, location and information systems that are critical to the operating model, but often given too little attention when thinking about the business model."

Here is an example of what an Enhanced Business Model canvas for Uber might look like.

(Please note: I have constructed this canvas by way of example only. I used publicly available information without any privileged knowledge of Uber. As such, I cannot vouch for its accuracy. If you do disagree with anything in this example, this will only serve to demonstrate the usefulness of the tool in fostering understanding.)

I drew the example above in StratNavApp.com. StratNavApp.com is the collaborative online tool for business strategy development and execution.

The Enhanced Business Model Canvas provides more context and granularity than the original Business Model Canvas does. For starters, it considers 11 elements of the business model, compared to the original 9. And some elements have been altered. The changes are:

Locations and Organisation have been added. These are both welcome additions.

Location: Michael Porter's work on the strategic importance of location should be enough to convince you. If not, just think of the importance of, for example, Silicon Valley to the tech sector.
Organisation: Please see my previous blog about why Structure follows Strategy.

Key Partners and Resources have been removed. I would argue that they have, in fact, been replaced with Suppliers and Information respectively. In both cases, the new category appears to be slightly narrower than the original.

In the case of suppliers, the greater specificity is probably a good thing. Distributors, for example, may be a Key Partner, but they fit more logically on the right side of the model, which focuses on customers, under Channels.
The addition of Information is very welcome in today's data-intensive, big data-driven world. Some other Resources, such as a preferential Location, now have a home of their own. Others, such as patents or exclusive contracts may struggle to find a home in the enhanced model.

Key Activities have been renamed as Processes. They are also placed within a horizontal chevron shape, instead of the non-descript blocks in which the other elements reside. I am neutral regarding the name change. Arguably, the shape and orientation of the category make absolutely no difference to the analytical process. However, I can't help but feel that the change highlights the active nature of the Key Processes. It also serves to make the model more distinctive.

Only time will tell whether the Enhanced Business Model Canvas will achieve the popularity of the original. For now, StratNavApp.com offers the ability to use either. Undoubtedly, it does add something to the debate on how best to understand, represent and analyse operating and business models. And I'd certainly be interested to hear your thoughts in the comments below.

Strategic Learning: A practical guide to strategy development and execution

Regular readers of this blog will know just what a complex and multifaceted subject business strategy can be. For those without the time to study the subject in all its guises, actually getting on with the job of developing and executing business strategy can be a daunting task.

That is why I wrote my first eBook:

Strategic Learning: A practical guide to strategy development and execution

In it, I distil what I believe are the absolutely essential steps and considerations for developing and executing a business strategy which creates real value, rather that one that sits on the shelf collecting dust.

You can download your free copy now.

I'd love to know what you think. Please feel free to leave your feedback in the comments below.

How (and why) to fit your Strategy On A Page

Your strategy should clearly communicate direction and priorities. Whilst it may take a lot of detailed analysis and discipline to develop and execute a strategy, once it is done it is important to be able to clearly articulate it in a way that people who've not been involved in the detail can easily understand.

The strategy-on-a-page (SOAP) is a good technique for communicating a strategy more widely. By sticking to the one-page discipline, it forces the architects of the strategy to really boil it down to its essentials.

Of course, it must still include all the basic ingredients:

Underlying insights / rationale
Purpose (vision / mission) and values
Themes / priorities (often referred to as the 'pillars' of a strategy)
Initiatives, including some explanation of time and sequence
Outcome measures and targets

Here is a template I've used to good effect before.

Here are some tips for completing your own SOAP:

Summarising the analysis underpinning your strategy into a small number of pithy facts about the current situation will help to ground it in a world your audience already understands. Between 4 and 6 statements should provide sufficient clarity without losing focus.
You probably don't need a vision and a mission on your SOAP. Either will do. Just pick the one most likely to capture galvanise people into action.
Whilst brand values describe how you want customers and partners to experience your business, staff values describe how you want your team to behave towards each other and customers. You may feel these should be the same and only one set of values is enough. If you do have two, make sure they are clearly aligned.
The strategy ambitions describe at the highest level what you want the strategy to achieve, and provide an organising framework for the detail so that it is clear how the individual parts go together to make for a greater whole. Again, between 4 and 6 should provide sufficient narrative whilst retaining focus.
Organising the initiatives into "First...", "...then...", and "...and finally" allows you to express the detail of your delivery plan in story-like language without getting overly hung up in the detail. This detail must still be tightly managed, but not on your SOAP. I often see these initiatives chunked up into large programmes. That is fine as a management technique, but it does make the strategy delivery harder for people to relate to. Resist the temptation to fall back on patterns like "First analysis, then design, and finally delivery", as this adds no narrative value. Focus instead on phasing and sequencing of delivered changes.
Select a small number, say 2 or 3, KPIs to represent each theme. Use visual icons to indicate, for example, whether you intend for the KPI to be increased, reduced or kept the same. Combine KPIs which represent the change in behaviour of the organisation (e.g. operational changes) with KPIs which show the result of such changes (e.g. growth and financial outcomes).
Update your SOAP periodically to reflect progress with the initiatives and KPIs, as part of a programme of celebrating small successes within the context of the overall plan.

A SOAP is a powerful tool when used as part of a larger strategy communication programme. It should never be your only communication, though! It can serve as a useful leave-behind. Hang copies around the office immediately after a town-hall or roadshow presentation on the new strategy as an ongoing reminder.

Contact me if you'd like this template in Powerpoint format, or need help developing your own SOAP.

Transparency versus democracy in decision making

One of the key lessons of the Brexit vote was that important decisions should not be made by direct democracy. On the one hand, the referendum showed that voters had lost confidence in 'the experts'; on the other hand, it showed that they were ill-equipped to make the decision themselves.

That is the very reason why most democracies are representative democracies and not direct democracies. (In a representative democracy, the people vote for 'experts' to represent them in making the important decisions. In a direct democracy, the people vote directly on the important decisions themselves. The challenge, in a representative democracy, of course, is for the representatives to retain the confidence of the electorate - which they clearly failed to do during the Brexit referendum!)

It is the same in organisations. Whilst much has been written about increasing employee participation in order to increase engagement, it remains management's responsibility and prerogative to make the important decisions.

Where does that leave employee engagement? A better way to increase employee engagement is through transparency. That is, by explaining to employees how and why important decisions are made, both before, during and after the fact.

Of course, this assumes that management is making high-quality decisions in an informed and reasoned basis in the first place. If this is not the case, then increasing transparency will just expose these flaws to employees, which will decrease engagement and confidence.

The models we typically use in strategy development and execution play two roles in this regard.

Firstly, by using the appropriate models well, decision makers are able to increase the quality of their decision making. The models help decision makers to develop richer pictures of the organisation and its competitive environment, to ensure that a wider range of alternatives is considered before making a decision, and to ensure that the alternatives are evaluated against all of the appropriate criteria before a final decision is reached.

Many leaders continue to make important decisions based on intuition. This is appropriate for less critical decisions: intuition is, after all, the sum of all of our experiences. However, research has shown the importance of visual cognitive artefacts (such as mind maps, SWOT analyses, and decision matrices) that extend the capacity of the brain to process information (see Stop jumping to solutions!). That is, clearly articulating your thinking on paper (or a screen) using models improves everyone's abilities.

Secondly, the models facilitate communicating those decisions to employees, and therefore promote transparency. Because the analysis has been both thorough and explicit, it is more easily revealed to employees. Employees in turn will see that management really has understood the issues and evaluated all of the alternatives and will be less likely to assume that decision makers are living in ivory towers, out of touch with what is really going on in the business, and pursuing their own hidden agendas for personal gain at the expense of the organisation as a whole.

For example, almost all options have both pros and cons. An important part of transparency is revealing both the cons of the alternative selected, and the pros of the alternatives not selected (rather than simply presenting the selected alternative as being unambiguously positive). By understanding the cons of the alternative selected, employees will be better able to recognise and minimise any downsides as they arise.

Of course, there will be some decisions where management cannot be transparent. This might occur, for example, where there is market sensitive information in a complex negotiation. However, if decision makers are transparent wherever they can be, employees will be more likely to accept where the decision makers explain that they cannot be.

The judicious use of models can significantly improve the quality of decision-making whilst also improving transparency and employee engagement. StratNavApp.com, the purpose-built online environment for collaborative strategy development and execution was developed with just that in mind. Why not give it a try now?

Post-script: I have used the terms 'management', 'employees', and 'decision-makers' rather loosely as if they are discreet groups of people. In truth, most organisations exhibit some form of hierarchy and specialisation with at least some devolution of decision-making. That is, the same individual may be 'management' and a 'decision-maker' with regard to some decisions, whilst simultaneously being an 'employee' with regards to others. Whilst this may make the flows of communication and transparency more complex, the principles outlined above will still apply.

photo credit: EU referendum ballot paper via photopin (license)

Understanding 4 different types of growth with Ansoff's Matrix

Most businesses are obsessed with growth. Growth is by no means the only strategic goal worth pursuing. But it is certainly one of the more common ones.

Growth has many benefits. It:

creates economies of scale,
creates employment,
generates shareholder returns,
bolsters executives' egos, and of course
means more customers getting more of the products and services they want.

A business which is growing, especially one which is growing relative to its competitors, is seen to be winning.

However, not all growth is always good. Growth can lead to bureaucracy, diminishing marginal returns, diseconomies of scale, and dispersion of focus.

Ansoff's Matrix

When looking at growth, H. Igor Ansoff showed with his now famous matrix in 1957, that there are at least 4 different types of growth.

Market Penetration: selling higher volumes of the same products and services into existing markets.
Product Development: developing new products or services to sell into existing markets.
Market Development: finding new markets to sell existing products or services to.
Diversification: selling new products or services to new markets. This is the most risky of the four on account of it having to deal with two unknowns at the same time.

There is more to these four growth strategies than meets the eye, so we will look at each of them in turn.

1. Market Penetration

For most businesses, market penetration is the default strategy. Of course, if the market itself is growing, then, all other things being equal, the business will grow along with it. They say that "all ships rise with the tide".

Normally, however, market penetration would seek growth relative to the market. There are a number of ways to achieve this:

Volume-selling: selling larger quantities of the same product to existing customers. You can do this by increasing distribution and/or offering volume discounts.
Up-selling: selling higher-value products to existing customers. For example, a more expensive model.
Cross-selling: selling additional products to existing customers. These could be add-ons or complementary products.
Competition: convincing customers who would otherwise have bought from your competitors to buy from you instead.
New customer development: finding customers within the market who are not already using the product or service at all, and convincing them to start.

You can achieve market penetration by tweaking the marketing mix. That is, by reducing price, increasing promotion and/or distribution, tweaking product features or packaging, etc.

You can also achieve market penetration by acquiring a competitor.

2. Market Development

Market penetration can involve developing new markets in a number of ways:

Entering a new geographic region. This could be a new region or country.
Targeting a new customer segment. For example, the youth market, or small-to-medium enterprises. Success in this strategy depends on how insightful and nuanced your customer segmentation is in the first place.
Developing new distribution channels. For example, expanding from wholesale into retail distribution, or targeting a different type of distributor.
Expanding from the consumer to the corporate or public sectors, or vice versa.

The exact means of entering those markets will depend on numerous factors. These include different regulatory regimes, different socio-economic norms, and whether a competitor already exists in the market or not.

3. Product Development

Product development may take the form of:

New product development: Research and innovation in order to create something which the world has never seen before.
Product licensing: Acquire the rights to manufacture a product developed by someone else.
Product sourcing. Select products which already exist elsewhere (in other geographies, or through other distribution channels) and make them available to your customers. Amazon is a great example of this approach.

Which of these are most suitable depends on many different factors. Key of these is whether the business is fundamentally predicated on technical product or service development expertise and innovation (like Apple), on manufacturing expertise (like Capita), or on customer intimacy (like Amazon).

New products exist in a continuum from:

completely new and novel products, through products which are
reconfigurations of existing products, to products which are merely
incremental improvements to existing products.

The resulting products may be own-labelled, co-branded or white-labelled.

4. Diversification

Diversification is the most risky of the four strategies. This is because it involves all of the complexity and risk of Market Development and Product Development at the same time.

This is why businesses often pursue diversification through acquisition. That is, by acquiring a business or team which already has a track record of selling those products or services in those markets. Even then, the acquirer's ability to understand and oversee the acquired business may be a challenge.

Application

You can use Ansoff's Matrix can to understand strategies in hindsight. However, it is more powerful to use it to help businesses generate a complete list of strategic options for subsequent evaluation. See, for example, 6 techniques and 5 tips for developing strategic options.

As we have shown, Ansoff's Matrix provides not just the four options shown in the diagram, but also a range of variations within each of the four.

Using online business strategy development and execution tools to increase collaboration

The digital revolution is transforming almost every aspect of almost every business. As strategists, it is important to remain abreast of these trends in order to be able to advise our employers or clients appropriately.

But there is one aspect of the digital revolution we often overlook. And that is how digital can change the way we do strategy itself.

Most strategy processes still boil down to circulating large Powerpoint decks or Word documents by email. Just like we did 30 years ago.

Fortunately, that is now starting to change. StratNavApp.com is an online business strategy development and execution tool designed to:

ensure best practice,
improve consistency,
increase collaboration, and
leverage the power of AI in your strategy processes.

StratNavApp.com is arranged around a unique Strategy Board. This brings together the 4 core stages of the strategy development and execution cycle:

Analysis
Articulation
Planning
Control

Analysis

The Analysis module is all about understanding the current situation and anticipated future(s). This includes the organisation's

operating model: capabilities, strengths and weaknesses,
as well as its
operating environment: competition and industry forces and trends.

This understanding provides the WHY of your strategy.

StratNavApp provides a number of tools for doing this, such as:

The Business Model Canvas. Summarise exactly how the business works (Learn more.)
Porter's Value Chain analysis. Understanding how the organisation uses its operating model to create value. (Learn more.)
McKinsey 7S analysis. Understand the internal factors which lead to success. (Learn more.)
PESTEL analysis. Understand the Political, Economic, Socio-economic, Technological, Environmental and Legal trends. (Learn more.)
Porter's 5 Forces analysis. Understanding the forces that shape competition in your industry. (Learn more.)
Strategy Canvas. Compare and contrast how different competitors win customers. Differentiate your the organisation from the rest of the market. (Learn more.)
BCG Matrix. Understand how different products and services in a portfolio contribute value. (Learn more.)
SWOT analysis. Summarise the organisation's Strengths, Weaknesses, Opportunities and Threats. (Learn more.)
Scenario Analysis. Deal with uncertainty. (Learn more.)

The different models are all integrated behind the scenes where this makes sense. For example, the insights generated in the other tools will automatically show up in your SWOT analysis. You can also attach them to processes in the Value Chain analysis, etc.

Articulation

The Articulation module is where you express WHAT your strategy is. StratNavApp.com allows you to articulate your

Vision,
Mission and
Values.

You can also set your strategic

Goals,
Objectives,
Key Performance Indicators (KPIs),
Targets and Actual Results

using a Balanced Scorecard framework.

The Scorecard provides a useful summary of your Goals, Objectives KPIs and Targets. (The scorecard is in the Control quadrant.) It also helps you identify any gaps in your strategy.

The Strategy House provides a handy summary of your strategy. This is particularly useful for communication.

Planning

The Planning module allows you to map out exactly HOW you plan to deliver your strategy.

Initiatives move through various stages, such as proposal, approval, delivery and completion.

You can also organise your Initiatives in:

a timeline or Gantt view.
a Three Horizons view, helping to ensure you strike the right balance between short, medium and long-term activities.

You can link Initiatives back to the Goals they support. And you can capture Cost and Benefit details.

The Goal/Initiative Matrix allows you to map your Initiatives to your Goals. It highlights

any Initiatives which don't explicitly support your Goals, or
any Goals which don't have any initiatives supporting them.

The Initiative RASCI helps you to ensure that the right people are involved in the right initiatives in the right roles.

The Initiative/Scenario Matrix helps you test the robustness of your initiatives against the uncertainties you identified in the Analysis phase.

Control

The Control module runs across the other modules. It provides tools to assist in the development and execution of your strategy. To make sure it actually gets done!

A RAID log allows you to record Risks, Actions, Issues and Decisions. You can also link these to your to the appropriate items within the other three modules. (Learn more.)

You can also record Stakeholders. These are either Individuals, Organisations or Generic Groups. Using a RASCI framework, you can map them as being either Responsible, Supporting, Accountable, Consulted or Informed for Goals, Initiatives or Actions.

The Meeting Manager allows you to plan and record all of your meetings. You can record which Stakeholders participated in which meetings. You can also record Agendas, Minutes, Actions and Decisions. The Actions and Decisions are automatically included in the RAID log. You can also then link them back to the relevant Insights, Goals and Initiatives, etc.

Lastly, the Scorecard provides a graphical summary of all of your KPI's Target and Actual Results. This allows you to easily track if your strategy is delivering. You can also feed this back into the ongoing Analysis and refinement of your strategy.

Collaboration

Collaboration is baked into StratNavApp at every step along the way.

To invite someone into your strategy project, simply enter their email address. StratNavApp will then email them with appropriate instructions which will then link them to your project. Only people you invite can see your strategy projects.

All changes are recorded, using a familiar legal red-lining approach where applicable. They also timestamped together with the author who made them. So you'll always know who did what and when. There is also a handy notes feature allowing teammates to annotate and comment on any element of your strategy. This ensures that all collaboration around your strategy remains attached to the strategy content to which it relates. No more trawling through email archives and old versions of documents to remember who said what when!

Once a day, StratNavApp will email you a summary of all the changes and notes your teammates have made, ensuring you're always up to date and engaged in the conversation.

Reporting, Search, File Archive & Multi-device

The Reporting module enables you to extract a snapshot strategic plan at any stage in your journey. Because it is a dynamic snapshot at a point in time, your strategic plan truly becomes a "living document", not an annual report which just sits on the shelf until next year.

You can also export your strategy plan into Strategy Markup Language (StratML). StratML is the ISO Standard XML Schema for Strategy and Performance Plans and Reports.

Your projects are also fully searchable, and available from any device connected to the internet, be it a PC, laptop, tablet or smartphone.

And you can upload files/documents and attach them to your analysis and initiatives. So the industry report you needed is always right there when you need it. And the business case spreadsheet is always attached to the initiative.

Give it a go, NOW

StratNavApp is free to use for up to three projects. If you want to do more than three projects, there is a subscription version available for a small monthly fee. Enterprise licenses are also available.

Why not click here to give it a go, now?

Five things running taught me about business strategy

I love running. There is something elegantly simple about it. You can do it almost anywhere and with very little equipment. And it's something that we, as humans, have evolved to do over hundreds of thousands of years.

But what does running have to do with strategy? At least five things, I think.

1. Thinking about running

Despite its elegant simplicity (left foot, right foot, repeat...) there is an almost infinite variety of different ways in which people approach running.

One only has to look at the number of books written on the subject to see this.

Training for and running a 5km race is very different from training for and running a 100-mile race. Road races are different from trail races (as well as all manner of 'adventure' races).

And there is:

running form,
cadence,
a seemingly infinite variety of different types of training runs,
cross-training,
hydration,
nutrition (both in general and while running),
warm-up and recovery,
dealing with injuries,
mental preparation,
race tactics,
a huge variety of different types of shoes,
specialist clothing for all conditions,

etc., to consider.

And so most runners know that to progress beyond a certain level you need to approach running strategically. Just like in business, progressing as a runner requires that you:

Study and understand what makes a great runner - see running form, cadence, etc. listed above.
Understand your own strengths and weaknesses, both physically and mentally.
Have clear goals of what kind of runner you want to be. What distances you want to run and on what type of terrain. How competitive versus social you want to be. Focus is essential.
Understand your circumstances relative to those goals. This includes other time commitments, access to the type of terrain you want to run and other such resources.
Develop a clear plan of how you intend to achieve your goals, taking your strengths, weaknesses and circumstances into account.
Execute that plan with discipline and diligence. Even when it's cold and wet out. Adapting around all the other distractions of life that inevitably intervene from time to time.
Track your progress and adjust your plans as you go. Nothing ever goes exactly to plan.

I started running relatively late in life. At the time, I could barely run 2km without collapsing in a puffing and panting heap. All I wanted to do was get a little fit. However, as I gained a basic level of fitness, I started to think about running more strategically (as I eventually do with most things in life!) Eventually, a few short years later, I ended up running a 50-mile trail ultra-marathon.

When I started running, I knew nothing about ultra-marathons. I certainly would never have imagined I could ever actually run one. Running has taught me that:

With thought and insight, planning and preparation, and discipline in execution, people and businesses can achieve almost unbelievable things. (Tweet this!)

2. Thinking while running

Running, particularly longer distances, gives you lots of time to think. There is something meditative in the simple and repetitive motion of running. It clears your head. Some runners like to use headphones and music to pass the time while running. But I usually avoid this, preferring just to be present in the activity.

I've done some of my best thinking while running. Being unable to take notes or start acting on my thoughts immediately, leaves me free to think more deeply than I otherwise might. And, of course, after a run, I come back to the world with a clearer head. I am more ready than before to tackle whatever the day demands.

Sometimes you can get so close to a seemingly intractable strategic problem that you can no longer see the forest for the trees. (Tweet this!)

When that happens, it is useful to have a way to step back from the problem. To change your mode of thinking. To give yourself enough space to see things differently. Sometimes, the simple act of going for a walk around the block is enough. Other times you need something more. And with most things in life, practice makes perfect.

3. Learning to dig deep

No strategy is ever plain sailing. As Machiavelli said, "It must be considered that there is nothing more difficult to carry out nor more doubtful of success nor more dangerous to handle than to initiate a new order of things." Executing strategy takes hard work and often long hours. The circumstances are often emotionally charged. Let's face it - it can be draining at times.

Long distances running teaches you to remain focused up to and beyond the point of total exhaustion.

Physical and mental fitness are a key determinant of success in business as much as they are in running. (Tweet this!)

4. Being flexible

Let's face it: things don't always go according to plan. No matter how well you prepare, things still go wrong on a run. Anything from bad weather, to a dodgy prawn the night before, to blisters, chafing or other injuries, to getting lost on the trail, can threaten your run.

With experience and foresight, you can anticipate and avoid many issues. You can carry a waterproof jacket and mobile phone case. You can eat only tried and tested safe meals leading up to a race. You can wear twin-skin socks. You can carry a map and compass, etc. Other times, you have no choice but to bail out of a run early. This can be heartbreaking if its a race you've spent months preparing for!

Training, also, may not go according to plan. Work and family commitments, illness, etc. can call get in the way.

The key, in running as in business, is preparation, anticipation AND flexibility. Bake those into your plans. Don't treat them as an afterthought AFTER things don't go according to plan.

Bake preparation, anticipation and flexibility into your plans, not AFTER things don't go according to plan. (Tweet this!)

5. Remembering to have fun

There is a certain physical pleasure you get from pushing your body beyond its limits. There is also the satisfaction you get from achieving things you couldn't do before. And there is joy in just being outside and on the trails. You get the best views, I believe, by running to the top of the hill. I've seen some spectacular sights when out running. I've observed the changing seasons in the forest more keenly than I otherwise would have.

They say it's important to stop and smell the flowers from time to time. Running affords me a unique opportunity to do so.

Of course, there have been early morning training runs, when it's cold, dark and wet outside. Times when I've had to remind myself that I enjoy running. But at the end of the day, I know I'd never have kept it up if I didn't enjoy it as an activity in itself and because of the sense of achievement I've gotten from it.

And I think it is the same with business strategy also. As noted above, it can be physically and mentally draining. If you don't enjoy the process, and if you aren't intrinsically motivated by what you're trying to achieve, it will be hard, if not impossible, to keep performing at your best.

Indeed, one might question whether struggle without enjoyment makes any sense at all. (Tweet this!)

So whatever business you're in, and whatever strategy you're pursuing, make sure it is something that brings you some joy. And in the difficult times - for they will come - make an effort to keep some fun in the process.

I am no running coach, but I am a strategy consultant. For a confidential conversation about how I could help your business, please contact me.

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How to build executive alignment around strategic change

If you're struggling to get your strategic initiatives out of the starting blocks, it may be because your executive decision makers are not aligned around the strategic imperative(s) for change. If they're not conscious of what the real problem is, their underlying discomfort may cause them to pick holes in your strategic initiatives' business cases and plans instead. You'll know that this is happening when no amount of addressing their concerns by further research or additional planning satisfies their concerns about your initiatives - they just keep picking on new perceived problems.

When that happens, it is time to take a step back and:

Highlight the similarities and explore the differences in their understandings of the strategic imperative(s) for change.
Evaluate, prioritise and/or otherwise adjust the strategic initiatives on the basis of the understanding achieved in step 1.

Step 1

You can identify the similarities and differences in understanding of the strategic imperative(s) using a simple matrix. You can do this conceptually, or by actually drawing a matrix that looks like this:

	Stakeholder 1	Stakeholder 2	Stakeholder 3	Stakeholder 4	etc.
Strategic imperative 1
Strategic imperative 2
Strategic imperative 3
etc.

You can do this exercise by interviewing all of your executive stakeholders individually, or by getting them all together and doing it as a workshop, depending on the team culture and how well it works together. It is important to try to put real colour to your strategic imperative(s) avoiding generic but unhelpful imperatives like "growth" or "cost-cutting" and getting into details such as "what kind of growth?", "how?", "where?" and especially "why?".

Once you've identified the differences in understanding of the strategic imperative(s) for change you can start to explore them. Some differences are knowable. That is, they are differences of 'fact', and once the true facts are established the differences of opinion go away (assuming it is done in a way which build consensus, rather than in a way which just 'scores points'). Knowable differences usually lead to further research to establish the facts.

Other differences are unknowable. These are typically opinions about things that have not yet happened and can't be accurately predicted. Where you encounter these, it is useful to construct scenarios which increase the level of understanding of what the possible outcomes might be, to build strategies which are robust across multiple outcomes, and to put systems in place to monitor or even influence the situation as it unfolds.

Step 2

Once you've achieved some measure of alignment, you can re-evaluate, prioritise and otherwise adjust your strategic initiatives. Again, a simple matrix may help, such as the one outlined below:

	Initiative 1	Initiative 2	Initiative 3	Initiative 4	Initiative n
Strategic imperative 1
Strategic imperative 2 Scenario a Scenario b
Strategic imperative 3
Strategic imperative ...
Financial attractiveness
(Organisational) ability to execute
Overall ranking

Note that in addition to the strategic imperatives and scenarios, you'd still also evaluate the initiatives against their financial attractiveness and the organisations ability to deliver them.

A simple High / Medium / Low ranking is probably enough for this purpose.

At this point if you've not yet achieved some measure of consensus around your strategic initiatives, you will have a pretty good idea of why not. At that juncture, you can turn the conversation around: if your stakeholders don't believe your initiatives will address the strategic imperative(s), then what kind of initiatives do they believe will? This turns the conversation for a negative criticism into a positive co-creation exercise.

What have been your experiences of building consensus around strategic initiatives? I'd love to hear about them in the comments below.

The 4 Worst Kinds of Strategies

I encounter many strategies in my day to day work. Some of them are brilliant, of course. Others, less so. The worst of them tend to fall into four categories:

1. Waiting for the environment to improve.

It is easy to blame environmental factors for your lack of success. And it is a short jump from there to concluding that if you just wait for the environment to improve then everything will be OK. But the truth is, the environment (regulations, economy, etc.) are more likely to continue to become more complicated and difficult than they are to suddenly get better.

Your strategy should be robust across a range of environmental conditions. Preferably, your strategy should even shape environment conditions. But your strategy should not be to wait passively. Strategy is an active process. And even if the environment does improve, all ships rise with a rising tide. So your competitors are likely to benefit just as much as you are. Even more so if they have adopted a more proactive strategy.

See also:

How to do a PESTEL analysis to learn how to understand your environment.
Scenario Planning for Business Strategy to learn how to plan in the face of uncertainty.

2. Hoping your competitors will falter.

Every business should be in tune with its competitors' strengths and weaknesses. And ready to exploit any weaknesses it finds. But simply waiting for your competitors to make a mistake is too passive. As noted above, strategy needs to be an active process, not a passive process.

Hoping your competitors will falter lays yourself open to three risks.

What if they don't falter? What if they actually have competent staff who are able to respond to the challenges you thought you had spotted but they would miss.
Your competitors are not sitting idly by. They are hungrily eyeing your lunch. While you are waiting to see if any crumbs fall from their table, they may be planning a direct assault on your business.
How do you know you're not going to make a mistake before they do? Can you be that convinced of your superior insight and ability to execute? If you genuinely had that superior insight, how come your competitors are still in business?

No, you can't sit by and wait for someone else to make a mistake. You must go out there and grab the market share and competitive position you can for yourself.

See also:

3. Listening to your customers.

Don't get me wrong:- listening to your customers is essential. Every business should do it. And you should take what you learn from your customers into account when formulating your strategy. But listening to your customers is not a strategy in itself. Customers want to be led. They are drawn to businesses with products and services that solve their problems and exceed their expectations. They are looking for solutions and answers, not problems and questions.

Yes, customers may be willing to participate in crowd-sourcing from time to time. But they don't want to be your R&D department. They are looking for someone else - you - to apply the creativity and engineering. Oftentimes, customers don't even know what they want until they see it. If your strategy is simply to listen to your customers and respond to them, you will always be behind their expectations. And sooner or later, some competitor will come out with the product or service that your customers never knew they wanted. And that is where they will go.

See also:

Everybody Lies: The evolution of market research

4. Strategy based on hubris

Some strategies are based on a strongly held but ultimately mistaken view of an organisations strengths and capabilities. It is good to proud of the organisation you work for. But, as they say, pride comes before a fall. And pride without evidence makes this all the more likely.

Any time you see a strategy which claims a a strength without substantiating it should be a warning sign.

Examples I've seen include:

claiming to have a market leading brand without any tangible evidence of brand recognition or attribution either in absolute terms or relative to the competition.
claiming "it's all about our people" without providing any evidence of what those people are able to deliver or how it creates value for customers compared to the competition.

In fact, any time you come across someone who just knows they are the best but can't explain or evidence why, you're on shaky strategic ground. And even if that belief turns out to be true, that lack of understanding will make it difficult to build a meaningful strategy around it.

Richard Rumelt wrote:

"Bad strategy flourishes because it floats above analysis, logic, and choice, held aloft by the hot hope that one can avoid dealing with these tricky fundamentals and the difficulties of mastering them."

- Richard Rumelt, author of Good Strategy / Bad Strategy

Does your strategy suffer from any of these shortcomings? Perhaps it's time you called for some independent assistance.

Strategic Vision: Three tests

Strategic Vision is one of the most elusive facets of corporate strategy. Most organisations have a Vision Statement, but sadly few in my experience have a Vision.

Evaluating Vision Statements: 1. The Sniff Test

These days, most organisations' vision statements are quite easy to discover as they are proudly displayed on their web sites or in their annual accounts. However, I have cautioned before in Strategy as Public Relations against assuming that the published strategies, vision statements, etc. of organisations are anything more than deliberate signals to the market or even to employees. And so I would always advise checking to see what a firms' board's real vision is before jumping to conclusions. This may require a more subtle line of inquiry.

The worst example of a stated vision statement I have ever encountered was an organisation whose strategic plan opened with an intent to be: "first for customers, first for employees, and first for shareholders."

I usually apply two tests to vision statements before I even begin to try to understand whether they are strategically valuable. These are:

Could you identify the business, or even the industry? Read the example above again. I defy you to guess even the industry.
Could you say it was not that, and still sound credible? For example, could you credibly say "Our aim is not to be first for customer, first for employees and first for shareholders, but instead it is..."?

Only once a vision has passed those two tests do I start to consider whether the vision is likely to lead to value creation given its internal capabilities and market positioning.

Evaluating Vision Statements: 2. The Discriminatory Test

The role of a vision statement is to paint a vivid picture of what success will look like. It should be succinct and memorable. It can be a statement, in the conventional sense, but it could equally well be a story, a checklist or any other suitable form of communication. Most importantly, it should be something against which a decision maker can weigh two otherwise equally potentially profitable options, and conclude which one will best take the organisation towards achieving its vision. If two honest and intelligent decision makers can reach conflicting conclusions under such a circumstance (and I have encountered this on more than one occasion), then the vision statement has failed to achieve its purpose.

Evaluating Vision Statements: 3. The Value Test

The final criteria for a vision statement is whether it is likely to create sustainable value.

It should be stretching but achievable. Just like a desert mirage -always just within sight but just out of reach. If it is too easy to reach, it will not force decision makers to exercise themselves enough. If it is too hard to reach decision maker will start to insert their own, potentially divergent, interim milestones. These will ultimately take the organisations' focus away from its goals. (Visions differ from objectives in that ones hopes to put a "tick in the box" for objectives, whilst a vision moves forward just ahead of the organisation's ability to achieve it.)
It should capitalise on the organisations particular relative (to its competitors) strengths, and work around its weaknesses. It should fit the particular organisation, in its current state, like a glove. In that way it should never be true that the vision would be better suited to one of the organisation's competitors.
It should be appropriate to how the market will be when the vision is realised. Markets don't stand still. The best visions, when realised, transform the market. But even aside from that, markets continue to change and develop while the organisation executes its strategy. The vision should be value maximising in the market as it will be in the future, rather than as it is now.

A strategic vision should lie at the heart of every successful strategy - it is the purpose of the strategy. Coming up with the right vision is perhaps the most difficult part of The Strategic Learning Cycle as more than any other stage of the process it relies more on artistry than on technical skill.

What are your favourite examples of either good or bad vision statements?

Other resources:

The key to vision statements that work

The Strategic Learning Cycle

One of the many reasons why strategies fail is that strategic planning is separated from the rest of the function of the organisation. (See 6 reasons why strategies fail in implementation for more insight.) A handful of executives retreat from the organisation to draft a plan. This spends the year safely on their shelves until they repeat the process a year later.

The Strategic Learning Cycle embeds strategic planning in the executive process. This ensures that it has an ongoing impact on all decisions at all levels within the organisation.

The Strategic Learning Cycle is comprised of 4 processes:

STAGE 1: Analyse the business and its environment.

Assess the market. Assess the capabilities of the organisation and its competitors. Assess the needs of the organisation's current and target customers. Analyse the trends that could change these.

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STAGE 2: Articulate a strategic vision, objectives and values.

Develop and evaluate options, and make decisions to define the business's response to its environment.

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STAGE 3: Craft and execute a plan of action.

The plan must require the actors in the business to do (or not do) something other than what they would otherwise have done.

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STAGE 4: Measure success against the vision and objectives.

It's important to measure against the vision, objectives and values, rather than just against the plan. You want to measure results, not just effort.

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Feedback loops

We draw the Strategic Learning Cycle as a circle with two feedback loops. The first feedback loop recognises that the execution of the strategy changes the organisation and its environment. In this case, you may have to reconsider the whole strategy. The second smaller feedback loop recognises that the execution of the strategy may not go according to plan. In this case, you may have to adjust the execution plan.

The speed at which you should iterate around the Strategic Learning Cycle depends:

On the rate of change in your industry,
The strength of your current position in the market.

In a very strategically mature organisation, you can even operate all 4 steps of the Strategic Learning Cycle simultaneously and on a continual basis. This will free you from the perils of the annual planning cycle.

Resourcing your process

Each stage in the Strategic Learning Cycle requires different skills. For example:

Analysis: research and data skills.
Articulation: ideation and vision skills.
Planning: project and programme management skills.
Measuring: management accounting and audit skills.

In a small organisation, you may need to rely on one individual who is able to balance all of those skills. In a mid-sized organisation, you may be able to hire different individuals with appropriate skills for each stage. In a larger organisation, you may need to co-ordinate multiple people spread amongst different departments to manage all 4 stages.

How and where to use it

The Strategic Learning Cycle can be used by any Strategic Business Unit. However, with minor adaptations, you can apply it recursively through lower-level departments, even down to individual people.

You can develop and execute your own strategies using the innovative and free online StratNavApp.com. Go ahead and give it a try?

References

The Strategic Learning Cycle was partly inspired by Kolb's Learning Styles and Experiential Learning Cycle

See also:

What is Strategic Planning?

5 templates for innovation

How does innovation happen?

Is it a spark of magical genius that some people have, some people occasionally have and others never seem to have?

Is it a natural consequence of really listening to and understanding your customers' needs (perhaps sharing them yourself)? (But you can't always rely on your customers to even know what they want, much less provide you with innovative ideas. Customer's ideas tend to lead to small changes to products and services which often fail to have significant impacts on the market.)

Is it a function of simply trying as many things as you can and hoping that some of them stick? (Most businesses cannot afford the 20% of their time that Google allows its employees to experiment with new ideas.)

Or is it just luck?

A study of innovation reveals that it tends to conform to several patterns. By studying and understanding these patterns, it may be possible to deliver innovation on a more consistent and predictable basis and to harness the creative capabilities of employees, suppliers, distributors, partners and customers.

1. Subtraction or Reduction:

Removing one or more elements from the product or process. The natural tendency is to want to increase the features of a product or service. However, this can lead to feature bloat, a product which is confusing to the end consumer and spiralling costs. The element removed may be:

undesirable, such as the alcohol in beer or the caffeine in coffee, or
revolutionary, such as the speakers in a Sony Walkman, or
replaced by something already in the environment, such as removing the legs from a baby's chair and clipping it directly to the table, or
simply result in a more affordable product, such as the removal of travel agents, tickets, free food and drink, seat reservations and customer care from Ryanair.

2. Multiplication

Adding one or more copies of an element or attribute of the product or service. For example,

adding additional blades and changing the angle of the blades in the Gilette razor, or
adding an additional tray to a CD player to produce an automated CD changer.

3. Division

Divide the product or process into one or more separately usable, often modular, components. This is common with electronic goods. For example,

the separation of turntables, speakers and amplifiers into separate components. This modularisation of home entertainment units has meant that new devices, such as MP3 players are more easily integrated into existing equipment.

4. Task Unification

Assigning new tasks to existing elements of a product, often combining the function of one element into another. For example,

getting the defrosting wires in a windshield to act as the radio antenna, or
using an iPhone to control other household devices.

5. Attribution Dependency Change

Creating or removing dependencies between the product/process and its environment. For example,

splitting unisex razors into masculine and feminine razors.

Taking an existing product or service and applying the above patterns systematically will undoubtedly lead to many spurious ideas, but may also yield valuable innovations. Sometimes, it may take even more imagination to conceive of uses for the result - it may not have been immediately obvious that a handheld, speaker-less non-recording tape player would find a market with walkers and joggers in the form of the Sony Walkman. But because these innovations flow from the product itself, they are likely to be aligned with the firms' existing skills, production capabilities and client bases. Thus the process of idea generation and execution are more likely to align.

Resources:

Magnolia strategy

In the UK, conventional wisdom suggests that, if you want to sell your home, you should paint it magnolia. Magnolia is a warm off-white which is considered to be neutral and inoffensive, and therefore broadens the audience to which your property might appeal.

And therein lies its weakness. Magnolia is the lowest common denominator. Specifically designed to offend the fewest number of people. The common-or-garden variety colour. But by the same token, unlikely to "wow" anyone either.

It strikes me that many business strategies are written in magnolia ink. A compromise hammered out in a boardroom, between people who, even if they have strong views individually, are unable to agree on anything remarkable collectively. Where it seems safer to follow the herd that to stand out.

Good strategies stand out for being boldly differentiated, not for fading into the background. Good strategies divide opinion: those who buy into it support it with passion and commitment, whilst the detractors declare that it will never work (and subsequently eat their words). Good strategies create value by adding something new and different to the world, be it a new product or a new process. Good strategies are written in bright colours with bold lines.