Whenever I facilitate a strategy development session, I begin with a question: "what is strategy?" In all my years doing that I got different answers, and some of the funniest ones are: "what I do is tactical, what my boss does is strategic (no further explanation)," and then "what I do is strategic, what my subordinates do is tactical." "Strategic means long-term." "When my boss tells me to do something because it is strategically important, it means there will be no revenue from it..."
Any of those sound familiar?
Many books were written on strategy development, and many consultants took the practice and offered their services based on the premise that strategy and the strategy development process are vague enough for them to be what they want them to be.
This couldn't be further from the truth. The process of strategy development is simple, really, and the following analogy will show how simple it is.
Think about how you use navigation in your car or your phone. There are six steps.
1. Locating Satellites.
The navigation system first needs to receive data from a number of satellites, calculate their position, and based on that--determine where you are.
The strategy development analogy: analyze your current situation. What do you like/dislike about your company, business, or market? What are your strengths, weaknesses, opportunities, and threats (SWOT analysis)? Use any methodology to establish a strong baseline of where you are now. Without it, there is no point in determining where you want to go.
2. Enter your destination.
You never ask the navigation app where you can go from here. You never ask "where will I be if I drove 10 miles?" because there is really no good answer to that. You are a lot more prescriptive with where you want to be, so you enter a destination address.
In their book, "Built to Last" Collins and Poras defined the termBHAG (Big, Hairy, Audacious Goal). Your goals can be BHAGs, or seemingly easy to achieve. That's up to you and how far you want to stretch the company in getting there. Your destination may be easy to reach. The best is to look at your destination as your "strategic intent" statement, as Hamel and Prahalad wrote in their seminal article. Just like you have to be clear with your navigation app, you have to be clear with your strategic goals, where exactly do you want to be?
3. Setting Boundaries.
Do you want to walk, drive, or take public transportation? Do you want the short route (great when your car is on a lease...), the fast route, the toll-free route, or the scenic route?
Similarly, what are the boundary terms of your strategy development? What is allowed, and what not? Should acquisitions be considered? What is the budget restrictions? Should the strategy be able to achieve additional things (such as talent acquisition, developing new skills) beyond reaching your destination? You must spell those out before you start plotting your route.
For a GPS system, this is the part you are actually not involved in. The system now takes where you are, where you want to be, and calculates a route that would that would meet the boundary conditions you have set.
Unlike GPS, in strategy development this role is yours. Using the right team, open and honest debate, with nothing off the table, you and your team will brainstorm how to get from where you are to where you want to be, while meeting the boundary conditions you have set. Missing any of the first three steps before calculating your path will make the path irrelevant, unachievable, or unmanageable. Going through the first three steps first will provide great clarity and guidance in developing the path. One organization I joined had a 47-page strategy document. When I asked someone to tell me what the strategy was, he was about to open the document. I stopped him: "without opening this document," I insisted. He couldn't. The strategy is something you should know if I woke you up in the middle of the night. It has to be simple. It has to be something that you don't need to open a 47-page document to know. I'm a big believer in developing strategy as simple rules. 3-4 rules will guide how you do things.
5. Follow directions.
What good is using the navigation system if you don't follow the directions it provides?
And similarly, what is the point in developing a strategy if you don't follow it? The importance of the first 3 steps to the development of the strategy, and developing strategy as a set of 3-4 simple rules means that you know it, and whenever you need to make a decision--it will guide you. Follow that guidance.
If your navigation system is based on cellular, live information, the fact that exit #47 of the highway is closed will already be factored in. In many cases, so will heavy traffic or other obstacles. However, if your navigation system is based on non-live data, you may find that you need to take a detour. And when you take that detour, the system will recalculate a new route from where you are now to your destination, while still following the boundary conditions. Typically accompanied with an obnoxious tone saying "recalculating!..." hoping to make you feel bad about the detour.
In business, there are unforeseen events. Mostly they are not a result of your doing, but rather changes in the market, new information you didn't have before, or changes in your company that would affect the implementation of your strategy. In many cases, you didn't (or couldn't) foresee those when you developed your strategy. However, just like the GPS system, you need to repeat step 4. It will make sense, though, just before repeating step 4, to reconfirm steps 1-3. What changed in where we are now? Is our destination still the same? Should any of the boundary conditions change?
Now, where do you want to go today?