An Iterative Approach

It is important to remember that answering the Question ‘Where do we want to go?’ will require an iterative approach. Initial ideas of the direction the business should go (for example “develop a new product line”) will often have to be modified as they are evaluated against the market needs and the organisation’s competencies and resources.

So, it is quite common for the strategy development to move back and forth between Question 2 (‘Where do we want to go?‘) and Question 3 (‘What are we going to do differently?‘) as different scenarios are evaluated.

Creating The Time And Space For Creativity

One of the problems in answering this question is that it can be a challenge for business leaders to lift up their head up from the day-to-day challenges of managing the business and create the time and head space to answer the big questions properly.

When developing strategy, it is almost always worth spending time off-site, with the other members of the strategy team. An experienced facilitator or strategy consultant can also help with creative thinking techniques and keep the discussions focussed on the strategic (rather than dropping back into day-to-day tactics). This also a great opportunity for people who are more instinctively entrepreneurial to help their colleagues to become more creative and innovative.

A great example of creativity in strategy development is Twitter, which was born from a big-picture brainstorming day at a podcast company, and now has 336 million users worldwide and a valuation of over $20 billion.

Tools and Discussion Topics to Help Answer Question 2

As with other aspects of strategy development, the exact topics to be covered will vary for each organization, and its state of development.

Some of the questions that are most often helpful include:

What is our Mission and Vision?

These are two of the most important questions to be answered in any strategy discussion. In essence, they should encapsulate:

• What are we trying to do? (the Mission)
• Where do we want to get to in the medium to long term? (the Vision)

The most powerful statements of Mission and Vision are those that are simple and resonate with the management and staff of the business. In an ideal world, every member of staff should aim to remember the Mission and Vision… that way, they can use them as frames of reference for the decisions they make on a day-to-day basis.

Sometimes it is hard for business leaders to get to the essence of their Mission or Purpose, in which case the process articulated by Simon Sinek is his book ‘Start With Why’ can be helpful. In essence, this involves a three-stage questioning process:

1. Why are doing what we’re doing?
2. How are we doing it?
3. What is it that we are doing?’

The process of digging into the ‘Why’ and the ‘How’ will inevitably throw new light on the ‘What’.

You will hopefully notice how the statements embrace NewTechNow’s strengths and opportunities whilst the Vision confronts some of its major challenges. All successful businesses need to think about how to convert weakness and threats into strengths and opportunities; and we will explore this further in Question 3.  ‘What are we going to do (differently)?’

Getting the Mission and Vision right can be time-consuming, which is one of the reasons why companies often accept second-rate statements… but it has been shown that the benefits can also be dramatic!

Looking forwards and outwards, where COULD we go in the future?

Looking forwards (into the future for trends, changes and opportunities) and outwards (outside your company, industry and country) gives you the opportunity to be disruptive and innovative with your ideas, perhaps leading you to courses of action you hadn’t previously considered.

One of the best ways of doing this is to go back to the SWOT and PEST analyses from Question 1, look for Opportunities and compare them to your Core Competences. This should generate a list of opportunities which the business could consider exploiting; these can then be analysed further to assess their commercial feasibility, etc.

How ambitious are we? How big do we want to grow?

This is a really important question – and one that, in our experience, is often not explicitly addressed. It’s important firstly because ambition, management efforts and financing are inextricably linked and also because there is a relationship between ambition and risk… be insufficiently ambitious and you may get overtaken by faster growing competitors, but push too hard and you risk overreach.

The challenge is to use the information gathered when answering the first question (especially data on the growth rate of competitors and the overall market) to assess the ‘right’ level of growth to target for the business. This is especially important when markets are changing rapidly because businesses can sometimes achieve a relatively high growth, whilst still losing market share.

Short Term versus Long Term Ambition

A common pitfall in strategy development to be too ambitious in the short term but insufficiently ambitious about the long term. In the excitement of developing a new vision for the future of the business it is very easy for leaders to convince themselves that they can change everything at once whilst continuing to handle all their day to day activities. This then leads to disappointment when strategic changes deadlines are missed and the whole process falls into disrepute.

At the other extreme organizations are often insufficiently ambitious in the longer term, forgetting that small changes made will often have a cumulative effect over time.

What organizations do we aspire to be like?

Asking the question “What brands or organizations inspire us?” can be a really powerful tool. And it’s often most effective if you pick two or three that are outside of your own direct industry, look at what you admire about them, what makes them successful and the work out how you apply this learning to your own business.

This is also a great opportunity to introduce the concept of best-practice benchmarking.  Often the best benchmarking exercises occur when an organisation benchmarks itself against an entity that is NOT a direct competitor, as it is easier to share sensitive information with a non-competitor, and you are more likely to get genuinely new ideas by looking outside your own industry vertical.

How Can We Evolve Our Value Proposition to Drive Growth?

Whilst product development is typically considered in-depth under Question 3 ‘What are we going to do (differently)?‘, it still has relevance here since the potential to evolve the product (or not) will have a significant effect on the Goals that can realistically be set.

The Value Proposition Canvas strategy tool is often a good place to start this discussion as it clarifies what value current customers get from the products and services. If the Value Proposition Canvas is then reworked for potential new types of customer, it can then be extended to clarify the extent to which the product or service is relevant to these new market segments.

In parallel with this, it’s also important to consider how the product or service could be enhanced and the Core Competence Analysis tool can be a useful way of establishing to what extent the organisation has the capability to do this, or whether the skills will need to be brought in from outside (with the likely increase in risk and potential for delays).

Other Tools

In all but the simplest of organizations, it is likely that further analysis will be needed to really understand ‘Where do we want to go?’.  Some of the tools that can be helpful are listed in: SKCI Recommended Strategy Tools and we will discuss the detailed application of more of these tools in other articles in this series.

Defining Goals – SMART versus FAST

Most managers will be familiar with the concept of goals being SMART (Specific, Measurable, Attainable, Relevant and Time-based). However, research published in the MIT Sloan Management Review has questioned whether this is optimal in today’s fast-moving environment (‘With Goals, FAST Beats SMART’).

FAST stands for ‘Frequently Discussed, Ambitious, Specific and Transparent’. The key differences between FAST and SMART are the introduction in FAST of transparency, or openness, as a key criteria in defining goals (so that each team can better understand what other teams are doing) and the change from Achievable to Ambitious.

Whilst most organizations will continue to set SMART goals, it is important to remember the significance of the ‘Ambitious’ criteria… especially as research indicates that employees pursuing ambitious goals significantly outperform colleagues with less challenging objectives.

Communicating This Information

The amount of information in the Mission, Vision, Values and Goals can make communication of the strategy difficult. Some organizations find that a more visual approach such as the House of Strategy tool can help with this.

Communication of the strategy will be discussed in more detail under Question 4. ‘How will we change?’ and Question 5. ‘How will we manage progress?’.

Next Steps

Answering the ‘Where do we want to go?’ question is a fundamental step in strategy development. As mentioned above, strategy is an iterative process and the answers to this question may need to be developed in parallel with the Question 3. ‘What are we going to do (differently)?’.

We hope this information supports you on your Strategy Development journey however, in the vast majority of cases, engaging an experienced Strategy Consultant, with a proven track record of business success, will help speed up your process as well as delivering excellent quality outcomes. Wherever you and your company are in your Strategy Development & Deployment process, SKCI can help.

Published Oct 8th 2019