Management Summary
In many companies, the traditional strategy process leads to excessive demands on the organisation. This results in both an increase in sick days and the incomplete implementation of strategic measures.
To prevent this from happening, I recommend changing the strategy process slightly. The change is not in the process steps but in the key questions that you ask in each process. Furthermore, the process is iterative. This means that the last three process steps are run through several times if necessary.
You will derive the following benefits from the changed strategy process:
- Together with their management team, they develop a strategy that can be realistically implemented without overburdening the organisation.
- The strategy is supported by middle management, as it was developed jointly.
- Conflicts between objectives and resources are eliminated by the process. This significantly increases the chance that the strategy will be implemented within the agreed schedule.
Which aspects are part of sustainable strategy development?
The starting point of the goal-setting and strategy process is a Modelthat readers of this blog already know.
How do you use this model for your strategy process?
The strategy process at a glance
The process comprises eight steps:
- Develop the goal
- Formulate a concrete target image so that it is attractive for all participants and they want to achieve it
- Name the current situation
- Developing the path to the goal, i.e. the strategy
- Divide the strategy into manageable sections and provide a measurable milestone
- Fill each section with measures and name the measurable end result
- Define responsibilities and determine the timeframe for implementing the measures with them
- Calculate the budget required by those responsible to implement the measures
You will be familiar with these steps. I will therefore go into the 3 x 5 key questions that make the difference.
1 | Develop target image
The key questions for developing the target image are:
Key questions Market & Society
- What contribution do we as a company want to make to ensure social prosperity?
- Which of our customers' problems do we want to solve sustainably?
- Which technological questions do we want to answer with our expertise?
- How do we make a difference in the market and society?
- What is our entrepreneurial WHY?
Once the market and social promise that you want to make as a company is clear, look inwards and consider processes, systems, structures and people.
Key questions Organisation
- How do we need to design our processes, systems and structures so that we can fulfil our market and social promise?
- What do these processes, systems and structures need to look like in order to work productively?
- In which processes, systems and structures do we want to be state-of-the-art?
- How must our processes, systems and structures be designed so that we can react flexibly to changing markets and societies?
- How do we gain transparency with regard to our business performance?
In the final step of developing the target image, you concentrate on the people who will ensure the success of the first two aspects of the target image.
Key questions People
- Which people inside and outside our company help us to ensure the success of the first two aspects of our target image?
- How can we ensure that these people are prepared to commit their hearts and minds to our entrepreneurial success in the long term?
- How do we ensure that these people feel comfortable with us?
- How do we manage to give each of these people continuous development opportunities?
- How do we manage to give everyone space to live their personal WHY in the context of their work with us?
2 | Formulate an attractive target image
At this point, Saint Exupéry would like to quote: "If you want to build a ship, don't start by collecting wood, cutting planks and distributing the work, but awaken in people's hearts a longing for the great and beautiful sea."
This is exactly what this step is about. The target image must arouse desire, it must be so attractive that everyone has an intrinsic interest in helping to shape it.
3 | Name the current situation
In this step, you quantify the current situation so that you know how large the delta is between your current business situation and your target image. Where do you stand in the respective aspects of the target image? Which figures, data and facts prove this?
4 | Developing the strategy
The key question for strategy development is: "What do we need to achieve our vision?" And to concretise this question, use the market-organisation-people structure again. Below you get some sample questions to help you develop the strategy.
| MARKET & SOCIETY | ORGANISATION | PEOPLE |
| What do we have to do on the market and customer side so that ...? | Which processes do we have to set up again so that...? | What competences do we need to build? |
| What kind of market understanding do we need to build? | What systems do we need to change so that...? | Which of them internally? Which externally? |
| Which customer needs do we need to understand better? | Which structures do we have to abolish so that...? | How do we do that? |
| … | … | … |
In the next step, the strategy elements that you develop in this phase need to be organised into manageable sections and assigned a measurable milestone.
5 | Divide the strategy into manageable sections and provide a measurable milestone
To ensure that the strategy has a chance of being implemented, I recommend that you try out the various elements:
- Can the individual elements of the strategy be realised in principle? (Feasibility)
- Do they make sense for our company? (meaningfulness)
- Are they ethically defensible? (Ethical justifiability)
To give you a more concrete idea of what elements belong to these three questions, I list some examples below.
| FEASIBILITY | MEANINGFULNESS | ETHICAL JUSTIFIABILITY |
| Technical feasibility | Sustainable market success | Conformity with the values of the company |
| Legality | Susceptibility to errors | Conformity with the values of society |
| Realisation time | Risk of failure | … |
| … | … |
If you get three "yes" answers for each element, divide this element into manageable sections, for example into annual and quarterly sections. The guiding questions for this structuring process are:
- What can we realistically achieve in element x by the end of the calendar year?
- If we want to achieve this by the end of the calendar year, what must the result look like at the end of the 1st quarter / 2nd quarter / 3rd quarter?
This structure will automatically lead you to milestones. Make sure that these milestones are specifically measurable. Only then will there be clarity about what needs to be achieved.
6 | Fill each section with measures and name the measurable end result
In this step, you become concrete. Think about the sequence in which the various measures are to be implemented so that you have achieved the desired result at the end of the respective quarter. Take into account any dependencies between the various realisation results. What has to be completed first so that something else can be realised?
How do you ensure that there are no conflicts of objectives and resources?
In my experience, the people responsible for implementing the strategy are defined far too early in the process. This results in conflicts of objectives and resources. I therefore recommend that you first finalise the content-related work from the target image to the measures before you define the responsibilities.
7 | Define responsibilities and determine the timeframe for implementing the measures with them
To ensure that those responsible also take responsibility for implementing the measures, it is essential that they define the timetable.
- By when can you realistically implement the measures with your teams?
- Where do they need support from other teams or external cooperation partners?
- Where does the schedule need to be adjusted again?
This bottom-up check of the schedule is absolutely essential at this point in the process to ensure that the strategy can be implemented without overburdening the organisation.
8 | Calculate the budget required by those responsible to implement the measures
After steps 1-7, you will have all the information you need to determine the budget required to implement the strategy.
You may realise that the strategy you have defined cannot be achieved with the company's financial resources. What do you do then?
Once you have an idea of what your strategy will cost, you can also define the minimum outcome you need to generate in order to afford it. The guiding question is: "What is the minimum we need to generate with our existing business to be able to afford this strategy?
What do you do if you do not generate the budget required for implementation?
If you cannot generate the necessary budget, you need a plan B: Which aspects of your strategy will you change and in what form if you only have a budget of X?
What is the benefit of this approach?
The 8-stage procedure outlined has the following benefits:
- Together with their management team, they develop a strategy that can be realistically implemented without overburdening the organisation.
- The strategy is supported by middle management, as it was developed jointly.
- Conflicts between objectives and resources are eliminated by the process. This significantly increases the chance that the strategy will be implemented within the agreed schedule.
If you would like us to moderate your goal-setting and strategy process, please contact us.
Did you find this article helpful?
