Modern Leadership | Strategy Development

Target and strategy development for sustainable corporate success

From Sabine Walter, Head of netzwerk managementberatung | coaching

The classic goal-setting and strategy process is similar in many companies. The top management thinks about a growth rate. This results in turnover and EBIT, which are to be achieved at the end of the respective years. These figures are set and "pushed" into the organisation. Middle management works out measures and finds itself in various budget rounds until, in the end, goals and measures are defined, behind which the members of the company are only conditionally committed and which, in more and more cases, lead to the organisation being overburdened. Because, although everyone complains about the scarce human resource, it is not usually reflected in ambitious goals and strategies.

As a result, this form of goal and strategy development does not provide a basis for sustainable corporate success.

Creating the framework conditions for companies to be successful in the long term is the core of our work as a Organisational developer. Therefore, in this article I would like to outline an alternative procedure for the goal-setting and strategy process.

The starting point of the goal-setting and strategy process is a Modelwhich loyal readers of this blog already know.

How can you use this model in your goal setting and strategy process?

Procedure for the development of a sustainable target image and a corporate strategy derived from it

The procedure I would like to present to you consists of 6 steps. The steps as such will be familiar to you, what makes the difference are the questions that, from my point of view, should be asked in these respective process steps in order to develop a sustainable goal picture and a strategy derived from it.

Let's now look at these six steps in detail.

1 | Develop target image

From the above model, questions can be derived to help you define the key elements of your business goals and strategy. I like to use the following guiding questions when I accompany companies in this process:

You have certainly noticed that the guiding questions listed have different time horizons. It is advisable to look at all temporal levels of the target image. Always start with the level that is furthest away in time and develop your picture from the general to the concrete.

If you and your team find it difficult to develop a target image with these questions, it can be helpful to approach the positioning on the market and in society via a negative delimitation. Questions for this are:

• Which markets / customers do we no longer consider in the future?
• Which problems / questions do we no longer want to deal with?
• What would our business model look like if we copied our competitors 1:1?

These answers tell you what you don't want (any more) and thus perhaps make it easier to become clear what you want to stand for in the future.

Once you have gained an idea of your positioning in the market, turn your gaze inwards and look at processes, systems, structures and the people.

Before you pour the answers to the various guiding questions into a target picture, you should check them against three questions:

• Are the ideas fundamentally feasible? (Feasibility)
• Do they make sense for our company? (meaningfulness)
• Are they ethically defensible? (Ethical justifiability)

The aspects of the target picture that get a "yes" to all three questions can be included as a permanent part of your target picture.

To give you a more concrete idea of what elements belong to these three questions, I list some examples below.

2 | Formulate target image

In order to make the target picture understandable for all members of your organisation, I recommend formulating it. Start with the year for which the target picture applies, formulate it in the present tense and quantify where it makes sense.

Once you have your target image, the next step is to derive a strategy from it.

3 | Derive strategy

The guiding question for strategy development is: "What does it take for us to achieve our target image?" And to flesh out this question, again use the market-organisation-people structure. Below you get some sample questions to help you develop the strategy.

The next step is to break down the strategy modules that you develop in this phase into measures and put them into a time schedule.

4 | Derive measures and classify them in time

In this step you become concrete.

• What exactly has to be done and by when?
• What is the concrete first step after the strategy workshop?

Note: When planning the time schedule, pay attention to possible dependencies of the different measures.

5 | Define responsibilities

In order to implement your strategy in a targeted manner, you now define concrete responsibilities for each measure. Who takes care of what?

6 | Quantify strategy and develop plan B

You will have noticed while reading that all the questions you ask yourself in the first 5 steps of this procedure for developing a goal picture and a strategy are of a substantive nature. No question considers growth. Because: Growth can be a resultant in this procedure.

Nevertheless, it is of course absolutely necessary that you quantify the strategy and develop a feeling for whether the target image that you have defined can be achieved with the financial resources of the company. The guiding question for this can be:

If we implement this strategy in this way, what does it mean for

• our budget
• our investments?

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?

And you should develop a plan B to be prepared in case the necessary budget cannot be generated. "What aspects of our strategy do we change and in what form should we only have X amount of budget available?"

Conclusion: Target and strategy process for sustainable corporate success

Sustainable corporate success should be the starting point for the development of target image and strategy instead of growth

In order to lay the foundation for sustainable corporate success with your corporate vision and the strategy derived from it, we recommend a 6-step approach:

1. Develop target image based on the triumvirate of market/society - organisation - people
2. Formulate the target picture
3. Derive strategy
4. Derive measures and classify them in time
5. Define responsibilities
6. Quantify strategy and develop plan B

What is crucial in this approach is that you focus on the content aspects of your business through the way you pose the question and not on pure growth. Growth can be a result of your approach.

In a world where scarce resources play an increasingly important role, it is entrepreneurially necessary to to say goodbye to the driver "growth. The companies that will be successful in the long term are those that understand how to solve problems that exist in the market or in society in an intelligent way.

If you would like us to moderate your goal-setting and strategy process, please contact us.