The strategy conversation you can only have here
Growing a business is hard.
It requires two key elements.
We will call the combination of these two elements 'The ❤️ of the strategy'. The heart of the strategy describes how an organisation can use the aligned efforts of their people to overcome a medium term market problem or opportunity to grow.
To ensure we start with an absolutely clear picture of what we are trying to do we need to also define the word 'Strategy' as it is the most overused and misunderstood word.
The most useful description of Strategy is that it is a way about getting into a more powerful position over time and against a changing context.
The ❤️ of the strategy describes how we can get into a more powerful position best using the capabilities and advantages that the people in the organisation bring to bear on the task.
the One Page Everything or OPE is the central container to hold all aspects of the strategy. It is sufficiently succinct to force trade offs and reduce unnecessary waffle from the strategy.
While excessively verbose descriptions of a strategy make the leaders feel more comfortable through the addition of almost every possible option, the OPE ensures that decisions are made not only about what to include but also what to exclude.
Below you have the pieces required to lead your organisation from where it currently is into a more powerful position.
'A more powerful position' is a great definition of strategy because it is concise – which is contrary to almost everything else written with the word strategy in it.
The definition in full is 'A more powerful position over time and against a changing environment'. This sums up exactly what needs to happen for a strategy to be successful. If you are not in a more powerful position over time then what is the point of the strategy and it leaves you to define what 'more powerful' means for you or your organisation.
More powerful could be improved profits, stronger revenue or improved products. More powerful could also describe a stronger competitive position, more customers or a brand that is better understood.
It may even be personal such as a better lifestyle for management and employees. Some may describe it as achieving a significant milestone like a sale or it may be some combination of all of the above. It could describe the impact your organisation has in the world or more specifically your community.
However you define it, more powerful should be something tangible over a period of time. When you get to that time, it should be very clear whether you have arrived in your more powerful position or not.
The objective of the strategy development process is to get very clear on what your more powerful position is and what is required to get there.
valuesDeveloping a strategy is a process that needs to be lead. The reason for this is that the idea on its own and the team of people who implement that idea are inextricably linked.
Strategic ideas alone are not worth much. They tend to pop up in conversations every day and only very few of them are implemented. And a team of people working hard on an idea that doesn't have merit is a waste of time. The two are linked and need to be developed together.
So the strategy development process needs to weave together an original idea, with the team of people who will implement that idea. Along the way the idea becomes more complex and complete as the team polishes and refines it. The team too gets to develop and improve how they are operating and owning the idea.
Teams may be well developed at the start of the process but ideas always need refining. Invariably this refinement of the idea will lead to improvements within the team.
While the idea is being polished by the people who are going to implement it, a tremendous sense of ownership of the idea develops amongst the team. This is a critical and looks like this.
This melding together of idea and team is critical to the success of the strategy. Typically an idea originates with a senior person in an organisation or a founder of a new business. Sometimes it is a team coming together to review the past and reimagine the future.
The critical moment is when the first two or more people have a conversation about an idea. At that point, the strategy development process starts. The process starts with a conversation about what will lead to a more powerful position for the organisation.
At a high level the strategy development process will have the following steps.
The quality of the conversation when the initial strategy idea is formed sets the tone for the conversations that will guide the initial idea into reality. There are key values, elements that everyone in the conversation finds valuable, that ensure the conversations
New strategy conversations start in many ways. It can be a new idea that comes alive through founders or an existing business could be brushing off its strategy to figure out how it can get into a more powerful position. It could be a division of a corporate or a group of companies held in a conglomerate.
However it starts, pay careful attention to both the process of turning the idea into reality and the values that underpin the conversations along the way. These foundations of the process will deeply influence the actual process as it develops.
Most often the process of developing a strategy makes use of workshops and how these workshops are facilitated makes a big difference to the success of the strategy process.
Bringing people together to set or review a strategy is a delicate task. The strategy workshop or series of workshops is at the core of the strategy process. The challenge for the facilitator is to create an environment where people can collaborate, think and plan together.
Here are principles to guide the facilitation of the strategy workshop.
People support what they create
The
process that plays out in the strategy workshop
is to ensure that the team both individually and collectively own the outcomes. The facilitator needs to guard against dominant voices (including their own) that may have good ideas that are not supported by all of the team. The team need to walk away supporting what they have come up with because they have created it themselves.
First the team
The state of the team working on the strategy has a large impact on how successful the facilitator can be. A well functioning team is a significant advantage. As the facilitator, you can assess the state of the team during the preparation when you speak to the leader, the group and people individually.
Paying attention to the team will give you good insights into the likely quality of the conversations in the strategy workshop.
Google's two year research looking at more than 250 attributes of 180+ active Google teams turned up a surprising result. Julia Rozovsky, an Analyst from Google People Operations reports that they were pretty confident that it would be a mix of individual traits and skills that made up a great team. As she says, "take one Rhodes Scholar, two extroverts, one engineer who rocks at AngularJS, and a PhD. Voila. Dream team assembled, right? We were dead wrong. Who is on a team matters less than how the team members interact, structure their work, and view their contributions."
At Google they learned from their research that there are five key attributes that set successful teams apart from less successful teams.
In a conversation with team members before the workshop, the facilitator can assess what evidence appears for each of those attributes. More evidence equals more chance that the team will function well in the strategy process.
The paradox of who lead
s
There is a delicate balance of leadership between the CEO or leader of the team and the facilitator of the strategy workshop. Essentially the CEO hands over the leadership of the team to the facilitator for the duration of the strategy workshop. This is a paradox because while the facilitator is leading the process, the CEO is in the room and of course, is also playing a leadership role.
The advantage of a facilitator leading the process instead of the CEO is that the CEO is freed up to participate
The relationship between facilitator and CEO is critical for this dance working well. As a facilitator it is important to spend time with the CEO before, during and after each session to ensure that there is strong alignment and that the relationship is as strong as possible.
A strong relationship between CEO and facilitator means that each supports the other in getting to the agreed outcome. Either the facilitator or the CEO being over controlling or on the other hand disengaged will negatively impact the process.
Preparation and setting objectives
In addition to the items above, the facilitator of a strategy workshop needs to agree with the leader of the team what their objectives are for the strategy workshop. Typically this will be to set, to clarify or to revise the strategy for the organisation.
The One Page Everything (OPE) provides an ideal base for capturing the strategy and the workshop if the forum where the process of completing the OPE including the priorities , immediate next steps and review date .
Further objectives can be collected from the team before the workshop or at the beginning of the workshop. A good start to a workshop is to review the objectives that have already been collected whether from the group leader or participants. Putting them up for everybody to see and asking the question, 'what do we want to achieve by the end of this process?', allows everyone to contribute.
It is worth spending enough time on this to make sure that everyone is strongly aligned with the desired outcome. Set up well these objectives are a guide for the facilitator to revisit throughout the process. When things get tough or bogged down in detail, the objectives provide a route for the group to dig themselves out and get back on track.
Ground rules
The objectives form the 'What' of the strategy workshop and the ground rules provide the 'How'. Asking the group to agree how they will engage with each other sets the tone and ensures that there are ground rules that guide
Timing and structure
Deciding whether you are meeting in person or online has a bit impact on the timing and structure of sessions. Typically in person sessions will be longer and a full day or days will be dedicated to the strategy workshop. If the sessions are online then it is likely they will be broken into shorter sessions of two to four hours and these will run over a number of weeks.
Agreeing the timing and structure with the group is important so that everyone has similar expectations and there are no surprises in the strategy process.
Who participates
The tension that exists in a strategy process is that if the group deciding the strategy is very small it is efficient but means more work is required to engage people across the organisation in the strategic decisions. If on the other hand the group is too big then it makes the process very hard to manage while providing everyone a space to contribute.
Typically a good group size is four to eight people. It is possible to have more if you are prepared to have longer conversations and dedicate more time to the process. More than 12 people gets quite unmanageable.
The strategy container
Setting the objectives, agreeing who is part of the process, setting ground rules and creating an environment are all elements of creating a strategy container. In the same way that Google's research identified that psychological safety is the number one element of high performing teams, a well constructed and 'safe' strategy container, where participants understand why they are there, what they are doing and how they are doing it, creates a fertile environment for effective strategy development.
The facilitator
By now it is clear the key role that a facilitator plays in the process. It is a role filled with paradox.
To do this, the facilitator needs to have context for how organizations work. This includes decision structure and the politics of the group. They also need a deep understanding of people, their personalities, individual psychology and group dynamics. Lastly a good understanding of how people's behaviour is influenced by systems is incredibly valuable as a strategy facilitator.
"
Making the simple complicated is commonplace;
making the complicated simple, awesomely simple, that's creativity."
- Charles Mingus
The One Page Everything (OPE) contains your strategy at the highest level, your priorities, immediate next steps and confirmation of your next review date.
It provides direction to the people in your organization allowing them to make decisions that support the implementation of your strategy.
It is purposely succinct so as to force trade-offs and drive clarity to the very core strategic thinking that puts your organization into a more powerful position.
Too often strategic thinking is blurred by detail that delves below the strategic level. Long lists of initiatives and goals that are difficult to recall, work against a clear and focused view of the strategy that can align everyone in the organization.
The One Page Everything or OPE takes a different approach. Supported by behavioural research, it makes it very easy for every person in the organisation to understand the strategy and more importantly their role in implementing it.
Describing the long term strategy, the OPE goes further to highlight the most important initiatives that are required to deliver that strategy breaking in down into actions in the next year and next quarter.
Lastly it sets you up for the immediate next steps and how you will regularly review and ensure you are on course with your strategy.
Each section of the OPE is described below giving an explanation of how they can be used.
“A strategy is a way through a difficulty, an approach to overcoming an obstacle, a response to a challenge. If the challenge is not defined, it is difficult or impossible to assess the quality of the strategy.”
- Richard Rumelt
The guiding strategy is a story, it should be simply stated, easy to understand and written in a narrative format. It is the essence of your strategy, the reason you are able to carve space into the marketplace and exist. Without your guiding strategy or story you would not have a business.
For Tesla it is
to create the most compelling car company of the 21st century by driving the world's transition to electric vehicles.
If we dissect this we can see the pieces of the Tesla guiding strategy:
From this we can see how they have told a story, it is the story of the world navigating a major change in the 21st century. At the beginning of the century, most cars were petrol driven and one hundred years later Tesla will be integral to most cars being electric.
More than just integral, the Tesla brand and business will stand out right in front of this change, the most compelling force in the transition.
The story is also inviting. It is easy to place yourself, ourselves, and myself into the story. If we want to be part of this future, a pioneer, a contributor to the story that they are describing then joining forces with Tesla is the way that we can do it.
It is unambiguous and doesn't leave me wondering. We can easily understand the story and hence we can understand the strategy. This is a useful example of a Guiding Strategy.
For AirBNB it is that people are prepared to share their houses and the company focuses on building an end-to-end travel platform that will handle every part of the trip.
The guiding strategy is beyond numbers and a goal.
To raise revenue or own 3% of the market is not a guiding strategy as there is no insight in those statements. They are simply aspirations. To be a guiding strategy, it needs to be able to guide now and in the future.
It is a long term view of how we will carve out a piece of the market and win against others and take our rightful place in that market. It has to answer the question of how we compete. Raising revenue or taking 3% of the market does not do that.
The guiding strategy combines competitive insight and customer proposition and tells the story of how we compete in the market place.
How do we develop the story of our business?
An effective way is to tell the story of your business. And some of the best storytellers in the world are the people who brought us Finding Nemo, the team at Pixar.
The Pixar team use a very simple formula for telling a story.
If we apply this to the story of Nemo it looks as follows:
You can translate these prompts into a story for your business as follows:
The story for [name of business] so far
If we apply this to Tesla then this is the Pixar version of the Tesla guiding strategy
The story for Tesla so far
From the above story you can see how it can be summarised back to where we started the page, the story of Tesla, or Tesla's guiding strategy is to create the most compelling car company of the 21st century by driving the world's transition to electric vehicles.
Contact me for your copy of the Pixar story / Guiding Strategy template in Keynote, Powerpoint, PDF or Google Slides.
Next - the Purpose .
“Purpose is not the sole pursuit of profits but the animating force for achieving them. Profits are in no way inconsistent with purpose - in fact, profits and purpose are inextricably linked.”
- Larry Fink, CEO of BlackRock
The purpose is raison d'etre for the organisation.
It is the why beyond simply to make money.
Commercial businesses all exist to make money, there is nothing unique about this. Money is score keeping, and allows us to see how well we are doing. Purpose is much bigger.
Australian REA Group define their purpose as being to "change the way the world experiences property". The statement describes what will be different as a result of their company being around. That is a powerful purpose. It is also quite exciting to be a part of it.
The purpose is the dent left in universe as a result of the company being around. Or it is the void that will exist if the organisation had not ever come into being.
One way of testing whether your purpose is on the right track is to ask your rank and file employees what motivates them to work for you. If there is a regular mention of your purpose then you are on the right track.
Next is Values .
“Companies that enjoy enduring success have core values and a core purpose that remain fixed while their business strategies and practices endlessly adapt to a changing world.”
- Jim Collins and Jerry I. Porras
Organisations are made up of people and the values reflect what those people hold to be valuable. Initially, values are set by the owners or a management team. To influence the organisation they need to move beyond just words. We should be able to see evidence of the values wherever we look.
We can see lived values when they inform the big decisions. They find their way into the lifeblood of the organisation. If not then they are as William Shakespeare said, 'Mere prattle without practice'. They hang up on the wall or are printed prominently in the annual report, but everyone knows that they are empty words.
To move beyond just words they should be present in every big decision. Certainly people should only be hired if there is a strong sense that they can live the values. Those who don't live the values should be fired. Decisions made with values in mind make the values stronger, and the converse is also true.
Values provide the moral or ethical underpinning to the organisation. Robert Wood Johnson created the J&J Credo in 1943 - a manifesto describing the values that underpin their responsibilities to 'patients, doctors and nurses, to mothers and fathers and all others who use our products and services'. It goes on to describe the company’s responsibility to employees, communities and finally stockholders. To this day the J&J Credo serves as the 'moral compass' and 'recipe for business success’.
Alongside the Guiding Strategy, Purpose and Values sits the Playing Field. This is how we describe the Customers, Geography and Product or Services.
“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”
- Sam Walton
The triangle of Product - Customer - Geography is a powerful lens through which to look at where the organisation plays. Each needs to be clearly defined and the three need to complement each other.
A brilliant product or service that doesn’t meet the needs of our particular customers is a recipe for failure. Likewise a good product or service matching well defined customer needs in a geography where we have no competence to operate, is also going to be challenging.
All three elements of our playing field need to be tightly integrated. Each should reinforce the next and make an even more compelling proposition for serving our purpose and strengthening our guiding strategy.
Together they make up the playing field on which our strategy is expressed.
“Don’t find customers for your products, find products for your customers.”
- Seth Godin
Our product or service (we will use product for both hereafter) is why our customers pay us. It can be an object that we buy and sell to them or a service that we charge them for. Maybe a combination of both. We can get laser sharp about this by asking ourselves what our customers expect when they hand over their money.
It is key that we look at our product through the eyes of our customers. Unless we can understand their motivations and desires we will always be left wondering where to go next with our product development.
We may get lucky and overlap with our customers needs for a while, however it will become increasingly difficult to meet them if we don't understand the core motivations that customers have when they buy our product.
Lastly the product should be simple to explain. By continually refining our description, we can get it down to 30 seconds or less to explain what our customers receive when purchasing our product.
This clarity is needed as the product sits on the very outer edge where our organisation meets our customers. Non clarity at this important interface will cause confusion as we move back into both our and our customer's organisations.
“The more you engage with customers the clearer things become and the easier it is to determine what you should be doing.”
- John Russell, President of Harley Davidson
Without a keen understanding of your customer, you are poking around in the dark when it comes to focusing your organisation on their needs. With some slight variations between B2B and B2C, this is what you need to take into account to build a customer persona or profile.
Once you are clear on the above, distil a description of your customer into a simple statement. Examples include, "35 - 50 year old woman who are time pressed", "Manufacturing businesses between $1B and $10B in revenue" or "Youth who want to make a positive impact on the world".
“Verbosity leads to unclear, inarticulate things.”
- Dan Quayle
Where do we operate right now. Which countries or which cities or which suburbs. Be very specific in order to demarcate the boundaries of where your organisation exists.
We always have ambition to go into new geographies because they promise a bigger market. This is the tangible element we see before we expand. What is unseen is the complexity of dealing with different customers with a different culture and different ways of doing business. Add tax and regulatory issues and before you know it, you can lose focus on your core business.
Asking anyone how their geographic expansion went is the same as asking someone about their house renovation. Nobody overestimates the complexity.
Play in geography’s where you believe you can win and take advantage of home ground advantage. When there is a good reason to expand you can add new geographies but be meticulous about which are more important.
An example of this would be "Focus on United States and the United Kingdom with a measured $1 million investment to experiment in Australia”
The BHAG or Big Hairy Audacious Goal, is an idea popularised in the book, “Built to Last: Successful Habits of Visionary Companies” by James Collins and Jerry Porras. A BHAG is a long-term goal that challenges the very nature of a business’ existence.
The way we use BHAG's in the One Page Everything is to describe a long term goal that moves us decisively towards our purpose. It is an exciting and tangible dream that when described is immediately understood by everyone in the organisation. The BHAG - when done well should cause everyone to stop and say - "wow - that would be amazing”.
There is magic in a BHAG like that. It will cause your team to stretch beyond the obvious, to be motivated to overcome obstacles and to dig deep for energy and inspiration, even when times are hard. It also provides a rich environment for innovation. It gives people a way of pulling together and giving all that they have individually to create an incredible collective effort.
Examples
* In 2000 Walmart's revenue was $156B.
“Your brand isn't what you say it is. It's what they say it is.”
- Marty Neumeier
This is the promise that we make to our customers. It is our word, our bond, our guarantee. We are committed to doing this no matter what and if we do it well our customers will love us.
Of course loving customers are good for business so if we are able to build a brand promise that we can deliver on day after day, week after week and year after year, then we are building a tremendously strong flywheel that ensures that we continue to win.
The brand promise should reflect the experience that customers have with our business and our brand. To understand this we need to walk in their shoes and to have empathy for how they see, feel, hear and touch our organisation. This is not intuitive, our default is to think about our product, what we offer, how we will provide service, what we can do for you. This is important but is only half the picture. We need deep empathy to understand our brand from the perspective of our customers.
Here are three examples of brand promises from well know brands.
In what way can we measure that we are:
The measures are numbers or ratios that quantitatively tell us that we are moving in the right direction. They are unambiguous indicators that we are making progress, or not. Are we doing enough to get us to our intended outcome.
When choosing measures it is better to favour leading indicators than lagging indicators. Ideally the indicators point in the direction that we are headed. This is better than having to wait for an outcome to know how we have done (lagging indicator). Examples of leading and lagging indicators include.
| Area to measure | Leading Indicator | Lagging Indicator |
|---|---|---|
| Financial | Product roll out complete | Revenue increase from new product |
| Customer service | Customers per account manager ratio | Net promoter score |
| Employee engagement | New accountability structure rolled out | Gallup employee engagement score |
“Building a visionary company requires one percent vision and 99 percent alignment.”
- James C. Collins
The nine elements on the One Page Everything are tightly integrated. While we zoom in and work on each individual item we also need to zoom out and keep all the parts in view against each other. Ensure each of the elements is discretely described and integrates with the whole. Here is how the different parts of the OPE fit together.
Measures give us a quantitative view on how we are achieving the dream or BHAG, delivering on our brand promised and living our purpose.
The brand promise tells the story of how our customers (in specific geographies) are experiencing our product.
We created the product because we believe it will make a difference for our customers and even broader because it allows us to live our purpose. This is dependent on our teams living our values while they do their work.
And all of that together gives us a competitive place in the market that ensures that we win over time.
“Things which matter most must never be at the mercy of things which matter least.”
- Johann Wolfgang von Goethe
A priority is the one thing that takes precedence over all others. There is only one. It is only in the 1940's that business people have started using a plural version of the word, priorities, in an attempt to get more important things done.
Who hasn't been in a meeting that concludes with more priorities than anyone will ever remember. The flawed logic is that by having numerous priorities we make more things important and get more done. It is flawed in that everything cannot be a priority. The act of choosing and having numerous priorities reduces the focus and the likelihood of success.
When attempting to grow an organization, a priority is intended to surface the most important things needed to succeed. Having too many priorities causes confusion and misalignment throughout the organization.
The rule of thumb should be that priorities must pass the 3am test . They need to be remembered and recalled by everyone who is working on them. If a team member needs to dig out a document to remember the list of priorities then there are too many.
There is a natural tension between moving forward in a minor way on many items or moving forward significantly on a few priorities. The One Page Everything limits you to only five priorities over a period (90 days, one year, longer term). This is intentional to provide focus and to ensure alignment across the organization.
The point of having a priority is about making a choice, pushing aside the unimportant and elevating the most pressing items.
Priorities are also always for a specific period of time. With limited priorities in mind for a period, we reduce confusion, clutter, unclear objectives and overwhelm. Instead we get focus and direction, we manage trade-offs effectively while driving alignment and accountability.
What about the other important items not are not priorities?
Keep them all on a list and do them if you can. Make sure however that if ever there is a decision to be made about what goes first, the priority jumps the queue. There is nothing worse than finishing a quarter or a year and having completed all the non priority items and your priority sits incomplete.
Over a quarter or longer period, you can have more than one priority because you have time to work on more than one. The short video below explains how to think about priorities when you are setting them for a three month period.
Critical to managing priorities is to understand how to track them and how to cascade them through the organization.
"If everyone is moving forward together, then success takes care of itself."
– Henry Ford
Critical to the implementation of any strategy is the cascading of priorities. This happens in a very simple and elegant way which creates alignment across the organization.
What is the format used to set these priorities?
A priority fair is a workshop that lasts an hour or two and provides a forum where people who are working together on priorities can sense check and ensure that there is alignment in the work they do on their priorities.
For example, the sales and marketing teams may work together on both their team priorities (the priorities for the sales team and the priorities for the marketing team) and the individual priorities of all of the combined members of the sales and marketing teams.
All of the priorities would be written up and displayed in a way that all members of each team can review and add comments. They would typically be aiming to achieve the following outcomes:
A draft agenda for a priority fair would be as follows.
The video below explains the process of cascading priorities.
Critical to managing priorities is to understand the role of priorities and how to track them .
“If you want to make good use of your time, you’ve got to know what’s most important and then give it all you’ve got.”
- Lee Iacocca
The tracking of priorities is the simple management system that you need to put in place to ensure that the priorities you have set for a period are going to be achieved.
The 'system' should be simple and easy to update and share. A Google sheet or Excel spreadsheet will work well. Each priority is clearly stated in a way which makes it explicit whether the priority has been achieved at the end of the period or not. It should also make it clear whether progress is on track or not.
A red / orange / green status mechanism is used to indicate whether the priority is on track or not. Review meetings are set up at least monthly. Some organizations will also include a review of the priorities in a weekly management meeting. Daily standups are likely too frequent for a full review of priorities however it would be normal to highlight issues that have arisen with priorities in daily standups.
The video below gives a brief overview and some more detail on how to track priorities.
In addition to tracking priorities it is important to understand the role of priorities and how to cascade them through your organization.
“Never Leave the Scene of a Decision without Taking Action”
- Anthony Robbins
Once the strategy and your priority is clear, decide what actions you need to take in the next week. These are your immediate next steps.
In these steps describe what you need to do to make the changes in your organisation to align each person around the agreed strategy.
They should be specific and they must be assigned to a person in your executive team, not delegated elsewhere. Once performed, these actions should have created strong momentum for the implementation of your strategy.
