Seven steps to a strategy for your organisation
Organisations are constantly faced with dynamic change in their context. This requires them to change their vision, mission and strategy from time to time. Projects and programs are intended to execute the strategy and therefore are dependent on a clear set of strategic goals, intended benefits and / or expectations defined by the top management of that organisation. The IPMA Organisational Competence Baseline (IPMA OCB®) [http://ipma.ch/resources/ipma-publications/ipma-ocb/] describes the process for a project-oriented organisation. It emphasis, that the process of developing a strategy is not only a top-down process, but should also be built on a bottom-up approach, collecting lessons learned and using them for the strategic intend of an organisation.
In recent years I have had several occasions to accompany organisations in strategy development, in business context as well as in the not-for-profit sector. Typically, I apply an approach that leads in seven steps to a new strategy. Figure 1 shows the seven steps of the strategy development. These steps are briefly explained in the following:
Step 1: Firstly, it is important to analyze the context of the organisation together with the most important influencing factors (e.g. political, economic, social, technological, and legal factors). Based on that, the status quo of the organisation and its development over the past years should be looked at. Next step of the analysis is the self-perception of the organisation, its value proposition, business model, services and so on. Referring to the main competitor or any benchmark, an in-depth analysis of own strengths, weaknesses, opportunities and threats (“SWOT analysis”) may bring valuable insights regarding the need for strategic action.
Step 2: In this step the horizon for the strategy is being defined. My experience shows that seven years into the future is a reasonable horizon to look for. With the help of scenario planning or foresight possible development scenarios for the organisation should be identified. These scenarios can also be deposited with probabilities, knowing which scenario may serve as a “best case” and which one as a “worst case” for developing the strategy.
Step 3: In a dynamic context, an organisation desperately needs clear values. They express what is important to the organisation, what works and what does not. Values are fixed stars of an organisation. However, often the staff is not aware of the values. They develop over a long period of time and are spread through rituals, stories and / or symbols. It is worthwhile to investigate the values in more detail and communicate them pro-actively.
Step 4: On the basis of the status quo, the SWOT analysis, future scenarios and values, a vision can be formulated. A vision expresses a (vague) image of how the future for an organisation (might) look like or what the organisation through the staff should achieve. In my view, this does not necessarily be “realistic”. It should induce positive associations, set free energies and point out the direction for all people affected. A vision should be less in words, but more articulated through images or illustrations to touch people.
Step 5: People need both, a touching vision and tangible, quantified goals for the future. Otherwise, it is difficult for them to align their actions and projects on a long-term basis. For example, the GPM German Project Management Association has formulated a strategic goal to grow from nowadays 7,000 members to 20,000 members in 2020. All initiatives and projects can now be checked to see whether they pay into that strategic goal. However, the strategic goals should be well balanced, not only focusing on one goal or dimension. Thus, a balanced scorecard could help to balance the strategic goals in different dimensions (e.g. customer dimension, financial dimension, process dimension, and development dimension).
Step 6: The penultimate step is to define the mission of an organisation. It often expresses the strengths of an organisation. With self-confidence, based on the known strengths a mission is formulated by the organisation to be fulfilled in the world. The mission helps to set clear side rails within which the organisation’s activities are performed.
Step 7: Now the main work of the strategy development begins, namely the formulation of strategic initiatives, programs and projects to achieve vision, mission and strategic goals. Sometimes this is an overwhelming task, why an organisation should undergo this process once a year and align the activities based on the strategic direction setting as well as available resources and capabilities. This is certainly one of the most critical tasks, because everyone wants to realize his or her own “hobbies”. Here it is important to be consistent (and disciplined) and not to lose the big picture out of mind.
This approach looks simple. It could be performed in one or two days, depending on the complexity of the organisation and the degree of preparation of the participants. In practice, the approach has certainly its pitfalls. In particular, all participants should prepare their views on the seven steps. On the one hand, only a limited number of people should attend the strategy development workshop. On the other hand, the process is dependent on the input from various functions, perspectives and hierarchy levels. This is why you may perform the process in several iterations, and thus improve the results. It certainly helps to engage a neutral facilitator for the process. However, the facilitator does not know the organisation and its context and is therefore solely focusing on the process and the communication. Sometimes it makes sense to use a senior employee of the organisation to facilitate the strategy development. In that case, the facilitator always needs to be neutral in regards to the participants and the content. Finally, the strategy development is only a flash light and should be repeated on a regular basis. In any case, the strategy development is an exciting undertaking that unleashes creativity and motivation. Enjoy the application!