Video transcript:
Hello and welcome to this fifth video in our series.
In this video we are going to focus on how to create effective strategy – that is, strategy that everyone will buy into, that will deliver the results you want, and that you have the capability and motivation to execute and sustain.
We are going to recommend ways of working, and share the practical, workable tools you will need to accelerate your transition from intention to action, whilst ensuring the rigour of your thinking and plans.
As previously, we’ve structured this video and the transcript so you can watch or read the whole thing, or jump to the sections that interest you most.
The areas we will cover in this video are:
Effective Strategy Development For SMEs
16 Questions An Effective Strategy Document Should Answer
8 Steps To Create Effective Strategy In SMEs
Mind The Gap: From Strategy to Implementation
Bridge The Gap: Your FREE ‘GOAL’ Template
Let’s get right into the first section.
What Is Strategy?
Strategy is concerned with the choices you make in developing and executing your business model.
It considers the different ways you could achieve your goals in a given context, identifies your chosen route and weighs the pros, cons and trade-offs that you are accepting in choosing to go one way and not another.
The more these choices complement each other and become mutually reinforcing, the more effective and sustainable your overall strategy will be.
Effective Strategy Development For SMEs
To be effective, strategy needs to be based on good quality inputs such as management information, market intelligence and customer insights. These will be the focus of future issues of this series. In this video, we are considering the processes required to develop effective strategy in SMEs, assuming these inputs are available.
In this context, the most important yet most often neglected requirement for an effective strategy process is documentation – of all the choices and considerations referred to above.
Documentation is vital and enables three things to happen:
- Your strategy document creates a focal point for clarification, challenge and refinement of the choices you intend to make, BEFORE you begin to assign scarce resources to implementation planning. More of this later.
- It increases the likelihood that you will make more balanced, more conscious and more complementary choices over time that together, add up to a coherent overall business strategy.
- It records the context that gave rise to the choices you made regarding a particular objective, that all stakeholders can refer back to, later. This can be extremely valuable. For example, if that context suddenly changes and you need to consider whether a course correction is needed, then a clear record of the choices you made and the reasoning and assumptions behind them will help.
It can similarly be helpful if confidence is waning, memories are fading – or worse still, history is being rewritten to suit a particular agenda.
Strategy documents can also become a store of collective learning – a way to ensure that a business can review and learn from its choices over time, and enable future generations of leadership and management to do the same. Too often, this learning resides in founders’ memories and results in lessons being missed and mistakes repeated.
A failure to document can and too often does give rise to the following outcomes:
- Different strategies exist in the minds of different stakeholders, who fail to realise that they are envisioning different ways forward. They waste time and effort in circuitous discussions.
- Charismatic leaders or simply those with the most authority impose their preferred strategies on colleagues. These take no account of their personal blind spots and fail to benefit from others’ expertise and experience that could have improved them.
- Businesses jump from idea to implementation and miss strategy out altogether. This typically results in unnecessary costs, lost time, and wasted resources whilst different parties try to work out what they are meant to be doing and how best to align this with their existing priorities.
More often than not, the end result is a return to the ‘drawing board’ as execution fails and frustration mounts. This is the worst of all outcomes and comes at the expense of the wider team’s belief in the capability of leaders to create effective strategy.
16 Questions An Effective Strategy Document Should Answer
An effective strategy document answers a number of questions; including those we have shown here. Take a moment to review them :
- What is the goal we are pursuing?
- Why are we prioritising this goal over others?
- Who are the key stakeholders?
- What will success look like for each of them and the business as a whole?
- What SMART objectives attach to this goal?
- What are the different ways we could achieve it?
- What is our chosen way forward?
- What workstreams will this entail?
- What lead measures will indicate if we are on or off track?
- What are the pros and cons of this solution?
- What internal & external capabilities and resources will be critical for success?
- What capacity will be required in each?
- What is the anticipated investment and financing strategy?
- What are the critical assumptions that have influenced our recommendations?
- What are we foregoing or choosing not to do in making these choices?
- What reaction to this strategy do we anticipate from third parties?
You will no doubt refine and add to these questions to best fit your context, needs and preferences.
A strategy document should be concise, written in plain language and presented in a format that is easy to digest for all stakeholders, whilst answering these questions. The last thing you need or want is a bookend. An effective strategy document will be a living document that you refer to repeatedly as a project unfolds and your strategy meets reality.
FREE Strategy Worksheet For SMEs
This worksheet is designed to help you capture and structure your thoughts about your desired outcomes, and preferred strategy for achieving them, in a quick, yet systematic way. You can then translate these into whatever format works best for you and your business.
The 16 questions detailed earlier are included with it so that you can reference them easily.
You can download your FREE Strategy Worksheet using the link provided in the Helpful Links section of this blog.
8 Steps To Scalable Strategy In SMEs
Developing effective strategies need not be complicated or time-consuming for SMEs. Done well, however, it will almost certainly save cost, reduce time and increase engagement with your chosen way forward.
As you approach your next business planning cycle, or the next time you are considering a significant investment in your business, review your experience to date of developing and implementing strategy.
Did the end to end process prove effective and time-efficient, or did you and your team fall into some of the pitfalls highlighted above? Is your approach repeatable by others, and will it scale with your business as it grows?
Discuss this with your management team and if there is scope for improvement, agree that in future, your business will adopt a consistent template and scalable process for effective strategy creation and documentation.
This should include a core set of questions that all strategy documents will address. As a starting point, use the 16 questions set out earlier.
As a minimum, your process should include the following steps:
- Define and agree the strategic goal & timeframe
- Identify relevant stakeholders and their roles in relation to strategy formulation
- Who will be Accountable or Responsible for different elements of strategy?
- Who will need to be Consulted, and/or Informed?
- Who will draft and proof-read the strategy document pre-publication?
- Who will ultimately approve the strategy?
- Agree what success looks like for each stakeholder and that none are mutually exclusive
- Gather inputs and information
- Draft the strategy document; checking it answers all 16 questions as a minimum
- Publish and invite feedback from relevant stakeholders within clear parameters
- Review the feedback, refine the strategy if appropriate and recommend for approval
- Confirm approval including any conditions attached to it.
At the outset, it will be important to make clear whether you are giving the different people involved a voice, or a vote in the final decisions. Ambiguity here can create all sorts of unhelpful emotions and distractions later.
Once approved and the next steps agreed, the approved version of the strategy document should be held in a secure location with appropriate security and access rights. Remove any further editing rights unless a course correction is required at a future date. If this need should arise, ensure that proper version control is applied to the strategy document.
Mind The Gap: From Strategy to Implementation
You have now chosen the best way forward to meet your goal, having taken and weighed the input of all relevant stakeholders.
Your next challenge is to translate your strategy into an efficient and effective implementation plan, and to maintain everyone’s support and understanding through this next step in the process.
Once again, a couple of traps for the unwary risk slowing your progress at this point:
- The same person that developed the strategy may not be the best equipped to plan its execution – often, especially as businesses grow beyond 50 or so employees, leaders lack the detailed operational experience to know how best to get things done day to day. An effective handover from leadership to management may be required to achieve this.
- The gap between a concise strategy document and a detailed implementation plan is too great. Some stakeholders on either side of the leadership / management relationship may disengage from the process due to their natural preferences for more or less detail, meaning that it does not earn their commitment.
- This disengagement can create crossed lines of communication and frustration later, as stakeholders are unclear about accountabilities, responsibilities and workstreams on the project. Subsequently, when they need information, they approach the wrong people and get incorrect or incomplete answers, resulting in a return to the circuitous discussions, wasted time and lost momentum we mentioned earlier.
Bridge The Gap: Your FREE ‘GOAL’ Template
In order to facilitate a handover from leadership (strategy) to management (execution), consider using a GOAL template to bridge the gap, and keep everyone on board.
This will provide an ‘at a glance’ overview of how your strategy translates into an implementation plan, using an acronym everyone can understand and remember:
G (Goal) – the overarching outcome your strategy is designed to achieve
O (Objectives) – the measurable targets that will demonstrate progress towards it (agreed by both leadership and management) and who is accountable for their achievement overall (leadership)
A (Activities) – the work streams required to meet the objectives and who is responsible for each (managers)
L (Lead measures) – the indicators that will confirm appropriate activities are being initiated and sustained to create progress towards the objectives (day to day operational reality)
Those who like less detail can use this as their reference document, whereas those responsible for detailed implementation will likely want to take one more step and develop this out into a Gantt chart.
This will ensure that the individual tasks required for each workstream are identified and planned out, and the linkages and timeframes between the different elements are understood and tracked.
You can download your FREE GOAL Template using the link provided in the Helpful Links section of this blog.
Here you will also find a link to an excellent Gantt chart that you can use if you want to.
How To Get Started
If you have an agreed strategic goal in mind, work through these steps to get started right away:
- Review your past experience: does it suggest that your existing ways of working are sufficient, or do you need a new strategy creation process?
- If you need a new process, schedule an appropriate time to discuss this with your team and build commitment to a new, scalable and repeatable approach.
- If you are confident that your process will prove effective and time-efficient, then download your strategy template, review it and the 16 questions an effective strategy document should answer, and start shaping your thoughts and ideas.
Remember to review the helpful links on the blog page for further information and inspiration.
Next Steps
Please, leave any comments on anything you have seen or heard in this video, below, as well as your rating of it – we would love to hear from you and promise you a quick reply.
If you believe there is more potential to be uncovered in your business, book an introductory call to discuss how we can help you, using the link or the buttons provided.
Helpful Links
Finally, here are some helpful links offering further information, insights and potential solutions.
Plus, of course, the links to download your FREE strategy formulation worksheet and your FREE GOAL template.
Thanks for watching this video and we hope you’ll check out the next one in the series.
Wikipedia Page: Strategic Management
See also the links from this page giving numerous examples of useful insights and resources.
Investopedia Page: Strategic Management
Harvard Business Review’s 10 Must Reads On Strategy
(including my all-time favourite article “What Is Strategy?” by Michael E. Porter)
Download your FREE Strategy Formulation Worksheet
Download your FREE GOAL Template
Tom’s Planner: Gantt Chart Maker
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How to Build A Scalable Business Part 4: Strengthen Your Operating System
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