There are two key aspects of strategy: formulation and execution. Both must work well for an organisation to reach its excellence however, weak formulation supported by good execution or opposite would be enough for average results at best, but with increased vulnerability and risk.
Although strategy formulation defines the meaning, business model and objectives for every business, in most cases it is not the main contributor to good or poor business results. Based on experience, it is the execution that draws more businesses into black or red rather than average strategy. Therefore I strongly recommend that you analyse your strategy execution practices first as you might get business problems solved at that stage. Even if that isn’t the case, conclusions from the strategy execution analysis about company’s capabilities would influence short to medium term strategy as planning for great outcomes without possessing essential capability would, pretty much, be a waste of time. Building capability takes time and money what should be addressed in your strategy formulation.
Our strategy analysis model adopted a phased approach to allow a client being always in a driver seat and making choices. Starting from the existing strategy definition, business results and numbers and proceeding with our on-line Strategy Execution Readiness Assessment and interviews with senior management, then digging deeper into business processes, practices and procedures, customers’ satisfaction, people’s culture and their readiness for change to conclude the analysis with a report about current strategy execution capability, change strategy and change plan which will lead to reaching the competitive level of capability within a particular business environment.
Only then, if necessary, we will proceed with a set of analyses which evaluate company’s current strategic position to its markets, competitors, customers and other stakeholders with the objective to evaluate the existing portfolio and strategy, and possibly draw a new one. We will facilitate a formulation process for a new strategy which will be based on our findings and your vision.
PHASE ONE – SCREENING FOR STRATEGIC WEAKNESS
We will start with the existing strategy documents – mission, vision and strategy formulation. After learning about your strategy objectives and goals we will proceed with your financial and management accounts – available reports for the past three to five years, depending on the date when the last formal strategy was adopted and look for trends and ratios to find out to what extent current strategy objectives have been materialised and identify weak business result areas. However, this won’t tell us about reasons for bad performance.
To better understand the impact of management practice to organisation we will use our Strategy Execution Readiness Assessment methodology and ask members of the senior and middle management to, via an on-line survey, rate company’s performance in the following areas of good strategy execution practice: execute-ability of objectives, management process, collaboration and performance culture, human capital readiness, information management, risk management, revenue generation and corporate social responsibility. The survey will pull together a comprehensive set of data enabling us to understand the gaps between current management capability and required capability which is necessary to reach company’s current strategic objectives and full potential. After identifying and quantifying those gaps the tool will give us an estimate of the change effort needed to bridge each gap.
In the final step of this phase we will interview senior managers, one on one, asking to comment and provide insights about bad performing areas and weak strategy execution practices.
Summing all this we will be able to compile a report with the following answers:
- Quantified performance trends by business result area with a highlight on weak areas and possible causes,
- Management perception of own strategy execution practices with quantified gaps that need to be bridged in order to reach required strategy execution capabilities linking to previously identified weak business result areas,
- Possible impact of current strategy formulation and strategy execution capability on business results.
In conclusion, we will advise you if and where further analysis would be necessary. The decision to proceed will rest on you.
PHASE TWO – 360 STRATEGY EXECUTION ANALYSIS
Strategy execution is demonstrated through company’s practices, processes, procedures and culture, particularly the extent of drive for performance and readiness for change. By following this path one can draw a detailed picture of company’s strategy execution capability.
The methodology consists of three analytic tools: (1) business process mapping from defined strategy objectives to outcomes, (2) customers satisfaction records analysis, and (3) on-line Human Capital Readiness Assessment.
When it comes to business process mapping, the variety of techniques including interviews with key employees, business systems and information flow tracking, document flow tracking, decision-making observations and mapping of processes and decision-making protocols are used.
We will use company own records regarding customer satisfaction such as surveys, customer complains, credit notes issued, own service records etc. In case of B2B company, we may send additional on-line survey to key clients.
Our Human Capital Readiness Assessment using an on-line questionnaire for employees measures organisational capacity in performance enablers and change enablers. These two sets of diagnostic criteria help us quantify results orientation and performance potential of human capital on one side and its readiness for change on the other.
Our report will uncover process weaknesses, poor practice and/or procedures that directly contribute to poor results in each business result area and estimate to what extent existing performance culture contributes to those results.
In the second part of our report, we will outline necessary change strategy and a change project program with a list of project key result areas which will lead to eliminating or minimising identified weaknesses and releasing full strategy execution potential of a company. At that stage we will calculate potential impactability of proposed changes to your bottom line and offer our help in change project management.
PHASE THREE – STRATEGY FORMULATION ANALYSIS
Strategy can neither be formulated nor adjusted to changing circumstances without a process of strategy analysis and evaluation. It is an attempt to look beyond the obvious facts regarding the short-term health of a business and appraise instead those more fundamental factors and trends that govern success in the chosen field of endeavor.
Strategic analysis is concerned with understanding the relationship between the different forces affecting the organisation. It may be that the environment exercises severe constrains or yields potential opportunities, and thus needs to be understood. It may be that the firm has particular competences on which it can build, or that it needs to develop these. It may be that the expectations and objectives of stakeholders who influence the organization or the culture of the organization play an important role in determining the strategy.
Various tools or their combination will be utilized during this phase depending on findings during our screening. They are, but not limited to, SWOT (strengths, weaknesses, opportunities and threats) analysis, PEST (political, economic, social and technological) analysis, BCG (Boston Consulting Group) matrix and Porter’s diamond analysis coupled with marketing analysis, risk analysis and scenario planning.
Our report will give you alternative strategies, well supported with pro and contra arguments and identified risks.
PHASE FOUR – FORMULATION OF NEW STRATEGY
To formulate a business strategy is to decide on business model, markets, supply chain, resources and their capabilities to match these with the demands from your shareholders, community, environmentalists, government, and of course your target customers. In many ways strategic choice is the core of strategic management. It is concerned with decisions about an organisation’s future and the way in which it needs to respond to many pressures and influences identified in strategy formulation analysis. In turn, the consideration of future strategies must be mindful of the realities of strategy execution, which can be a significant constraint on strategic choice.
Following the Blue Ocean principles we will reconstruct your market boundaries focusing on big picture and trying to reach beyond existing demand. That will include looking alternative industries and strategic groups, across the chain of buyers and across complimentary products and services.
Based on our findings from strategy formulation analysis we will prepare and organise a strategy workshop for senior management and facilitate a decision process of making strategic choices. The actual workshop can last one to two days. It should be a relaxed event to promote brain activity and team building. If time allows, it is wise to engage a team building specialist.
The outcome will be a clearly defined and widely supported strategy by senior management. It will be based on viable strategy execution capability, articulated via specific objectives and implementation period, and championed by individuals among the top team.
If you need to assess your company’s strategy and/or strategy execution readiness contact firstname.lastname@example.org for a confidential discussion. Project assignments available in Africa, Middle East and SEE.