Turn strategy into action more quickly and effectively
Turn strategy into action more quickly and effectively
Implementing strategy often takes too long and costs more than expected. Turn enterprise strategy into functional initiatives with a succinct plan you can easily communicate to stakeholders.
Use this framework to:
Especially in times of disruption, it is key to understand what strategic planning is and does, what assumptions you need and how to leverage the value of adaptive strategy and scenario planning.
Strategy creates a common understanding of what an organisation wants to achieve and what it needs to do to meet its goals. Strategic plans bridge the gap from overall direction to specific projects and day-to-day actions that ultimately execute the strategy. Job No. 1 is to know the difference between strategy and strategic plans—and why it matters.
If you are responsible for functional strategy, such as IT, create strategic frameworks focussed only on what is material—critical assumptions, relevant metrics and the key initiatives your function needs to contribute effectively to organisational goals, even as those goals shift.
It is critical to scan and respond to trends and disruptions that could impact your strategy and strategic plans—and change your strategic assumptions. Strategic planning cycles should incorporate some mechanism to vet assumptions for relevance (also see ‘Scenario Planning’).
Ignoring or devaluing trends and disruptions can leave critical gaps in both your strategic assumptions and your strategic planning process, because you may be overlooking both threats and opportunities for your value proposition and competitive positioning.
One Gartner survey found that only 38% of organisations have a formal process for this type of trend spotting. Gartner scopes the seven key areas of disruptive change as a ‘TPESTRE’ of interconnected trend areas (see figure).
Executives across functions and teams can use the TPESTRE construct to identify key trends at any time—from augmented human experience to purpose-driven organisations and digitally enabled sustainability—and analyse their impact. From there, they can build strategic assumptions around the trends as they begin to map what actions might be needed in terms of business models, people/capabilities, IT systems and resources.
After sudden humanitarian or geopolitical disruptions like the COVID-19 pandemic or Russia’s invasion of Ukraine, a framework like TPESTRE can help you identify and monitor a range of risks that may affect your enterprise or function and you may need to include in scenario planning.
Scenario planning enables executives and their teams to explore and evaluate plausible alternative futures to make strategic plans more robust and resilient. Pandemic-related disruption and volatility showed the importance of leveraging a range of scenarios to reset business strategy and strategic plans.
Commonly used by strategists at the organisational level, scenario planning at the functional level is just as valuable. Many functional leaders have little experience with strategic scenario planning, even though they may regularly work with their CFO to build budget and forecast scenarios. Those who can learn and apply scenario planning in strategic planning can help their organisation navigate volatile and dynamic conditions more effectively, especially in areas like supply chain, where disruption remains high.
Exploring scenarios enables you to determine suitable action plans or strategies for different possible futures. It reveals how to react to a specific future and which set of actions would make sense no matter what conditions ultimately unfold.
For leaders of functional teams, developing scenarios and their underlying assumptions is in itself a useful exercise to corroborate or challenge strategies and keep them current.
The objective of scenario planning is to secure the best immediate outcome while preparing suitable alternative action plans, depending on how a situation unfolds. Proactively agreeing on both near-term operational decisions and long-term strategic plans will reduce the time it takes you to respond to emerging risks and opportunities. This can help your function pre-empt, rather than reactively control for, the negative effects of a major event or disruption.
In an increasingly volatile and uncertain world, strategy can rapidly become out of date. To address this challenge, strategic planning must be adaptive. The faster the rate of change in operating conditions and the more disruptions you need to integrate into long-term strategy, the more adaptive your strategy models must be.
An adaptive strategy approach is what ensures your organisation can spot new opportunities earlier and respond more quickly than your competitors, making you most likely to succeed in a dynamic digital world.
A truly adaptive strategy approach is consistent with four core practices (see figure) designed to move the enterprise from a rigid, top-down, calendar-based process to a more event-driven strategy approach. Functional strategy can incorporate the same principles. While a truly adaptive approach will be based on all four core practices, functional leaders can initially focus on the practices that address their immediate strategy challenges.
Rather than requiring perfect or complete information to execute, adaptive strategy uses available information to identify immediate actions required for an enterprise or function to be successful. These actions may range from focussing on high-priority areas to making foundational investments or conducting experiments to test ideas. You can use insights from these actions, along with any new information and analysis, to identify your next set of actions.
Adaptive strategy requires you to review strategy whenever new (and relevant) information becomes available, so it is important to continually scan the business context to identify changes and review—and, where necessary, adjust—strategy in response to changes. (Also see ‘Strategic Assumptions’.)
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“Strategy” creates a common understanding of what the enterprise wants to achieve and what it needs to do to achieve it. Strategic plans bridge the gap from that overall direction to the specific projects and day-to-day actions that ultimately execute the strategy.
Strategic planning starts with setting strategy at the enterprise level, but that strategy must then be turned into action. The three levels of strategic planning typically refer to corporate vs. business unit and functional. The four types of plans are typically strategic, operational, tactical and contingency.
An effective strategic plan helps leaders improve the focus on, and responsiveness to, planning activities critical to achieving their long-term strategy. Leaders responsible for functional strategy can use strategic frameworks to focus their teams on what’s most material.
To build a successful strategic plan with a consistent and sequential process, functional leaders should:
The key elements of a successful strategic plan include:
Strategic planning “systems” refer to the tools used to document strategic plans. Gartner urges organizations not to focus on strategy in terms of the document they’re creating, but instead focus on turning strategy into an easily communicated action plan.
The strategic action plan is a formal document that serves as the primary source of information for how objectives will be executed, monitored, controlled and closed. Many organizations also deploy an associated but separate “action plan” for achieving the operating model.
Measures are observable outcomes that allow organizations to evaluate the efficacy of their action plans. Metrics quantify those observed changes to enable an organization to concretely quantify its progress and stay aligned to its chosen measures.