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Discover the Five Essential Elements of Strategy or the building blocks you can use to break a strategy down to understandable, meaningful and down-to-earth actionable and executable items.
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STRATEGYEssential Elements of5
A deck prepared by @ljuti. For more, follow @StrategyMasters
Organizational strategies often get stuck to a very high level and vague concepts
You can break them down to understandable, down-to-earth actionable pieces with the
five essential elements of strategy
the elements OBJECTIVE NECESSARY CONDITION SUCCESS METRIC TARGET VALUE MEANS
OBJECTIVE 1
a defined objective that an organization must achieve to
ultimately reach its vision and strategic goals
Strategic OBJECTIVE
DEFINITION
Saad Faruque, Flickr (CC)
Revenues increase.
EXAMPLE
EXAMPLE #1 : OBJECTIVE
Customers can buy solutionsderived from R&D programresults.
EXAMPLE #2 : OBJECTIVE
EXAMPLE
objectives can be categorized into different perspectives
CUSTOMER MARKET OFFERING CAPABILITIES
PEOPLE DEVELOPMENT
FINANCIAL SHAREHOLDER
… and more
Altug Karakoc, Flickr (CC)
NECESSARY CONDITION2
a discrete element whose presence is required for
success
NECESSARY CONDITION
DEFINITION
also known as critical success factors (csf)
Revenues are maximized fromexisting customers.
EXAMPLE #1 : NECESSARY CONDITION
EXAMPLE
R&D program is complete.EXAMPLE #2 : NECESSARY CONDITION
Solutions can be developedfrom R&D program results.
AND/OR
EXAMPLE
EXTERNAL Imposed from outside the organization.
“Compliance with environmental laws.”
INTERNAL Organization imposes upon itself.
“Excellent people and technology.”
necessary conditions can be either external or internal
Quasic, Flickr (CC)Bosc d’Anjou, Flickr (CC)
SUCCESS METRIC3
a defined way of measuring and demonstrating the presence of
a Necessary Condition
SUCCESS METRIC
DEFINITION
Renewal rate of existingcustomer contracts
EXAMPLE #1 : SUCCESS METRIC
EXAMPLE
Number of new solutionblueprints or prototypesbased on R&D program results
EXAMPLE #2 : SUCCESS METRIC
EXAMPLE
OBJECTIVE data-driven
COMPOSITE combines multiplesources
DELEGATED someone elsemeasures it
SELF-ASSESSMENT your own opinion
types of metrics
4
Josep Ma Rosell, Flickr (CC)
TARGET VALUE4
the desired value on a Success Metric that demonstrates a
Necessary Conditionhas been attained
TARGET VALUE
DEFINITION
Renewal rate is 95% by theend of the year.
EXAMPLE #1 : TARGET VALUE
EXAMPLE
One solution prototype basedon R&D program results
EXAMPLE #2 : TARGET VALUE
EXAMPLE
Emilio Kûffer, Flickr (CC)
HITTING THE TARGET VALUE MEANS YOU’VE ATTAINED
THE NECESSARY CONDITION TO REACH THE OBJECTIVE
MEANS 5
a set of activities that will “move the needle” of Success Metric towards Target Value
MEANS
DEFINITION
Chart contracts up for renewal.Determine customer satisfaction.Ensure there are no active complaintsbefore renewal.…
EXAMPLE #1 : MEANS
EXAMPLE
Create a program to develop ideas intoblueprints and prototypes.Ensure appropriate resources andcapabilities for prototyping.Install rewarding system for ideas.…
EXAMPLE #2 : MEANS
EXAMPLE
MEANS CAN BE EITHER
TEMPORARY Projects, one-off tasks, temporary practices, etc.
“Business Development Project in Malaysia.”
PERMANENT Culture, practices, ways of work, habits, etc.
“Continuous evaluation of customer engagements.”
Chris Lott, Flickr (CC)
SynthesisPutting it all together∞
LET’S PUT THE ELEMENTS TOGETHER IN ATTEMPT
TO SEE THE WHOLE
Lawrence Rayner, Flickr (CC)
the process is simple and straight-forward
begin finish
SET OR PICK AN OBJECTIVE
DETERMINE NECESSARY
CONDITIONS
DEVISE A SUCCESS METRIC
DEFINETARGETVALUE
FIGURE OUT MEANS TO MOVE THE
NEEDLE
Marc Wathieu, Flickr (CC)
OBJECTIVE
Revenues increase.
REVENUES INCREASE
NECESSARY CONDITION
NECESSARY CONDITION
NECESSARY CONDITION
Revenues are maximized from existing customers.
New customers are acquired and secured.
Highest gross margins from sales are realized.
OBJECTIVE
MAX EXISTING
NECESSARY CONDITION
NECESSARY CONDITION
SUCCESS METRIC
TARGET VALUE
Renewal rate of existing customer contracts.
Renewal rate is 95% by the end of the year.
OBJECTIVE
NECESSARY CONDITION
NECESSARY CONDITION
RENEWAL RATE 95%
MEAN MEAN MEAN
NECESSARY CONDITION
Chart contracts up for renewal.
Determine customer satisfaction.
Ensure no active complaints before renewal.
NOW RINSE AND REPEAT.(YOU’LL HAVE TO DO IT ONLY ABOUT A HUNDRED TIMES)
tripleigrek, Flickr (CC)
THE GAME IS EASY TO PLAY.
COMING UP WITH THE RIGHT IDEAS IS THE HARD PART.
Cary Bass-Deschenes, Flickr (CC)
BUT EVENTUALLY YOU’LL HAVE IT ALL FIGURED OUT
Son of Groucho, Flickr (CC)
NOW GO OUT THERE AND GIT ‘ER DONE!
Sergey Galyonkin, Flickr (CC)
This deck was prepared by @ljuti
THANKS!
For more on strategy, follow @StrategyMasters