How to write a strategic plan that seriously improves your business performance

Experience. Excellence.

StrategyDictionary definitions of ‘strategy’ include:

• Aplanofactiondefinedtoachievealong-termoroverallaim

• Amethodorplanchosentobringaboutadesiredfuturestate, suchasachievementofagoalorsolutiontoaproblem

• Theartandscienceofplanningandmarshallingresourcesfor theirmostefficientandeffectiveuse

Defining StrategyStrategy is one of the business topics that is most written about and one which is interpreted the most diversely. Strategic planning is not just about aspiration, ambition, leadership, and visioning; it is about articulating the challenges that face your organisation and encapsulating how you are going to address those challenges. The outcomes that you are looking for must be expressed in a set of measurable objectives that define what you are trying to achieve, along with an explanation as to why you are trying to achieve them and, most importantly, how you intend to achieve them. The most significant aspect of strategy is that it should articulate how your objectives will be accomplished and not just a definition of what they are.

Strategyisnotaboutwoollyvision,missionandvaluestatements,itisaboutidentifyingsignificantchallengesthatanorganisationfaces(assessment),defininganoverallapproachfordealingwiththosechallenges(approach)anddesigningacoherentsetofactionsthatimplementtheapproach(action).

Theimportantpointhereisthatstrategymustcontainactionthatiscoherentandcoordinatedandwhichisfocusedonovercomingtheobstaclesandaddressingthechallenges.

Assessment–gaining,byinvestigation,anin-depthunderstandingofthenatureandcircumstancesofspecificchallengesfacedbytheorganisation.

Assessmentisaboutdefiningthenatureofthechallengesandidentifyingthekeyobstaclesthatneedtobeovercomeinordertoaddressthem.

Challengesareeither;external(dealingwiththreatstotheorganisationormaximisingopportunitiesfortheorganisation)orinternal(addressingweaknessesorleveragingstrengthswithintheorganisation).Theyareoftenassociatedwithexternalcompetitionorinternalchange.

Approach–theoverallapproachfordealingwiththechallengesbyovercomingtheassociatedobstaclesidentifiedintheassessment.Commonapproachesarebasedonleveraginginternalstrengthsandminimisingweaknessesinordertomaximiseexternalopportunitiesandmitigateexternalthreats.

Theapproachsetsoutaspecificdirectionwithoutdefiningexactlywhatactionsmustbeundertaken.Itreducescomplexityandprovidesclarityaboutthesituationenablingaplanofactiontobedevelopedthatcoordinatesandfocusesresourcesandefforteffectively.

Action–acoordinatedsetofactionsthataredesignedtoimplementtheapproach.

Theassessment,approachandactionplanenableasetofclearBusinessObjectivestobeidentifiedthatdefineasuccessfulBusinessOutcomei.e.thattheobstacleshavebeenovercomeandthechallengesmet.

Itisimportantthat,throughthedefinitionofBusinessOutcomes,BusinessObjectivesare:

• Achievable-theBusinessOutcomesmustbe realisticandachievable.

• Quantified-youmustbeabletomeasure progresstowardsachievingthem.This quantificationalsodefinesthevaluethatthe BusinessObjectiveiscontributingtothebusiness.

• Prioritised-itisimportanttounderstand thepriorityrequiredtoachievedifferent BusinessOutcomesinordertoenableyouto focusyourresourcesappropriately.

• Owned-itmustbeclearwhoisaccountable andwhoisresponsiblefortheachievementof eachBusinessOutcome.

• Scheduled-theBusinessOutcomemust beplannedsothatyouknowwhenitisduetobe achieved.

• Cohesive-itmustbeclearhowallBusiness Outcomesrelatetoeachotheri.e.howthey contributetothenextBusinessOutcome.This createsanOutcomesRealisationMapthat enablesyoutomanagetherealisationofthe BusinessOutcomes.

• Measured-havingquantifiedtheBusiness Outcomesitisimportantthatyoumeasure progresstowardstheirachievement.

A good strategy is realistic, achievable, timely and delivers the desired Business Objectives.

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SiriusPartnershasadoptedaninnovativestrategicandoperationalplanningmodelcalledthe“Business Life-System”(copyright©2014PhilipTrickey).Thissectionofthereportoffersabriefoverviewofthe Business Life-Systemandanindicationofhowitcantotallytransformtheperformanceofyourbusiness.

The Business Life-System has three aspects to it:

1. Environment-theExternalEnvironment. Anassessmentoftheopportunitiesfor, andthreatsagainstthebusiness.

2. Nurture-theInternalEnvironment. Anassessmentofthestrengthsand weaknesseswithinthebusiness.

3. Nature-theBusinessDNA. Thearchitectureofwhatthebusinessis tryingtoachieveexpressedasacohesiveset ofBusinessObjectivesandBusinessOutcomes.

A model for strategic planning Business Life-System

These three aspects manifest themselves as six layers within the business model:

1. External Business Drivers-threatsandopportunitiesexternaltotheorganisationthatcanhavean impactonthescope,prioritisationandfocusofthebusiness.

2. Internal Value Drivers-strengthsandweaknesseswithintheorganisationthatmustbemanagedin ordertomaximisetheopportunitiesandminimisethethreatsintheexternalenvironment.

3. Business Objectives-anarticulationofwhattheorganisationistryingtoaccomplishasasetof BusinessObjectives.

4. Business Outcomes-aquantificationofthebusinessvalueorbenefitsattributabletotheBusiness Objectivesthatmakesthemquantifiable,measurable,timelyandspecific.

5. Enablers -theassets,processes,deliverables,capabilityandcapacityinwhichtheorganisationinvests inordertodelivertheBusinessOutcomes.

6. Delivery Management Vehicles (DMV) -governance,structures,processesandmethodologiesthat ensureeffectiveandmanageddeliveryofEnablersandBusinessOutcomes.DMVsincludePortfolios, Programmes,ProjectsandWorkstreams.

The six layered business model is depicted in this diagram

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Corporation Harmony Openness Innovation Capability Environment Success

Leadership Collaboration Transparent Creativity People Environmentallyfriendly

Reputation

Strategy Customerfocus Accountable Continuousimprovement

Process Economical Differentiation

Governance Partnership working

Fairandhonest

Proactive Assets Sustainable Brandstrength

Finance Communications Adaptable Technology Responsive Charitable Evaluation

ExternalBusinessDriversarethreatsandopportunitiesintheexternalenvironment(i.e.externaltotheorganisation)thatcouldhaveeitherapositiveornegativeimpactonthebusiness.OrganisationsoftenusetoolssuchasPEST,STEEPandPESTELanalyses(Political,Economic,Sociological,Technological,EnvironmentalandLegal)inordertoidentifythesethreatsandopportunities.Astheseexternaldynamicsarethesinglemostimportantfactorsthatcanimpactthebusiness,amorethoroughassessmentisrecommended(referredtointheBusinessLife-SystemasPERSPECTIVE)asfollows:

External Business Drivers (PERSPECTIVE)

Internal Value Drivers

InternalValueDriversaretheperceivedstrengthsandweaknesseswithintheorganisationandarewhatconstitutestheculturewithinthebusiness.Anassessmentofthiscapabilityorinabilitycanbeundertakenacrossmultipleaspectsofthebusiness(referredtointheBusinessLife-SystemasCHOICES)asfollows:

Business Drivers

This diagram demonstrates the relationship between a SWOT analysis, capability assessment and environment assessment

• Politics

• Economics

• Regulation

• Social

• People

• Ecology

• Competition

• Technology

• Innovation

• Vogue

• Ethics

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BusinessObjectivesareanarticulationofwhattheorganisationistryingtoaccomplish.TheyaredrivenbytheExternalBusinessDriversandtheInternalValueDriversandarebestcategorisedintofourPerspectives ofabalancedscorecard:

1. Customer-whoarethecustomersofthebusinessnowandinthefuture?

2. Proposition-whatproductsandservicesarebeingofferedbythebusinesstothosecustomersnow andinthefuture?

3. Capability –whatassets,deliverables,people,partnersandprocessesarerequiredtodeliverthe propositions?

4. Finance-howwillthecapabilitiesbefunded(revenueandinvestment)?

EachoftheseBusinessPerspectivesisfurtherbrokendowntospecificBusinessObjectivesthatdemonstrateprogress,developmentanddeliveryacrossthebalancedscorecard.

Business Outcomes

BusinessOutcomesareaquantificationofthebusinessvalue,benefitsandtargetsattributabletotheBusinessObjectivesthatmakethemquantifiable,measurable,timelyandspecific.BusinessOutcomesmightbein-yearorlongerterm(3to5yearsormore).Forexample,aBusinessObjectivemightbetoimprovecustomersatisfaction;anassociatedBusinessOutcomemightbeanimprovementintheannualcustomersatisfactionresultsof10%peryearforfiveyears.KeyBusinessOutcomesareoftenreferredtoasKeyPerformanceIndicators(KPIs)andcanbeusedinanexecutivedashboardtomonitortheprogressofthebusinesstowardsachievingitsstrategy.

Enablers

Enablersaretheassets,processes,deliverables,

capabilityandcapacityinwhichtheorganisation

investsinordertodelivertheBusinessOutcomes.While

BusinessOutcomesarticulateandquantifythebusinessvalue,Enablers

articulateandquantifythebusinesscosts.Enablerscanbetangibleassets,documents,processes,estate,ITequipmentandsystemsormilestonesthatmarkthedeliveryofoneormoreEnablers.AnUltimateEnableristhefinalEnabler (ormultipleEnablers)thathastobedeliveredinorderforanassociatedBusinessOutcometobeachieved.

Business Objectives

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Whenanexternalthreatalignswithaninternalweaknesscreatingapotentialnegativeimpactonthebusinessthenthiscreatesarisktothebusiness.Suchrisksmustbequantifiedintermsoftheirpotentialimpactonthebusinessandthelikelihoodofthemoccurring.Mitigatingactionscanthenbeidentifiedandcarriedoutinordertoreduce,overcomeoreradicatethenegativeimpactonthebusiness.

Whenanexternalopportunityalignswithaninternalstrengthcreatingapotentialpositiveimpactonthebusinessthenthiscreatesaprospectforthebusiness.Suchprospectscanbequantifiedintermsoftheirpotentialimpactonthebusinessandthelikelihoodofthemoccurring.Managingactionscanthenbeidentifiedandcarriedoutinordertomaximisethepositiveimpactonthebusiness.

Risk and Prospect Management

The relationship between the SWOT analysis, risks and prospects is depicted in this diagram:

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Strategyisaboutidentifyingkeychallengesandhowtoovercometheassociatedobstaclesinordertomeetthosechallengesthroughasetofcoherentactions.Itisthereforecrucialthattheachievementofthoseactionsandassociatedoutcomesaremanagedeffectively.

Anythingthatneedstobedeliveredorachievedwithinabusiness(whetherseenasbusiness-as-usual,businesschangeprogrammes,deliveryprojects,benefitsrealisationprojectsorinnovationinitiatives)shouldhaveacontrollingstructureorvehiclemanagingit.Theseincludegovernance,methodologies,processes,resourceallocation/managementandriskmanagement.

In fact, managing delivery has ten main aspects to it:

Delivering the Strategy

1. Outcome Definition-abreakdownand definitionofwhatisrequiredtobedeliveredin termsofOutcomes(benefitandvalue).

2. Work Breakdown Structure-abreakdown anddefinitionofwhatenablersneedtobedeliveredinordertoachievethoseOutcomes.

3. Activity-abreakdownanddefinitionofwhatactionandactivityisrequiredtobetakeninordertodelivertheEnablers.

4. Plan-aplanofwhenthatactivitywilltake placeandthedependenciesbetweentheactivities,withassociatedachievementmilestones.

5. Resource-anassessmentandongoingmanagementoftheresourcesrequiredtoundertaketheactivityanddelivertheplan.Thisshouldincludeallocationofclearresponsibilityandaccountabilityfordelivery.

6. Finance-anassessmentandongoingmanagementofthebudget(capitalandrevenue)requiredtopayfortheresourcesandotherassetsrequired.

7. Stakeholder Engagement and Communication -regular,appropriateandtimelyengagementandcommunicationwiththedifferentstakeholdergroupsthatareaffectedby,orcontributetodelivery.

8. Risk Management-identificationoftherisksandassumptionsthatneedtobemitigatedandmanagedinordertomaximisethepotentialforsuccessfuldelivery.

9. Progress Reporting-regularreportingontheprogressofdeliverybothintermsofachievementsandexceptionstotheplan.

10. Lessons Learned-anassessmentoflessonslearnedattheendofdeliveryinordertorefineandimprovetheprocessforthefuture.

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If you want to develop a strategic plan that seriously improves your business performance then please get in touch on +44 (0) 7834 800416 or email info@siriuspartners.co.uk

www.siriuspartners.co.uk

Unlessstatedotherwise,copyrightinthisreport(includingcontentanddesign)isownedbySiriusPartnersLtd.Copyrightofthe“BusinessLife-System”andassociatedgraphicsanddesignsisownedbyPhilipJohnTrickeyofCorexLtd.

Youmaynotreproduce,adapt,modify,communicatetothepublic,reproduceorotherwiseuseanypartofthisreport(inparticularforcommercialpurposes)exceptwiththeexpresswrittenpermissionfromSiriusPartnersLtd.

TheBusiness Life-Systemreferstothesecontrollingstructuresas‘DeliveryManagementVehicles’(DMVs)andtheycanbeportfolios,programmes,projects,workstreams,initiatives,departmentsetc.ThescopeofaDMVissetoutasarangeofEnablersand/orBusinessOutcomesasindicatedbythefollowingdiagram:

ItisacombinationoftheBusinessObjectives,BusinessOutcomesandEnablersthatconstitutetheBusinessCaseassociatedwiththeDMV-adefinitionofwhatitwilldeliverintermsofvalue,howmuchitwillcost,thenetreturnontheinvestmentandhowlongitwilltake.

Summary

Strategyisanassessmentofbusinesschallengesandthedefinitionofanapproachtoovercometheobstaclesinordertomeetthosechallenges.Itrequiresaclearsetofcohesiveandcoordinatedactionstobeidentified,managedanddelivered.Astructuredapproachtostrategicplanningensuresclarity,consistencyandcollaboration.Itenablestheorganisationtofocusitsresourcesappropriatelyonresolvingitsbiggestchallenges,seriouslyimprovingtheperformanceofthebusiness.

Programme and Project Management