In a world of complexity and change, what drives your company’s strategic decisions? The innovations of competitors? The buying trends of customers? The economic climate?
What is the best way to leverage your people and your culture? What innovative ideas should you take risks with? What market segments should you enter, and why? How will you properly measure and evaluate performance? How will you respond to surprises?
An effective strategy is built on the answers to these questions. With the right thinking, the right processes and the right tools, you will get those answers.
Right Thinking, Right Processes, Right Tools, Right Answers
At its most basic, strategic planning is the hard thinking your company does so that your team has the right instincts when the action comes. Good intuition comes naturally to leaders who have thought things through rigorously. In a crisis, rightly informed intuition will trump the most masterful plan.
Nevertheless, plans are crucial: in a clear and structured way, they describe the thinking you’ve done and allow you to execute by it, monitor it, evaluate it and adjust it in order to stay on track, not with the plan, but with the plan’s objective. Your company’s strategy is the answer to this question: given who we are, and given the conditions in the marketplace and our industry, how can we create optimal value for our customers (and shareholders)?
In other words, you have to think deeply about:
- what matters most: professionally, creatively, morally, socially.
- your company’s identity: to clearly define its unique configuration of insights, culture, expertise, and resources. We call this your Strategic Centre™. It is the soul of your company, the core source of your competitive advantage and your greatest point of leverage as you seek to create value. Because no-one can replicate your soul.
- the marketplace: the experiences, needs and desires of your customers; the circumstances they face technologically, socio-culturally, politically; and what the rest of the industry is doing for them.
- the strategic difference you can make for your customers when you take each of these considerations fully into account.
Strategic planning is intellectually intensive. It is also relationally intensive. It is by people, for people — people who are in one way or another stakeholders, who have different levers they can pull to influence, positively or negatively, the health and direction of the company. A strategic planning process that successfully engages stakeholders will be:
- more intelligent, because input is sourced from all parts of the enterprise, and incorporates diverse perspective.
- more robust in terms of creative solutions and pathways to those solutions, for the same reason.
- owned deeply by the stakeholders, who have participated in creating it.
- executed by stakeholders who have enhanced loyalty to one another as a result of creating their future together.
A good process is also efficient and drives steadily towards the completion of a strong strategic plan. A stakeholder doesn’t have to be included in every single consideration or discussion: they just need to know that they made a relevant and constructive contribution to the conversation at the right point.
There are many good tools available for strategic planning. What matters most is how they are used. In Soul Systems we draw on a range of tools for strategic planning and change management processes, some proprietary and some external — but our confidence in them is because they are after the right answers to the right questions. We use, for example:
- The Soul Project™ : a suite of tools designed to achieve accurate analysis of the company (and what we call its soul, or in technical terms, its Strategic Centre™) and its environment and then determine how to create optimal value for the customer.
- Alex Osterwalder’s Business Model Canvas: for business model innovation and/or business model improvement. In particular this allows us to build business models that leverage your company’s Strategic Centre™.
- The Impact Chain™: our strategic planning tool allows us to build out a robust plan that properly lays out large-scale, long-term systemic transformation. It is accompanied by a Measurement and Evaluation framework to track progress during strategy execution. When a client is established in the use of a parallel system such as The Balanced Scorecard, we work with it.
- The Collaboration System™ is for use by strategic partnerships or in-house collaborations in order to effectively build high-impact solutions.
These tools are all customizable and adaptable. Not every company is in the throes of developing a major change strategy. Sometimes the pressing need is to effectively attend to a course correction or to rethink an existing business model. The principles and frameworks employed in these tools are useful in a variety of scenarios.
The thinking, processes and tools utilized in strategic planning need to lead to the right answers. Here’s how the right answers show up in your strategy:
- Your strategy explains your assumptions and logic. Its goals are an expression of what you believe matters most and the plan to achieve those goals explain how you believe “what matters most” will come about (in other words, it is a statement of cause and effect).
- Your strategy clearly distinguishes between outputs, such as products and services, and outcomes. Outcomes are the behavioural changes generated by those products and services. This is what you are ultimately pursuing — change, and the greater the depth and the quality of that change, the greater the value and the longer lasting the value created by your company.
- Your strategy uses indicators that measure progress towards outcomes, and not just operational performance. Outcomes are measured in terms of behavioural change, the indicators for which are often qualitative. Operational performance can be assessed by, for example, profit and loss indicators, which are quantitative.
- Your strategy explains the contribution of multiple ordinary inputs – every resource and activity – to the ultimate, extraordinary outcome. It then demonstrates how these inputs accumulate over time as a succession of impacts, some sequential, some parallel; scheduled in terms of months, years and decades. We are understandably stimulated by creative marketing campaigns and breakthrough product launches, glittering career opportunities, ideation events chock full of clever delegates, slicker and smarter processes, and so on. But each of these is simply an input and an output, a means to an end, a single building block towards major transformation.
The more fuzzy your company’s ambition, the harder it will be to pursue it, the harder it will be to accurately align your resources and activities with it, the harder it will be to measure how close you are to achieving it, and the harder it will be to know if you need to change your assumptions about it. Good strategy consists of good answers in the form of: rationalized strategic objectives, clear cause-and-effect logic, relevant metrics, and differentiation between inputs and results.
To read articles by Jonathan Wilson specific to leadership and strategy, go here.
Incredible Insight. Keys in Our Hands.
Soul System’s strategic planning process was revolutionary for the company. They helped us define what makes us uniquely us and what we can do that no one else can. Certain keys were placed in our hands which are at the heart of our business thrust today.”
David Larsen, CEO, Africa Media Online
I consider Jonathan Wilson [CEO of Soul Systems] to be among the very best consultants I have worked with. He has an exceptional mind. He is a strategic thinker, he is able to process multiple data sets simultaneously and he is incredibly insightful when it comes to understanding people’s experiences. We recently worked together on a complex project. Jonathan had a clear grasp of the issues and was very creative in helping me structure an approach that would resolve root causes.
Adrian Davis, CEO, Whetstone Inc.