Why framing the strategy process is
one of six CEO best practices
By Pål Wæhle
January 2015
During 2014 I have been 25 years in consulting. Some people say I must have learnt a lot working with
top executives on their most pressing issues. That is true. Some of what I have learnt comes from working
with them one on one, some from engaging them in surveys understanding their beliefs, their experience
and how they resonate. I will share some of what I have learnt with you in a series of posts.
One of my former bosses, once told me that "Although
most people tell you to learn by others failures, it’s so
much more important learning from what they did
right. There are so many ways to get things wrong and
so few ways to get things right". So let us take a deep
dive in best practices and not spend time on avoiding
how to fail.
My conclusion, learning from the CEOs, is that the best
practices can be divided into 6 tasks they undertake:
1.
2.
In my last post I explained why lists about why strategies
fail actually often fail: (“Why all lists about why
strategies fail, eh – fail”)
It is based on the root causes identified in Bene Agere’s
CEO survey from last year. In this post I plan to take my
old boss’s advice - I will take the best practices about
how to actually get the strategy process to work, after
all, 60 CEOs with an average of 20-30 years in executive
positions must be worth listening to.
3.
4.
Before you begin reading, find a calm place, or copy and
save it for later. This post will require you to think slow
rather than fast. It is important that you have time to do
- and even dot down - your own reflections while
reading it.
5.
6.
CEOs are sensemakers for their organizations and one of
the most visible processes they undertake as such is the
process of setting direction and implementing strategic
change. The good news is that when you do a survey
with 60 CEOs one on one, including a report back
session with each of them with deep and insightful
reflections, for every a root cause to a challenge from
one CEO there is a best practice explained by another.
Framing – setting the scope and understanding the
magnitude of expected change efforts well before
starting
Staging – implementing the approach, scope and
involvement, forming the program for the strategy
process
Shaping Insight – Shaping the market view (“Two
words not in a CEO vocabulary”) setting long, mid
and short term ambitions and objectives,
operationalizing the strategy by understanding
implications, understanding how culture must
change, defining strategic initiatives, action plans
and timing
Executing – Performing the action plans by building
new assets, doing thorough implementation
planning and implementation
Governing – Monitoring relevant KPIs and progress,
give top down direction, do course corrections –
hang in there
Learning – Understanding what goes well and what
does not go well – course corrections for the next
process
I call these best practices tasks because they are not
necessarily sequential stages, but rather elements of an
iterative process.
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In this post, I will dig deep into the learning related to
the first task “1. Framing”, which is one of the most
important tasks a CEO do in the strategy process. It is a
stage many CEOs should be in just now. Regrettably, it is
the task that very few do, or are aware that they do. But
on the other hand, when done properly, it helps you
avoid many of the problems that were revealed in “Why
lists about why strategy fails – eh fail”.
Subtask 2: Do a back of the envelope market view
The second sub-task is about getting a feel for the
external change pressure. What does it tell you? You
need a market view, you can not say; "What we are
going to do; it depends" can you? (“Two words not in a
CEO vocabulary”) How challenging will it be for you? Do
we – for the most part – know, or do we need to let us
overwhelm by external pressures to drive change? It’s
about trying to anticipate significant competitor
movements or disruptive changes in the market, and
understand how it impacts the strategy process ahead
of you.
So, what is included in the best practice of Framing? Let
us divide framing to a set 5 of sub-tasks.
Subtask 1: Review previous strategy processes and be
truly honest in regards to what went well, and what
did not go well.
Typical insights could be that this time around you will
be
• spending less on analyses and defining the strategy
and more on execution, culture management and
implementation
• involving customers earlier and more thoroughly
• aware of what burning platform to communicate
As executives we require of, and often remind, our
people that they follow a “plan-do-review” kind of
approach on every project, but when it comes to the
process the we as CEOs own, very few do it. However,
actually doing it is clearly a best practice. In a way it can
be viewed upon as completing the learning task of the
overall best practice task list.
Subtask 3: Gauge what magnitude of change that you,
before even starting the process, would expect it to
deliver
So, define first what went well in the last process, in
order to ensure that these parts are included also in the
process ahead of you.
The key here is to develop hypotheses and not hobby
horses to cling to:
1. Little change
2. Massive change
Secondly, identify or reflect upon the things that did not
go well, drill down for root causes and understand what
you need to do differently.
If the change component is expected to be significant
(2.), you need to think thoroughly about how to involve
and move people. Remember, even if you call what is
facing the organization development, it will be
considered a challenging change for many in the
organization.
Typical insights could be that this time around you will
be:
• manage expectations with owners better
• involve people with deep insight in the business
model earlier
• find an approach that makes you hang in there all
the way through
• work more on making the messaging simple and
guiding
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How will the company culture receive this? Does the
culture need to develop to support the development?
Strategy as a plan has been criticized for being old
fashioned, the tactics used by USSR in developing long
term plans. It is worthless since you cannot plan what
competitors will do, nor knowing what disruptions you
will face. You can however plan costs and investments,
leaving you with a long term plan, and not really a
strategy.
Does it affect the Raison d’etre of the organization? Is
your vision and mission still intact? Are objectives and
commitments to stakeholders intact? May the values
be changed or could you expect to be challenged on the
business model itself?
Strategy as developing critical capabilities is often
called resource based strategies. It’s the idea that even
if you can’t predict what the future will hold with any
hope of accuracy, you are able to identify what
resources you need to develop regardless. We often
refer to these resources as assets and describe them by
the capabilities you need to have down the road that
you currently do not possess (Human, structural,
market, network, relational, Immaterial, etc.).
Is it likely that your organization can deliver this on its
own? And in the way the organization is currently
structured?
If you normally rely on cascading strategies through the
lines, you really need to consider whether this change
lies in the white spaces between your lines or within
your lines.
Typical insights could be that, this time around, you will
be
• putting more emphasis on change and culture
management
• clearer earlier on what guiding documents and
principles to review or leave out of scope
• clear on whether industry structure is part of the
downstream work and how to manage it, explicit or
not
• clear on whether reorganizing is part of the
downstream work and how to manage it, explicit or
not
• more alert to define strategic initiatives in areas
where expecting bottom up delivery is overly
optimistic
Emerging strategies, this view advocate that strategies
just happen, with customers and suppliers, with people
far out in the organization, rather than in board rooms.
The survey taught us that most executives in reality only
use the “Strategy as a plan”-approach, while our
experience is that you need to -and can - encompass all
three perspectives in one approach.
Typical insights could be that this time around you will
be:
• more aware that you need to think in a resource
based manner
• more open to the fact that the process is setting a
general direction under which there is an
expectation to innovate and shape emerging
strategic adaptions
Subtask 4: Decide methodological approach
You may be thinking – how can I really know in advance?
Or - is there more than one way? Basically, there are
three generic approaches to strategy deliverables these
days:
1.
2.
3.
Strategy as a plan
Strategy as developing critical capabilities (or
strategic policies)
Emerging strategies.
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Subtask 5: Decide broad time perspectives for the
upcoming process
Again you may be thinking – How can I know in
advance?
Let us start with the things we know:
• Most organizations rely on an annual wheel –
Strategies are “done” in spring, action plans are
“done” in early autumn, budgets in late autumn,
annual report in early winter, etc. By “done”, I mean
documented, but not executed. When execution or
implementation is done is much less clear!
• Very few changes are of such nature that a 12 month
period cycle is appropriate, many changes take much
longer, some take years. And indeed, some need to
take much shorter cycles.
• The value of time travel as a change management
technique – the further away, the more ambitious
we dare to be and the more challenging change we
are willing to accept.
With these “knowns” in mind, we clearly believe the
best practice is to work in several time perspectives One very long, one long and one short. You need to
think about what the three time perspectives are for
your company. As an example, one of our clients (a very
successful CEO, I might add) uses 10, 3 and 1 year
perspectives in all activities related to strategic thinking.
So what?
To conclude, there are a set of best practices that CEOs
use to get more out of their strategy process, “framing”
being one of the key best practices and the focus of this
post. By framing the strategy process you avoid
unexpected and unnecessary use of resources and time.
Therefore, what I ask you to consider thoroughly, is that
as a CEO, alone or together with a small core team, you
need to set aside some time and space – for slow
thinking – doing the very first iteration of what the
characteristics of this process will be.
Because only after you framed it properly, you can stage
it properly.
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