Let’s say you’re getting together with other managers and employees to develop your organisation’s or unit’s strategy. No matter how much discussion and enthusiasm you bring to the task, you’re likely to emerge with a list that looks like this:..
Graham Kenny is the author of Crack Strategy’s Code (President Press, 2013) and Strategic Performance Measurement (President Press, 2014). In an article that caught our eye, he noted that many Strategic Planning sessions end up with lists that usually contain generic, non-specific goals such as:
- Superior operational outcomes through efficient work practices
- Becoming competitive in an existing market
- Increasing product sales to take market leadership
- Expanding into other regions
- Optimising ROI
- Developing a service delivery model that incorporates tactical projects
While a list such as this may receive general nods of approval, Kenny notes that it’s nothing more than a list of goals or objectives and not a strategy to achieve them. In his article, Kenny suggests following a few simple steps to help with the formulation of a successful strategy, specifically by adopting an external viewpoint.
The first step, says Kenny, is to identify which stakeholders you depend on for success:
This is key because every organisation is dependent on others for its success. It is important not to focus on a narrow set of key performance indicators and develop solutions, but as we have discussed in other articles, leaders and strategic plans need to look ahead and scan the horizon for opportunities and threats. Without the support of your key stakeholders your organisation will fail, so in order to reduce the risk of losing those key parties, you must first identify who they are and then set about satisfying them.
In fact, when John Mackey (co-founder of Whole Foods Market) was asked what made his organisation successful, he said that it was due to “Customers, employees, investors, suppliers” and so on. He goes on to say that, “management’s job is to make sure that we hire good people, that they are well trained, and that they flourish in the workplace, because when people are really happy in their jobs, they provide much higher degrees of service to the customers.”
Happy team members result in happy customers. Happy customers do more business with you. They become advocates for your enterprise, which results in happy investors. That is a win, win, win, win strategy. **
Kenny’s second step is to understand what your organisation wants from its stakeholders:
Because stakeholders are usually not identified during the strategic planning process, their needs are often overlooked. And when they are discussed, it is usually in terms of what your organisation does for them, rather than what they could be doing for you. It is important to think carefully about this step because what an organisation needs or wants from each of its key stakeholders can then be translated into objectives. For example; revenue growth will come from customers and clients, innovation and efficiency from employees, and quality goods and services at the right price will come from suppliers.
A common pitfall is that strategies are often created in isolation to objectives and targets. He believes that it’s important that objectives, targets and strategies are created in unison because they’re inextricably linked; so the strategic planning process must focus on establishing clear goals and targets for each stakeholder before an effective strategy can be developed.
The final step is to recognise what your stakeholders want or need from your organisation:
Kenny points out in his article that management teams often jump into problem-solving mode and make assumptions based on their own knowledge – assuming they know what’s best for their stakeholders. This can be dangerous and can lead to the development of products and services that nobody wants!
A key point of difference is that when you are articulating the things that stakeholders want (what Kenny calls “Strategic Factors”), you need to keep in mind that these are not the same as “Critical Success Factors”. The main difference is that Critical Success Factors are generated by the management team and Strategic Factors are generated by stakeholders. Given that you may not understand what the needs and wants are from a stakeholder’s perspective, it is perfectly acceptable to ask or interview stakeholders to get a clearer picture.
Kenny concludes that by having a good understanding of the external perspective, you can easily highlight the things that your organisation needs in order to be successful and achieve a true competitive advantage.
** For more on increasing the happiness of your employees, take a look at our insight titled, ‘Happiness: The neglected role of Job Design’.