Making space for strategic thinking

Strategy and human nature don’t sit comfortably together. As humans we’re more focused upon short to medium term actions. This makes sense… we get a rapid hit reward from ‘the do’ rather than longer term planning, so it’s much more attractive… even if it’s not effective or real.

You can pick up most UK Govt reports from the last 15 years, and a lack of planning and strategy is up there as a key barrier to sustainable growth.

However, if we get it right, strategy planning can be relatively easy, straight forward and deliver actions for that all important ‘reward hit.’

Whilst COVID is probably the biggest business challenge we have faced, it’s also a golden opportunity to finally make space for strategic thinking.

So let’s break this down into stages.

1. What do you want to achieve from strategy?

What do you want your strategy process to achieve? Do you want to explore current and future opportunities? Do you want an in-depth root and branch review, or a light touch starting process ?

Whatever you come up with, a) it’s better than what you had before and b) it provides a clear direction for the work you want your team to do.

2) Build your team?

We need a mixture of skills in this team, which include practical customer and industry experience, technical/production, finance, marketing/sales. We also need to make space at the table for innovative thinking, someone that can spark questions and new ideas. 

Within the team, we’re also looking for other skills and attributes:

• the ability to challenge effectively
• planning skills
• team working

If you’re short on staff or time, then consider using suppliers, partners or buy the services in. This is exactly what NWAA member, Quality Bearings Online does. I am an integral part of their business, working with them on a monthly retainer (that originally started on a profit share basis). I work with their team on their annual plan, longer term strategy, and provide innovative ideas, challenge and support.

Co-Director of Quality Bearings Online comments “We have worked with external stakeholders such as Biskit, Bidnamic (Google Shopping Ads) and Warncliffe (Sage Software development and support) to name a couple. All of these offer us expertise at fantastic value for money and make internal development both individually and collectively so much quicker and more successful. These companies are treated like our partners and the working relationships we have continue to grow.”

3) Agree the information you need and the process to adopt

This is the bit that takes time, but can get us the biggest rewards. Consider buddying colleagues up, so they can support one another when they search for information.

So what information do we need?

• Customer data. Sales, opportunities. Plus qual data via phonecall/survey
• Prospect data. What are they saying? What are they buying? Any new plans?
• Current and future Market data. What’s being said about future demand or opportunities?
• Competitors. What are they doing? Do we know their plans? What are they saying in their comms?
• Suppliers /Partners what news do they have? What are they doing differently? Are we asking them?

We also need a process and timescales that the team can follow. 

• Review our objectives for the Strategy team
• Agree timescales: Information gathering, review, fill in missing gaps, review options, creation action plans, timescales and budgets for the chosen strategy
• Agree information needed, and how we might find it
• Review information, and identify any missing data gaps.
• Review and create options
• Timescales, budgets, KPIs, and team communications 

4) Prioritise, Plan and KPIs

This is where action can really happen. Making sense of the info gained, plus the talents of your team to refine the options down.

You’ve got all of this information, and lots of potential directions. It’s easy to be a rabbit in headlamps, or chase after every opportunity.

Our aim at this stage is to weigh up the information and look at our options, feasibility and timescales.

You’ve all seen these 3 models before, but let’s take a second look. We could use more, but for now let’s keep it simple.

Printing these boxes out, or writing onto flip charts is a great way to focus your team.

In my normal workshops, I simply write directly onto the charts, or use post it notes, so I can move them around as the discussion changes.

As you get each each person or team to present their information, you have the chance to make notes on that tool we all know, the SWOT analysis.

At the end of the presentations, you have a clear sense of your Strengths, Weaknesses, plus External Opportunities and Threats.

This then flows nicely into Ansoffs Grid or the GE Business Screen.

Ansoffs - Top Left) 

Let’s establish the current opportunities within our current market/client base.

How many clients are currently active? What is their forecast, project likelihood and margins?

What gap does this leave us with versus our budget?

How many more people are there in the same market? Who’s Hot, Warm or Cold in terms of prospects? What do we need to do, in order to win them over?

If the answer is “we can’t” and existing customer demand is flat, then subject to the timescales involved we’ve got to move into box B and C.

Ansoffs Top Right, what are our current customers buying, or what are their future plans? Do we have a capability in this area or advantages? What’s needed to supply this demand ? Do we need to collaborate?

Ansoffs Bottom Left, can we take our current products and services anywhere else to new markets ? Riskier, but it might be the only option we have. Are we talking different sectors, or different countries… or both. This approach will take time, so it’s best to raise this as early as possible.

If we’re considering anything new… new products, new sectors/countries, new clients… then we’ve got to ask ourselves the backstop question “why should companies choose us? What is our compelling offer?”

Finally, we’ve got Diversification. If we’ve exhausted possibilities in every other area… then this may well be our only option.

Now as a business, you may well undertake multiple strategies in each area, adjusting your timescales to ensure longer term sustainability. 

The second model I tend to like using is the GE Business Screen. It’s easy to use, and helps a team make clear decisions based upon the market opportunity and your core strengths.

However, you can also use your own criteria in a 4 box grid. You could map your options onto the grid, and select for your own criteria such as Investment required, time to deliver, profit margins etc. We often create multiple versions of these, and contrast different options.

Once you have your options in front of you, this is where the team can really use their skills to help select the most appropriate for your business. Using mixed skills reduces risk, increases options and also promotes buy-in.

As you select your options, you’re then able to start the process of budgeting, KPIs and timescales.

Don’t just focus on the lag measures, such as Profit and Turnover, look at the leading measures such as enquiries etc. These will help you identify whether you’re on track much earlier in the process.

Also, don’t forget about communication with your team and stakeholders, as you need them to come with you, and understand the role you want them to play.

5) Review

Now is the time to plan in a review period. We like working on monthly KPIs linked to the plan, with a sanity check in 6 months. 

So whilst this might be strategy light for some companies, what you’ve effectively done is create a model to introduce greater strategic thinking into your business.

You can then follow this structure and process in the coming year. Your team will be used to the process. It will be faster and more effective, and your team will build in confidence.

The only difference is… you’re also then reviewing your first year strategy plan. You can then get more inventive about the role of innovation, marketing development and positioning.

During your first year of strategy development though, it’s also a great opportunity to bring outside knowledge in. This could be from industry events, industry visits, CPD learning, external expertise. This keeps your thinking fresh, ideal for fast moving markets and the turbulence that comes with COVID.