Peter Crow
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Purpose before strategy

13/4/2014

2 Comments

 
One of the big temptations in the strategy development process is to jump into 'answer' mode too early. Jumping quickly to conclusions is a real and understandable temptation. We live in a high-paced world and we want answers. We want plans to achieve our goals—the sooner the better. 

Many companies start the strategic planning process by jumping to the determination of goal (what do we want to achieve?) before leaping head-long into the question of how the goal will be achieved (what is our strategy? or what is our plan?). Sometimes, this process is informed by an environmental scan. Generally, the strategies that emerge from such processes are ill-conceived and readily defeated. I've lost count of the number so-called strategic plans that follow this pattern.

The crucial element that is often missing from the strategy development process is purpose: an answer to the 'why' question. Spending time with shareholders (or, their representatives at least), with customers and possibly with a wider group of stakeholders, to work out why the organisation exists is time well spent. A drug company needs to know it exists to defeat cancer (for example) long before any strategies to develop medications or build grand marketing plans are considered. People get onboard with causes not things. Imagine how different things might have been if Martin Luther King had uttered "I have a plan" in 1963.

'Why' needs to come before 'what', in business and in research. Owners, boards and trustees of not-for-profit agencies need to own the 'why' question and doggedly pursue a response. To ignore this maxim is to simply do stuff without due reason or cause—and that's hardly conducive to the building of a sustainable business or to conducting effective research. 
2 Comments
Alan Kennedy link
26/4/2014 03:09:23

Hello Peter

Your point on purpose is well made. I understand it and have no argument with it. My précis of your post: Well informed decision-making on a company's future must be undertaken first before any decisions can be made on strategy.

Where you and I converge is that I am trying to go a step further and to describe the means to reach that informed decision on "purpose" or "vision"

I would love to see the "purpose" discussion, as you call it, founded on a deep understanding of the structure of current strategy.

I do not see this happening because none of the processes I have seen take into consideration that a company already has an existing strategy system in place; namely, The Alpha Strategies, as I call it in my book.

I think no decision should be made on purpose or vision until there is consensus by the decision-makers, typically the board and executive management, on descriptions for each of the 8 strategies of the current strategy system and on the current configuration of those strategies into Alpha, Influencers, and Enablers.

Understanding current strategy and its configuration enables accurate identification of the external factors truly impacting company performance and, more importantly, the priority in importance of those factors.

At this point, the decision-makers can "see" the choices they have both in terms of focus on specific strategies in the strategy system and on the appropriateness of the current dominant strategy and system configuration. They are now able to make an informed decision on what strategies need changing, either in terms of position in the system or change in choices of action within those strategies.

Looked at from this perspective, "vision" can now be framed with confidence because it will reflect the outcome from long term pursuit of chosen dominant strategy.

For example, Stantec Consulting's vision is "to be in the top 10 global design firms". This is consistent with its Alpha being the growth strategy.

I was troubled for many years because a nonprofit social housing agency here in Toronto had as its vision; "to be the largest social housing agency in North America". That vision was clearly inconsistent with the mandate assigned to it by the City of Toronto - which was to provide social housing. This mandate clearly identifies the Service Delivery strategy as the Alpha. Happily, a new board quickly changed the old vision to this: "to be a landlord of excellence".

We must find a way to get into a more interactive discussion! Perhaps we should set up a Skype or Facetime session.

Thanks for letting me spurple all over your post page!

Cheers
Alan

Reply
Peter Crow
26/4/2014 03:21:22

Thank you Alan. You've added something quite important, which I'd like to take up on a Skype or Facetime call, as you suggest. I'll send you an email separately to suggest something.

Reply



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