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SMART Strategic Objectives

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I spent today working with an organization that had three strategic objectives for the year. The first was directly related to making quantifiable progress towards the Vision of the organization. Great. The last was a quantifiable financial objective. Great.

The middle objective was “planned, implementable, strategic cooperation between the (operational units of the organization)”. Rats!

There were 8 people around the table. Every one of the 8 people said that they knew that this was one of the most important things that they needed to do. I asked them each to write down three characteristics of what “strategic cooperation” looked like to them. We had 8 different perspectives of this objective. Everyone agreed that they needed it, but everyone had a different view of what it was. 2 hours later I gave up, but still the only thing that they all agreed was that they needed it. I ditched the issue, circumvented trying to define it further and went straight for an application of what one person wanted out of it (whatever it was). Not very professional of me.

It turns out that it is a lot easier for a team of people to implement a strategic plan when the objectives in the plan are:

  • Specific
  • Measurable
  • Attainable
  • Realistic
  • Timely

Please help yourself and make strategic objectives SMART.

Rich Howarth’s view on Annual vs. Continuous Strategy Assessment

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Strategic leadership is a continuous approach to leadership. It is not annual strategic planning. In his book “Deep Dive” Rich Howarth describes the pitfalls of purely annual strategy reviews.

He puts it like this:

The inability to understand context is at the heart of numerous failures. There are three pitfalls of context to avoid if you are to be successful: (1) annual assessment, (2) relative versus absolute performance, and (3) prescription without diagnosis.

He then says the following about annual assessments:

From a business-planning perspective, context is often expressed as the “situational analysis.” The problem with this is that business planning generally happens once a year in most organizations, if that (nearly 40 percent of organizations have no formal business-planning process). This means that the majority of managers don’t have a solid understanding of the context of their business. This is like attempting to map out driving directions to a destination without knowing whence the car is leaving. It’s the “You Are Here” map at the museum minus the big red dot to indicate where you are. Niccolo Machiavelli wrote the following in The Prince: “I have often reflected that the causes of the successes or failures of men are dependent on their ability to suit their manner to the times.” And, as they say, “The times, they are a-changing”— usually more than once a year.

Howarth goes on to describe three tools that we can use to ensure that we remain connected to the context in which we are trying to set and implement a strategy. The first he describes as follows:

Strategy Tune-up Sessions Those who drive a car every day wouldn’t dream of going an entire year without a tune-up to check fluid levels, gauge tire pressure, change the oil, replace filters, etc. Nevertheless, while we regularly check our $ 35,000 automobiles, we wait a full year (and sometimes longer) to do a diagnostic check on our multimillion- or multibillion-dollar businesses. Now that makes sense! A simple solution is to conduct periodic (weekly, monthly, or quarterly) strategy tune-ups to check on the context of the business. The focus of these sessions isn’t to arrive at new conclusions; rather, it’s to openly discuss the four areas that constitute the context of the business: market, customers, competitors, and the company. The goal is to find changes in the context of the business and use the resulting insights to leverage opportunities and to blunt threats in a timely manner. Honda has used this technique (called “Nimawashi sessions” in Japan) with great success as one of the pillars of its strategic action plans.

Horwath, Rich (2009-08-01). Deep Dive: The Proven Method for Building Strategy, Focusing Your Resources, and Taking Smart Action. Greenleaf Book Group Press.

Do you disagree with him? If so, then leave a message and tell us all.

Use tools to help you, not hinder you

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A friend and I are building a house. Some days more than 50% of our time is spent fixing the tools before starting actual construction. I find myself asking questions when this happens.

Similarly, I read a strategy plan for a national team in our organization once that contained the following:

  • SWOT / BEEM analysis
  • Capacity audit
  • Stakeholder analysis
  • Resource audit
  • Forcefield analysis
  • Balanced scorecard
  • Portfolio analysis

All very well. I concluded that a member of that team was taking an MBA.

Three years later I visited the country that wrote that strategic plan. We could hardly do any work at all because the internet didn’t work and people either didn’t have computers, or the computers they did have did not work in any reasonable timeframe.

I found myself asking questions in my head about their strategic plan.

Does it take 7 types of analysis to determine that the internet should be fixed and working computers supplied to staff?

Do you find yourself trying to fit the tool to your application, or does the tool IMMEDIATELY help you?

If the tool doesn’t help you immediately, then do something else. A tool is something that is supposed to make your work more effective, not less effective. If you spend more time playing with, or arguing about, a tool then do something different as you lead strategically.

Any tools hindered rather than helped you in strategic leadership? Leave a comment with things that helped and things that slowed you down.

Continuous Strategic Leadership vs. Periodic Strategic Planning

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Basically, I am against annual planning. Annual planning implies that once a year we sit down and draw up our plans of what we are going to do that year. However, on the ground, nearly all the work we do is project based. Our projects could be product developments, outreach campaigns, events or other tasks. So, our annual plans are really a summary of plans for the combination of projects that we will progress during the next planning cycle period to most effectively move ourselves towards our vision.

Some projects in the year take longer than a year, and some take less than a year. Let’s say that the planning cycle runs January to December. What happens if a brilliant opportunity for a 6 month project to most effectively make progress towards our vision appears in March? Where does it fit in the strategic plan?

What happens if we think of the strategic planning process as the ongoing assessment and management of implementation of the projects that would jointly help us to most effectively achieve the vision? When we do this, then the planning cycle need no longer exist at that project level. However, most of us lead departments or parts of a larger organization and our projects are sub projects to a wider program, or at least contribute towards a wider program. At the program (or higher level) there may be a desire to periodically (either calendar initiated or program phase initiated) review strategy and progress of our projects. When this happens all that needs to be done at the project level is provide descriptions of the current strategy and status of our projects to those looking at a wider picture.

In other words, the our strategic plans should not be driven by the cycle or reporting needs of the wider picture, but driven by the cycles of our own projects and shared with those who might need the same information for other needs at other levels in other cycles.

If the only planning that we do is annual and driven by wider needs then there is a strong possibility that we are not being strategic with the use of all of the resources that we have at our disposal in our domain of influence.

Let me give an example. At ADC Telecom there might have been 100 projects (product developments) across the company at any one time. Each of these projects was reviewed throughout the product life-cycle for most effective implementation, and for most effective use of the overall company’s resources. However, once a year the corporation had its reporting cycle based around the SEC reporting requirements, In addition the board needed to show the shareholders good value in use of the shareholder’s resources at the annual shareholder meeting.

The annual cycle of the board did not drive the strategic planning at the divisional and product line level. At the divisional and product line level strategic planning was continuous, driven by the product life cycles. However, annual reviews at the divisional and board level just collected the current views and data sets from all of the product lines and reviewed them en-masse.

The strategic planning cycle was dead, but long lived strategic planning as part of day to day strategic leadership.

A Definition of Strategy

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A colleague recommended Rich Howarth’s book on strategy and management of strategy called “Deep Dive: The Proven Method for Building Strategy, Focusing Your Resources, and Taking Smart Action.”

Howarth has a definition of strategy that I like:

“the intelligent allocation of limited resources through a unique system of activities to outperform the competition in serving customers.”

Based upon this definition of strategy, then Strategic Leadership would be defined as

“Causing people in an organization to intelligently allocate limited resources through a unique system of activities to outperform the competition in serving customers.”

I like the idea of recognition of limited resources, and the idea of well thought through intentional use of those resources in a way that improves upon existing ways to achieve the end result. The only thing that I’d love to see changed is the replacement of the word “intelligent” with “optimum”. “Optimum” implies so much more. It implies not just that a better allocation of resources is used, but the best allocation of resources is used.

Regardless of this, at least the idea of “intelligently” allocating resources implies that someone thought of what could be done, and decided to do something for a reason other than “we have always done it like this”.

I thought that this was worth sharing, as I like the thinking behind the definition.

Reviewing Strategy Progress

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Without regular reviews of progress towards strategic goals, most people will get swamped by the urgent. You’d think that goals that are defined as strategically important would automatically be reviewed. Experience tells me that this is not so. In fact, the opposite can occur. When people are swamped by the urgent, taking time to remind oneself that what is truly important is not happening can be embarrassing, and avoided.

Sean Covey in 4 Disciplines of Execution recommends weekly reviews of lead measurements. I think that lag measurements (or the desired outcomes or goals) should also be reviewed, just in case the lead measurements are not leading to the correct lag effects.

Covey recommends frequent, but short, reviews of progress. I agree. This keeps the goals in the front of the minds of those people who would otherwise be swamped by the urgent. I can remember many projects when we were developing telecoms products that did not have regular reviews. I don’t remember them being consistently delivered on time. This is Project Management 101, and I’ve paid for not following it before.

This principle applies to any project. During 2 hour meetings we review progress against an agenda to see if we are still on track to do what we wanted to do during the time allocated. Similarly, we should regularly review macro progress to macro level goals over the life cycle of the strategy to achieve that goal.

I have concluded that daily or weekly 15 or 30 minute stand-up meetings in the short-term can save a lot of crisis management and war-room meetings in the long-term.

Creating a Culture of Strategic Leadership

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Creating a culture in an organization where people engage in creative thinking, planning and execution to most effectively accomplish the vision is a culture change.

To create this culture requires use of culture change management. There are well thought out processes for doing this based upon a lot of experience. John Kotter describes one of the most respected processes for culture change in his book “Leading Change“.

Kotter outlines the process that he observed to have worked the most often. It has 8 steps as follows:

  • Establish a sense of urgency
  • Create the guiding coalition
  • Develop a change vision
  • Communicate the vision for buy-in
  • Empower broad-based action
  • Generate short-term wins
  • Never let up
  • Incorporate changes in the culture
Personally, it’s been a long time since I learned any change management theory, and I can’t remember much of it. However, I do remember that the key was to utilize “change agents” to create “critical mass” of people who operate according to the new cultural principles. I think that I remember that a critical mass had to be between 30% and 40% of the population of an organization for it to reach the tipping point where everyone else would adopt the change.
Anyway, food for thought when thinking about introducing a culture of strategic leadership.

Measuring Execution of Plans

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One of the key elements of strategic leadership is management of execution of the creatively thought through plan.

I don’t think that it is possible to manage the execution of a strategic plan without measuring the results of implementing the plan. If the definition of a strategic plan is that it makes most effective progress towards accomplishing the vision, then it is not possible to execute it without measuring:

  1. the status of achievement of the vision before the strategic plan is executed, and
  2. the status of achievement of the vision after the strategic plan is executed.

This in turn means that the status of achievement of the vision needs to be measured, and the key success criteria for completion of the execution of the plan must be in terms of improvement of status of achievement of the vision.

To use Sean Covey and Chris McChesney’s language, the overarching lag measurement of a strategic plan is the increase in progress towards achieving the vision.

Therefore, management of execution of strategic plans can only be accomplished if the vision towards which the plan makes progress is measured and tracked throughout the plan’s implementation.

How do you measure your vision, and how do you track your progress towards vision?

What is a Strategic Plan?

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I had a heated discussion with a colleague of mine this week. You might have called it an argument, except we both agreed with each other. We were discussing “strategic plans”. My colleague pointed out that the term strategic plans is heavily loaded, and carries a history with it of things that are:

  1. at least 20 pages long
  2. are written by subordinates for supervisors
  3. are re-written the following year upon demand
  4. have no impact on the funding received by the writer
  5. have no impact upon the work that will be carried out by the writer.

However, personally, I don’t recall ever having written a plan like that. I may have written some, but the fact that I don’t recall ever doing so is indicative that any like that written by me were never owned by me.

I have written many plans that I recall. These plans were all written by me to enable me to clarify my thoughts of what I needed to do, and then to help me through the process of doing them.

I can’t remember ever having to do so, but if I had been asked to define what the term strategic plan was I would have probably come up with something like:

“A description of what we need to do to best meet the customer’s requirements using the capabilities of our organization in a way that provides competitive advantage.”

I would have based this definition upon the premise that there are three sources of ideas for products and processes (the three “C”s):

  1. CUSTOMER – The customer’s ideas of what they want.
  2. COMPETITION – Improving upon what the competition is doing.
  3. CAPABILITY – The engineers dreaming up what they think that we can do.

These three domains of ideas intersect with a product or process concept that meets some of the customer’s ideas, while dodging around the competition in a way that uniquely builds upon the capabilities of our internal resources.

I would have said that the strategic plan was the actions that need to be taken to implement something in this sweet spot of intersection of the three domains of ideas.

In Christian ministry we do not have the same concept of competition as we did in the telecom industry. Our “competition” is spiritual. However, there are other ministries doing God’s work, and rather than provide competitive advantage, for the sake of macro level stewardship, we avoid directly doing what another ministry is doing. The principle of the definition of the strategic plan has a strong parallel with that which I would have given in my old role:

“A description of what we need to do to most effectively move towards the Vision of the organization using the unique capabilities of our organization.”

This description might be hundreds of pages, or it might be one page. The length depends upon the complexity of the problem being solved and the personal need of the implementors to have written guidelines to which they can refer during the execution of the plan.

Strategic Thinking – What Does The Customer Want?

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Of the three elements of strategic leadership, strategic thinking is probably the most nebulous to most of us. One of my colleagues shared a good article at brainzooming.com on characteristics of tools that enable strategic thinking, and through further links, the tools themselves.

This all boils down to one thing: the key to strategic thinking is to get yourself out of thinking about what you currently do, and get yourself into thinking about the bigger need. You can always come back and compare the bigger need against what you currently do later in the process.

I spent 15 years in Product Management (and related positions) where there was a need to think about strategy and which new products should / should not be developed. I worked with people with MBAs and PhDs in Marketing (neither of which I have), but I concluded that everything in strategic marketing boiled down to being able to answer the following three questions:

  1. What does the customer want?
  2. What does the customer want?
  3. What does the customer want?

WARNING: Never, ever, ever confuse what the customer says that they want with what they actually want. Steve Jobs proved this point when he repeatedly refused to accept customer feedback on his products (what the customer says that they want), but still delivered incredible ideas that hit at what the customer really wanted.

The upshot of this is that there can never be too much time in strategic leadership devoted to understanding the people you are trying to serve. My experience is that this can be achieved through a combination of both secondary research and primary research with the people being served.

The principle here for strategic thinking is to get your mind away from what you do, and focus on the core need of the people you want to serve. This principle applies everywhere, from technology products to services provided in Christian ministry.

So, when it comes to strategic thinking a question for you to ask yourself is: How far am I from the people I am trying to serve, and how well do I know what they really want? The biggest influence on good strategic thinking is to spend time with your customer. When you understand their real need then you can start to figure out how the capabilities that you have can best be used to meet that need.