For many, strategy may be the most misunderstood concept in business. Is it a business plan document? Is it a mission or vision statement? Is it a pitch deck? While you can record business strategy using these methods, none of them are actual strategies.
A strategy is your company’s plan to achieve a particular outcome through a specific value proposition. Imagine your company as a sailing ship. As the ship’s captain, your strategy is the north star by which you navigate.
How does strategy fit into the business agility picture? Let’s discuss how we manage business strategy in an agile manner. We will also touch on the framework I coach companies to use for developing a strategic plan.
Agile Strategy Management
Agile strategy management is a systematic, iterative approach to reviewing business strategy. In agile strategic management, business leadership meets regularly, usually quarterly or monthly.
Leading up to this review, leaders evaluate the external business landscape, including performing a PESTEL analysis, checking up on the competition, and identifying trends in their industry. Leaders also review business results, financial reports, past Objectives and Key Results (OKRs), and the health of the team’s culture.
During the review meeting, leaders examine each component of the strategic plan using a proven business strategy framework. Based on what was learned leading up to the review meeting, the strategy is adapted to take advantage of opportunities discovered and mitigate potential risks.
Agile strategy management is the ability as as skipper of the ship scan the horizon, identify hazards and harbors, and change course towards that north star.
Why Is Strategy Important for Business Agility?
Outside of cash flow, your business strategy is the most valuable resource your company has. It specifies, in detail, the customers your company serves and exactly how it serves them. More importantly, it defines the customers and activities your company will not be taking on. Many smart people with amazing ideas have been put out of business by drifting from their core business plan – or not having a plan at all.
Strategy forms the foundation for an overall business agility transformation. Business objectives are defined based on the current strategic direction and are refined immediately after agile strategic management. Defining who your business serves and how it serves them will guide the discovery of the unique value streams that deliver products and services to customers.
Products and services are designed around critical points in the value stream with the most benefit to customers and your business. Business operations are built and optimized around running these value streams in optimized ways that align with the strategy. Hiring to drive the value streams and the team culture surrounding the organization will be tightly aligned with the strategic plan when strategy serves as your North Star. Finally, business finance is optimized to fund value streams and support strategic objectives, while eliminating costs that do not fit the defined strategic business direction.
When the rate of change inside an institution becomes slower than the rate of change outside, the end is in sight.
Introduction to the Playing to Win Strategic Framework
The strategic framework that I use to coach businesses and facilitate strategic management sessions was introduced by Lafley and Martin in their book Playing to Win. Lafley used the Playing to Win framework during his time as Proctor and Gamble’s CEO to turn around brands like Olay and grow brands like Tide. The results have been quite successful in the organizations I’ve coached.
The core of the Playing to Win framework is answering five deceptively simple questions about the business:
- What is our winning aspiration? (Where is the finish line)
- Where do we play? (Markets, industries, verticals, demographics, psychographics)
- How do we win? (Differentiation, scale)
- What capabilities do we need? (Skills required to win)
- What management systems do we need? (Processes and tools to manage, measure, and communicate)
While that may sound easy, I have worked with companies who have needed multiple days to come up with an answer for each one. The good news: after creating the initial strategy, using the framework alongside agile strategic management allows businesses to assess their strategy quickly in a structured way.
Agile Strategy Management Can Lead to Growing Business
Your business strategy is the cornerstone of a successful plan for both business growth and business agility. A strategic plan gives your business a clear path forward toward success. Agile strategy management allows you to identify opportunities and threats to your company and adjust the strategic plan so that your business can prosper under any conditions.
CAN'T FIND THE RIGHT STRATEGY?
Are you having trouble identifying the right strategy to grow your business? Call in an expert with a proven system for defining strategy and building an agile business around it. Let’s talk about how I can help your business grow.