Strategy Deployment

Developing a strategy is the easy bit – implementing it effectively (aka strategy deployment) can seem like a far harder challenge!

We can all say we want to grow our business by a certain amount, make it more profitable, or expand into new markets – but what does this really mean, and how do we align and engage our people and other key resources to deliver the desired outcomes? And how do we do this in a fast changing and increasingly uncertain world?

Let’s step back for a minute. In principle this shouldn’t be so difficult – fundamentally there are two ways to align our people to deliver our organisation’s goals:

Firstly, we can use the culture of our organisation constructively. Behind the business strategy should be a shared Vision and a set of Values. “Okay, we have these”, you might say – but do you really, and are they being put into practice?  (There may be some work to do here – this is a subject for another day!).  There is nothing as strong as cultural alignment and everything done through formal strategy deployment (the second mechanism, outlined below) will be helped or hindered by how well or how badly we gain real acceptance and application of our Vision and Values – which of course should be consistent and supportive of the strategy.

Secondly – and the point of this blog – we can use formal methods of strategy deployment. The simplest and oldest of these is ‘MBO’ or Management by Objectives. This highlights the needs for synergistic objectives deployed down and across the organisation – but is limited in effectiveness as it lacks a specific mechanism to tightly align them. We have seen the Balanced Scorecard used as a strategy deployment mechanism – essentially this builds on the principle of ‘what gets measured gets done’ – so if we develop, collect, and review performance against a balanced series of metrics based on our strategic goals,  then these will point people in the correct direction,  towards the ‘True North’ of the organisation. But there is something stronger and arguably more effective – ‘Hoshin’ – which those of us outside of Japan typically prefer to call ‘Strategy Deployment’ (note the Capital S and D). Since this builds on strategic goals and metrics it is arguably an extension of Balanced Scorecard thinking and practice. Organisations using Strategy Deployment will find that an appropriate Balanced Scorecard is almost a natural by-product output from the Strategy Deployment process.

Sounds complicated? Not really. All we’re seeking to do is to translate strategy into action. The trick is not to try and do it in one giant leap but rather in a series of simple steps. In the same way we can comfortably walk up a staircase to get to the next floor rather than trying an impossible leap – so it is with Strategy Deployment.

Step 1:

From the strategy, develop a clear set of balanced goals. Let’s try a topical example – contributing to securing net zero carbon emission by 2030 or earlier. Let’s look at what this might mean using the example of a UK wide fast food business delivering pizzas.  There is a strategic imperative to ‘go green’, but also a ‘business as usual’ to run. So, what’s the strategy for going green and how will the organisation plan for its implementation? The balanced goals might be along the following lines (which are cut short for sake of ease and clarity here):

• Drive carbon footprint to net zero over 5 years
• Continue developing our business – business growth in sales and profits unimpacted (at least not negatively) by going green
• Continue to engage and develop our people
• Capital investment to remain within previous planned parameters

The first objective is clearly the ‘green’ one, the others ensure that the green goal is not achieved at the expense of the ongoing normal planned development of the company.

Step 2:

The next step is to turn these goals into specific short to mid-term measurable goals – what the organisation seeks to achieve over the next planning period (normally 12 to 18 months forward). Let’s assume there’s an actual measure of the current carbon footprint (or net emissions), e.g. 100 CUs (CO2 units), so on a straight-line basis the organisation needs to cut to something like 70 to 80 CUs in this period. Along with the other targets from the current business plan, there will be about 5 or 6 key quantified targets in all, including the target for CUs.

Step 3:

The organisation should then identify the programmes it needs to run in order to deliver these targets. What will be both necessary and sufficient to achieve them? The ‘green’ programmes might include:

• Driving greater efficiency in the use of energy in the organisation’s facilities and its distribution operations, e.g. proportionately use less energy for cooking pizzas, lighting and heating premises, and powering delivery transportation.
• Switching types of energy to greener alternatives e.g. buying electricity generated from renewables, switching to electric delivery vehicles, using cycles rather than motorbike delivery etc.

There will of course be a range of other programmes in place – primarily focussed on operating and growing the business, distinct from the ‘green’ goals, but which may to a greater or lesser extent impact them as a by-product. These will all need to be defined.

Step 4:

The next step is to establish the impact each of these programmes have on each target. The organisation will need to appreciate that each programme will drive not only its primary goal but will also either enhance or conflict with the other goals to some extent. There is a many-to-many correlation at play here. In Strategy Deployment this is typically handled through a facilitated workshop where the key leaders come together to discuss and formulate their best views, and the ‘wisdom of the crowd’ enables a less subjective assessment to emerge.

Step 5:

Now the organisation should identify what individual projects, workstreams or activities constitute each programme. The impact these will have on any of the other programmes should also be considered. Again, the facilitated workshop approach enables this to be undertaken effectively. Have a think about the various possible projects and actions that might be required to drive energy efficiencies and switching to clear renewable sources – these are the details captured in this step of the process.

Step 6:

Through the Strategy Deployment process the organisation has so far correlated the programmes with the strategic goals, and then the individual projects (and workstreams and other activities) with the programmes. These correlations can now be linked to see the extent to which each project contributes to – or otherwise hinders – the strategic goals. A variant of the Pareto principle is helpful here. Some of the projects are seen to be the dominant contributors to several goals, whilst some have a relatively minor impact, and so the organisation can prioritise and rationalise its plans.

Final Steps:

With the projects determined (which can include ‘business as usual’ elements) the organisation can charter and resource them and engage those leading them to determine the detailed individual plans. Of course, governance and review mechanisms will be required, including integrating the outputs and outcomes of the individual projects and activities.

Supporting this process is a set of conceptually simple tools. The main one in Strategy Deployment is the ‘X-matrix’, which sounds much more complicated than it really is! It can be configured on a simple Excel spreadsheet to record the list of strategic goals, the programmes and the projects. It is constructed so that correlations between these, assessed by the business leaders, can be recorded and analysed.

Our advice is to separate the facilitation of the Strategy Deployment process from the participation in it. A couple of experienced facilitators can manage the X-matrix spreadsheet and guide the participating leaders to focus on identifying and assessing the goals, programmes and projects – thereby de-mystifying the Strategy Deployment process for all involved.

Catalyst has assisted many clients in developing and implementing their strategies using such approaches. Please contact us if you’d like to know more or see specific case studies.