Professionals and managers are often called upon to speak with executives on a variety of issues facing an organization. Questions often arise concerning the organization’s vision, key strategies, objectives or goals. Well, what is a strategy anyway? How does it differ from a goal or an objective? How is mission different from vision, or are they really the same? The more you understand strategy, the more effective you can be in answering critical questions for a business executive.
Leadership Strategies developed the Drivers Model, a simple communication tool for helping organizations construct a business strategy. The model is fully scalable and applies to Fortune 500 companies, non-profit organizations, field offices, individual departments, etc. There are four major steps in the Drivers Model.
Step 1: Where are we now? (Situation Assessment)
Understanding the current situation is vital to identifying the approaches needed to drive success. A full understanding of the current situation includes an analysis of several areas. The list below shows a sample list of assessment areas and one or two of the key questions to be answered for each.
- Customers – What are their current and future needs? What are their perceptions of our performance?
- Competitors – How do we compare against our competitors? What are their recent and anticipated initiatives?
- Industry trends – What have been recent shifts in the industry? What shifts are anticipated for the future?
- Performance trends – How are we performing by product, by market, by channel?
- Recent goals and initiatives – How are we achieving against our plan? How successful have we been with recent initiatives?
- Employees – What are their perceptions of our organization and how we can improve? How can we make them more effective in their roles?
- Organization profile – What are our strengths and areas for improvement with regard to our organization structure, processes, technology, culture, etc.?
Often, planning teams summarize the current situation information into a SWOT: a summary of the organizations key strengths, weaknesses, opportunities and threats.
Step 2. Where do we want to be? (Strategic Direction)
The heart of strategic direction setting is this second step. In our Drivers Model, the information from the situation assessment is combined with the understanding of future trends to formulate a series of trend and positioning statements. These statements, which outline the overall future direction of the organization, are structured as: “We believe (trend)…Therefore we must (positioning)…”. To demonstrate the power of positioning statements, suppose your organization was an American manufacturer of lighting products (i.e., chandeliers, lamps, fixtures, etc.). Along with selling products through hardware and other retail stores, your company also owns a small number of stores in factory outlet strip centers. Based on the situation assessment the business identified the following critical trends and positioning statements:
- We believe increases in the quality of manufacturing in third-world countries will result in an acceleration in the downward pressure on retail prices for lighting products. Therefore we must (a) seek off-shore opportunities for sourcing products and (b) in the longer term, establish our own international manufacturing capability.
- We believe consumer confidence in the security of Internet-based purchases offers opportunities for higher margin, direct-to-consumer sales. Therefore we must provide customers access to all of our products through a user-friendly, secure, web-based interface.
- We believe increased competition requires greater efficiencies and yields from marketing expenditures. Therefore we must develop an integrated customer database across our multiple product lines to provide the foundation for quickly implementing campaigns targeted at the specific needs of each customer.
These positioning statements outline specific directions. However, the full business strategy must take a comprehensive approach to addressing goals (broad aims) and objectives (specific, measurable targets). Therefore, the second step in the strategy development process includes several other activities as well:
- Vision statement
- Mission statement
- Positioning statements
Step 3 – How do we plan to get there? (Implementation Planning)
Once the strategic direction is established, the next step is to develop the road map for achieving the direction. For the road map to be viable, however, it must focus on three areas in particular.
- The barriers to achieving the vision indicate those challenges which the organization must overcome to achieve its strategic direction. Barriers answer the following questions: “Why haven’t we achieved our vision already? What is standing in our way?”
- While barriers address the challenges, the critical success factors identify those key conditions that must be met to achieve the vision. Critical success factors, typically no fewer than two and no more than seven, serve as a guide for determining the strategies to be developed.
- The strategies that are undertaken (i.e., the road map) must drive achievement of the strategic direction by controlling the critical success factors and overcoming the barriers.
Going back to the lighting products example, critical success factors (CSFs), barriers and strategies related to one objective in the strategic direction might include the following:
Reduce the average labor costs related to product manufacturing by 15% over the next three years through implementation of advanced technology.
Reliable information on the track record and prospects of technology options
Skilled resources to focus on acquisition and implementing technology
Inadequate capital budget to invest in proven technology
Assign a project manager (half-time) to:
- Compile the research on manufacturing technology options
- Develop the business case for technology implementation
- Gain executive sponsorship and Board acceptance for the capital investment
- Assemble the implementation team
- Oversee the implementation
A detailed action plan is developed for each priority strategy which details steps, responsibilities, costs and timetables.
Step 4 – How will we monitor progress? (Monitoring)
Many organizations benefit simply from going through the process of creating a strategy. At this point, everyone is clear on where we are going and how we plan to get there. However, the key value to strategy development comes in the implementation of the plan. Unfortunately, all often, strategic plans become space fillers on an executive’s bookshelf. To prevent this occurrence, we recommend a structured monitoring process every three-to-six months. The structured review involves assessing progress on strategies and grading the current and projected performance against the quantified objectives. While often a sobering process, this detailed level of monitoring provides a method for ensuring that long-term strategy stays on the front burners, despite the pressures of the day-to-day business operation.
In conclusion, more and more organizations are learning the value of a well-communicated and executed strategy. PR professionals well-grounded in the language of strategy can provide readers with key insights into where a company is going, and where it might be going wrong.
Strategic Plan Terms and Definitions: Quick Reference for PR Professionals
|Vision||A picture of the “preferred future”; a statement that describes how the future will look if the organization achieves its ultimate aims. “The vehicles of choice for a value-focused world”|
|Mission||A statement of the overall purpose of an organization. Describes what you do, for whom you do it and the benefit. “Our mission is to provide the consumer with high quality, price competitive automobiles to meet their personal, business and recreational needs. “|
|Guiding Principles||General guidelines which set the foundation for how an organization will operate. “Responsiveness to consumer needs will be a first priority in our operations. Therefore we will…”|
|Goals||Broad, long-term aims that define accomplishment of the mission. “Profitability – Maximize net income by increasing revenues and controlling costs.”|
|Objectives||Specific, quantifiable, realistic targets that measure the accomplishment of a goal over a specified period of time. “Increase revenues by 12% in 1993. Limit increases in overhead costs to 2% in 1993. Achieve a 5% reduction in management staff through increased automation.”|
|Critical Success Factors||Major items or issues that must “go right” to achieve one or more objectives. “Body styles that are pleasing to the public. Effective dealer network. Successful office automation project.”|
|Barriers||Existing or potential challenges that hinder the achievement of one or more objectives. “Inefficient northeast plant. Price competition from Japan manufacturers. Public perception of poor quality by USA.”|
|Strategies||Broad activities required to achieve an objective, control a critical success factor, or overcome a barrier. “Establish partnership with Japanese manufacturer to revamp the northeast plant. Implement program to widely promote our success as a quality producer.”|
|Actions||Specific steps to be taken, by whom and by when, to implement a strategy. “Initiate discussions with PR firm on Quality Promotion BPC 2/1 Develop first draft of Promotion AKO 3/15 Review Promotion internally and update BPC 4/1 “|
About the Author
Michael Wilkinson is the CEO and Managing Director of Leadership Strategies, the largest provider of professional facilitators and facilitation training in the country. Michael is a much sought after trainer, facilitator and speaker. He is a Certified Master Facilitator and a Certified Professional Facilitator. As a past president of the Southeast Association of Facilitators, the creator of the FindaFacilitator.com database and a board member of the International Institute of Facilitation, Michael is a national leader in the facilitation industry. You can get more tips from Michael’s books, including The Executive Guide to Facilitating Strategy, The Secrets of Facilitation, The Secrets to Masterful Meetings, and CLICK: The Virtual Meetings Book.