Strategic Change Agenda: How to Define Transformation Goals

Learn how to facilitate definition of the goals for a strategy map with the Strategic Change Agenda framework.

Background

Strategic Change Agenda is one of the frameworks¹ for strategy formulation. In the context of strategic planning, the change agenda tool was mentioned in “The Execution Premium”² as a tool that “explains the need for the change in the strategy.” One of its best-practice applications was the design of Strategic Change Agenda (called Strategic Shift) for the FBI³.

The tabs on the left are the 'Change dimensions'; the rectangles in the first column are the past states according to the change dimension; the rectangles in the second columns are the desired future states. Source: Strategic Change Agenda.

What is the Strategic Change Agenda?

In essence:

With Strategic Change Agenda we analyze the possible change dimensions in the context of current state versus desired future state to formulate specific objectives for the strategy map.

By using the framework, we make sure that all the goals on the strategy map have a meaningful context “by design.”

Isn’t it Obvious? What’s The Value of the Framework?

From the first look, the framework might look like an obvious tool with no real value. We all do the “current vs. desired” analysis even in our daily life. How does the framework help?

The important part of the framework is the connection between the goal that is formulated on the strategy map and the change agenda.

This connection explains the reasoning behind the goal, makes it easier to explain strategy to the stakeholders, and increases the chances for successful strategy execution.

How are the Strategic Dimensions Formulated?

The Strategic Change Agenda works as a pre-filter for the Balanced Scorecard’s strategy map. The strategic dimensions are formulated according to the organization’s vision as well as using the findings of other business frameworks, like:

• PESTEL to capture the dimensions associated with external factors
• Five Forces Analysis or VRIO for competitive dimensions
• Perspectives of the Balanced Scorecard
• SWOT, Pareto Analysis, 7-S

Example of Using Strategic Change Agenda

Here is an example of the Strategic Change Agenda.

We can use these change dimensions to formulate goals for the strategy map. Let’s take “product complexity” change dimension as an example:

• Current state: product is hard to get started
• Future state: product is easily adapted by the new users

With these two states as a context, we have some possible goals for the strategy map:

• Implement onboarding tutorials
• Analyze the complexity points of the product
• Revise product marketing materials
• Change the approach to train sales agents

Among these candidates, I’d prefer to start with the analysis of the product complexity to find the root-case of the challenge. We can map this goal into the Learning & Growth perspective of the Balanced Scorecard.

Formulating Goals on the Strategy Map

When adding the goal to the strategy map, it’s important to keep its context.

• There should be a well-articulated answer to the question “Why is this goal important?”

To answer this question, we can get back to the Strategic Change Agenda and look at the respective:

• Change dimension
• Current state
• Future state

Change Agenda in BSC Designer

In BSC Designer, you can use a Strategic Change Agenda template (My Scorecards > New > New Scorecard > More templates…) to formulate the change dimensions, current and future states.

Once the Change Agenda is defined, select the future state and use the Idea to goal button on the toolbar.

Select a strategy scorecard where you will continue working on this goal and the new parent item. Click Copy or Link button.

It will create a goal in another strategy scorecard, keeping the link to original pair of states in the history record.

Should your stakeholder have questions about the reasoning behind the goal, you can always see the involved change dimension and get back to the original Strategic Change Agenda for more detail.

Advantages and Disadvantages of the Framework

A strong side of the framework is its simplicity supported by a few guiding principles:

• Define the change dimension
• Define where we are now
• Define where we want to be
• Formulate a goal for the shift from current state to future state

Another strong side of the framework is that it gives contextual information for the goals “by design.” With the context well-defined, it’s easier to answer “why?” questions asked by the stakeholders and achieve better acceptance of the goals.

Similar to other strategy definition frameworks, the effectiveness of the initial discussion is defined by the experience of the team:

• There is no guarantee that all relevant dimensions will be taken into account (other strategy formulation frameworks like mentioned PESTEL or 7-S will add value in this case).
• Similar to mixing strategic and operational goals, mixing strategic and operational dimensions might be an issue – invite an experienced facilitator to keep the discussion on the right track.

Alternative Frameworks

Here are some alternatives to the Strategic Change Agenda.

Gap Analysis – Quantified Change Dimensions

Similar to the Strategic Change Agenda, Gap analysis suggests looking at the difference between the current and desired states. Gap analysis is used for performance indicators, where the performance gaps (actual performance vs. expected performance) are quantified.

Three Horizons – Prioritization of The Change Dimensions

McKinsey’s Three Horizons Model was introduced as a framework for high-level planning of the innovation efforts.

Rather than focusing on a single state (“future” state of the strategic change agenda), Three Horizons suggests there are three scopes for the change depending on the time horizon:

• Horizon 1: Change of existing business model
• Horizon 2: Change by addressing goals in the comfort zone
• Horizon 3: Change to address the future trends

In this way, the Three Horizons framework can add a layer of prioritization to the Strategic Change Agenda.

Executive Summary

Strategic Change Agenda helps formulate contextual goals using a pair of current/future states across change dimensions. To use the framework, follow these steps:

• Find change dimensions; use the strategy formulation frameworks like PESTEL, SWOT, or Five Forces
• Describe current and future states
• Formulate goals on the strategy map, keeping the states and the change dimension as a context

What's next?

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