We are passing through a period of uncertainties – socials, economics, climatics… What can we do today to adapt strategies to the new challenges? With our mission in mind, we compiled a roadmap for the users of BSC Designer® software.
Before, we formulated the five steps of the strategic planning process. Let’s see how the period of unknowns affects those steps.
- Step 1. Strategy Attributes – Revise and Adapt
- Step 2. Strategy Formulation – First Principles, Scenarios, Complexities, Priorities
- Step 3. Strategy Description – Risks, Context and Budgets for Initiatives
- Step 4. Alignment – Monolith Strategy is a Bad Choice
- Step 5. Strategy Execution
- Remote Teams: Strategy Execution for Remote Teams
Step 1. Strategy Attributes – Revise and Adapt
In step 1, we defined the attributes of the strategy – core values, mission, vision. How should we adapt those strategy statements to the time of unknowns?
|Step 1. Strategy attributes||How to adapt|
|Core values||Are there significant discrepancies between declared values and actual behavior? Re-formulate the core values in a more realistic way or consider improvement initiatives to eliminate the gap.|
|Vision||Has the picture of the future changed dramatically for your organization? Can your vision evolve, or should it be re-created from scratch?|
|Mission||Does your mission for the calm waters period resonate with the challenges of the crisis time?|
When formulating strategy attributes, your team had some customer needs in mind. How have those needs changed? What is more important for customers now?
Strategy Attributes in BSC Designer Software
Most likely, there is a section on your website with strategy attributes. In practice, the members of your team don’t visit that web page often. With BSC Designer, you can display the core values, mission, and vision in your strategy workspace so that everyone can see them daily.
Step 2. Strategy Formulation – First Principles, Scenarios, Complexities, Priorities
In step 2 of the strategic planning process, we formulated a strategy. In the original article, we recommended such business frameworks as Balanced Scorecard, PESTEL, Five Forces. You will still need them to analyze the challenges from different perspectives.
Additionally, consider looking in these directions:
|Step 2. Strategy Formulation||How to adapt|
|Think first principles||News brings us controversial arguments and ambiguous forecasts.
|Eliminate bad complexities||Product complexity is a good proxy indicator of the perceived product value. Find and eliminate bad complexities. Do it for your product, customer service, marketing, internal communications. Start with excessive timing as a metric.|
|Practice scenario planning||Scenario planning is not about predicting specific events, it’s about improving general readiness for future challenges by discussing plausible scenarios, their early sign indicators and some prevention/response plans.|
|Break down unknowns||When dealing with any complex challenge, the initial step is to break it down into more tangible parts. Try to do a decomposition for the unknowns that your organization is facing today.|
|Find your prioritization tool||Current economic trends imply that organizations will have a resource deficit. Strategy is about choices… It’s time to implement one of the formal prioritization tools – this can be a simple prioritization diagram or a dedicated prioritization scorecard.|
|The role of new frameworks||In the period of uncertainties, we will see business consultants come up with new frameworks/methodologies or re-invent existing ones. Use this comparison table to understand how the new tools compare to existing ones and if they can add value to your strategy execution approach.|
Strategy Definition in BSC Designer Software
Users of BSC Designer have access to 30+ strategy scorecard templates, including:
- Leadership Effectiveness
- Diversity & Inclusion
- Remote team management
- Digital Transformation
Use them as a starting point for your strategy scorecard.
There are also templates for 10+ business frameworks available in your account, including:
- K&N Balanced Scorecard – for general strategy description and execution
- PESTEL – for analysis of the external environment
- Five Forces – for competitive analysis
Step 3. Strategy Description – Risks, Context and Budgets for Initiatives
Senior leadership team could have the best strategy in their minds, the challenge is to explain it to others. All of the building blocks of the strategy (goals, performance indicators, and initiatives) need to be adapted to the crisis period.
|Step 3. Strategy Description||How to adapt|
|More specific goals||The planning horizon for the organizational goals is now much shorter. As always, more specific, measurable goals win over vague aspirations. The proven way to achieve a better understanding of the goals is by discussing leading and lagging indicators.|
|Risks and mitigation plans||In calm waters, we tend to formulate goals from a positive perspective (expected achievements). Now it’s essential to consider possible risks and have a risk mitigation plan.|
|Initiatives with context||Vague action plans without clear value for the stakeholders are no longer an option. All initiatives need to be formulated in the context of certain goals, with clearly defined success factors, expected results and progress indicators.|
|Budgets start with initiatives||In the continuously unpredictable business landscape, planning budgets by department for a long-term period and then cascading it down to the projects/initiatives level doesn’t make sense. Instead, start planning a budget with specific projects/initiatives. Update budgets on regular strategy meetings.|
|Remove vanity metrics||It’s a good time to do housekeeping for your dashboard/scorecard. Remove indicators that haven’t been used for a long time, induced wrong behavior, or were misaligned with the goal.|
Strategy Description in BSC Designer Software
Your team doesn’t have time to do a strategy description in spreadsheet or presentation software.
- Create goals on the strategy map, define risks, and align initiatives with budgets, timelines, and progress indicators
- See the budget use per initiative, goal or perspective, as well as the total cost of strategy execution; calculate Earned Value automatically
- Migrate KPIs and their data from spreadsheet software to BSC Designer
- Automate calculations, considering weights and performance formulas
- Configure custom KPI properties to support your preferred data model
- Ensure data consistency with update intervals, access rights, locking historical data
Step 4. Alignment – Monolith Strategy is a Bad Choice
In simple words, alignment is the connection between goals of different levels.
|Step 4. Alignment||How to adapt|
|Misalignment is a black hole of strategy execution||A lot of energy is wasted due to misalignment between the functional scorecards, goals, KPIs, and initiatives. The solution is to discuss current challenges until the role of all stakeholders is crystal clear. Then articulate the findings in the strategy and functional scorecards.|
|Monolith strategy is a bad choice in crisis times.||A high pace of changes, ever-growing complexity and alignment problems make monolith strategy too clumsy. Several interconnected strategy scorecards work much better than a monolith strategy.|
Strategy Description in BSC Designer Software
In BSC Designer, the KPIs and Initiatives are aligned with the goals “by design.”
- Organize various operational and strategy scorecards in the My scorecard section
- Align scorecards by copying and pasting items between two scorecards
- Drill down to the underlying scorecard when needed
Step 5. Strategy Execution
During the time of uncertainties, the planning horizon is much shorter. How to adapt a strategy to a new reality?
|Step 5. Strategy Execution||How to adapt|
|More frequent reviews||Review the inputs, hypotheses and outcomes of your strategy more frequently. Annual reviews are no longer an option. Strategy teams should meet quarterly or even more often if there are new inputs.|
|Live reporting||The format of the presentation slides is no longer an option for performance reviews. Discuss performance using the fresh data directly in the strategy scorecards, capture insights right away.|
|Bad silos/good silos||Silo thinking is a known limitation of effective strategy execution. In the time of uncertainty, the balance between transparency and the need to protect sensitive data should lean towards transparency.|
|A single source of truth about strategy||A common business practice is that a lot of information is transmitted verbally or implied by historical context. As a result, understanding of the goals and priorities varies from stakeholder to stakeholder; with time, the reasoning behind the goals is distorted. A single source of truth about strategy is a must.|
Strategy Execution in BSC Designer Software
- Capture new hypotheses via comment initiatives or dedicated email
- Link to the specific initiatives, KPIs, goals, maps, or dashboards when discussing the strategy
- Ensure data consistency with update intervals, access rights, and audit trail
- Schedule performance reports to be delivered to stakeholders by email
- Control access to the most sensitive parts of the strategy
- Create a single source of truth about strategy: manage all your strategy and KPI scorecards, write down hypotheses that your team is validating and the reasoning behind the goals, KPIs, and initiatives
Strategy Execution for Remote Teams
Social, climatic and energy challenges will continue impacting the way we work. How do the strategy planning and execution processes change when most of the team members work remotely?
BSC Designer was a distributed team from the very beginning:
- We shared some best practices about managing remote teams in general
- And more specific ideas about doing strategy meetings for distributed teams
Here are the key conclusions from these two articles:
- Don’t reproduce the office environment. Things like monitoring the screens of remote employees, time tracking, or obligatory calls won’t improve the performance.
- Don’t do performance appraisals. Don’t use KPIs to calculate rewards. Both ideas look good on paper but induce wrong behavior in practice. Instead, find people with the right attitude and make goals clearer by discussing how to quantify and measure them.
- Power strategy meetings with the right tool. A group call with slides and spreadsheets is not the most effective way to get strategy into the hands and minds of your team. Use a tool where all relevant information about strategy can be gathered in one place and discussed interactively.
Strategy Execution in BSC Designer Software
Here are some features of BSC Designer that will help distributed strategy teams:
- Work on strategy maps simultaneously
- Input performance data and ensure accountability with audit trail
- Manage budgets in various currencies
- Link directly to a specific item of a scorecard to support the discussion
- Add comments or hypotheses to the goals
- Use various views for performance data