Good strategy is an ongoing process of understanding the current reality, envisioning the future, making decisions and setting direction, and guiding the collective attention of people. Good strategy is clear, focused, coherent, and both stable and adaptive in building capability for lasting success.
Good strategy combines preserving the core with building the new to realize the mission. In creating and executing strategy, two essential areas of focus must be aligned:
Strategic customer acquisition: strategies for desired growth. Requires understanding market forces to ensure the right customers are gained in target markets through target channels. Involves developing a segmented customer value proposition and co-evolving with values and needs to acquire, serve, and grow ideal customers.
Strategic workforce planning: strategies for needed people. Requires understanding labor market forces to ensure the right people are in the right jobs at the right cost. Involves developing a segmented employee value proposition and co-evolving with values and needs to attract, engage, and retain the right people.
Enterprise leaders can apply a scenario planning approach to see beyond the current landscape and co-evolve with the changing environment. In this approach, leaders gain a deep understanding of converging and diverging forces, identify leading turning-point indicators and their probabilities, and develop, monitor, and adjust scenarios as forces unfold. In this sense, scenario planning is really strategic learning.
Consider the health services organization that was able to understand the emerging intersection of socio-economic forces, identify a large and growing group of underserved clients, and leverage its capabilities to offer differentiated services. As a result, it has grown 3x in revenue over the past several years.
To develop and execute a robust strategy with discipline, leadership teams are well-served to recognize strategy starts with context and choice and meets five criteria:
Clarity: The strategy is clear, straightforward, and understood. Coherence: The strategy is aligned, integrated, and resourced. Commitment: There is strong commitment to execute the strategy through cross-functional synergy. Capability: There is the right combination of competency, process, and technology to execute the strategy. Courage: There is a shared desire to boldly pursue the strategy and adapt along the way.
Effective leaders explore choices, make decisions, set direction, align resources, and guide change. Both predicting and shaping the future requires a good process for developing strategic scenarios that are grounded in a coherent logic framework and evolve over time.