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Is your strategy ‘hot’ or not? And does it matter?

The Management Centre

“If you know the enemy and know yourself, your victory will not stand in doubt”

Sun Tzu c. 490 BC, Chinese military strategist, and author of The Art of War

I’ve been putting together a day on strategy as part of a series of seminars we’re running encouraging thought leadership in the not for profit sector. Each seminar has some outstanding speakers and concentrates on one of three key areas for charities and non-profits: change, strategy and innovation. (See below for seminar details.) Anyway my seminar efforts led to wider thoughts … so maybe it’s a good time to re-start the blog and share some ideas.

I’ve written lots about change in earlier blogs, so thought it might be interesting to think a bit about strategy in this one.

Let’s first deal with what strategy isn’t about in my view. The early concerns in a strategic process are often about what model or approach to use – so as a consultant I’m often asked is Scenario Planning ‘hotter,’ or funkier, or more up to date as a way to plan than the Balanced Scorecard? (Strategic planners are as trendy as any 15-year-old adolescent.) “Hot or Not?” isn’t necessarily a bad question. But that ‘which model?’ question is not where I encourage people to start – it’s the wrong question.

(BTW I’m so bored hearing people say they’re bored using PEST or SWOT. On day one at Harvard Business School you learn that PEST and SWOT are essential for your planning process – and you learn to do them properly. Strategy isn’t necessarily meant to be fun! And sometimes you have to do boring stuff to be successful. It’s like going to the gym twice a week – regular is better for fitness. For most organisations the strategic plan is like a crash diet – done in a rush to get ready for a big event!)

Anyway, my contention is your strategy will only work if you ensure that all parts of your organisation are fit and work together effectively towards delivering it – otherwise it’s just a paper ambition, a proto-plan. But how do you assess how well overall your organisation is positioned to deliver any plan? And how do you make sure you remain flexible and open to possibilities while ensuring you build on current success?

The first strategic challenge is not to choose a format or model to begin writing a plan but to really know – analyse – yourself and your organisation. This analysis helps you decide two things: where to focus your attention and how to remain flexible in what Sun Tzu elsewhere in The Art of War calls “the infinite variety of circumstances.” (These circumstances might range from the credit crunch to a new government or even changing beneficiary needs. Stuff happens.)

One useful way to consider the effectiveness and flexiblity of your current approach is the McKinsey 7S framework. Peters and Waterman, two legendary management consultants and authors, developed this model in the early 1980s. But despite being 30 years old it continues, in my view, to be a useful way to assess your strategic health. (So some things from the 1980s – though maybe not flares and Betamax – are still worth using!)

The basic premise of the Peters and Watermans model is that there are seven internal dimensions of an organisation that need to be aligned for success. These are based around 7Ss: strategy, structure, systems, style, staff, skills, and shared values.

Below I explore each of these factors to help you understand your situation and gain that vital organisational self-knowledge.

 

Strategy:

By strategy Peters and Waterman mean the kind of plans you have and how clearly they are shared and understood across the organisation. In the seminar we’re running we’ll talk about the difference between Blue Ocean and Red Ocean strategy. Blue Ocean strategies are those where you either want to gain a significant competitive advantage – Red Ocean strategies are those where you have to work in a very competitive situation with other agencies – for example many organisations seeking shrinking government support. But the key metric here is to have a plan that can be understood and explicitly interrogated by key stakeholders.

Sightsavers International, led by the inspirational Caroline Harper, decided to make a plan that could be reproduced on one sheet of paper and shared around the organisation. They call it the SIM card. (We’re proud at =mc to have helped them with this.) To find out more about their ‘one page plan’ and how they shared it across the organisation and externally click here.

Structure:

Structure has a huge impact on strategy – especially through governance and management. Do you operate in a centralized way like Greenpeace International , enabling you to move quickly and in one key direction? Or do you prefer devolved accountability like ActionAid where decision-making is slower but inclusive? There are advantages and disadvantages to both approaches. And choosing the right structure is essential. Is your structure helping to drive success and balance, or holding you back, leading to infighting and stasis?

Systems:

Systems are about your business model. What’s your model and how is it managed and controlled? The CEO of Wal-Mart , running one of the largest and most diverse companies in the world, has just three key performance numbers delivered to him every day at 17.30 to tell him how the company is doing. Those numbers reflect the key systems he is responsible for. As managers we often have access to lots of data, but how relevant is it to our direct responsibilities? Too much data from too many systems – and too much monitoring – means you can end up ’drowning in data’. Do you know what the data you get means? Are you clear on what your key systems are and who needs to monitor them?

Style:

What’s the style of your organisation? And how do other people see you and your brand or style expressed – cool and relaxed like Google, or more formal and geeky like Microsoft? Style does set an important marker for substance. How approachable do you want to be to stakeholders? Some charities are keen to be, and to be seen to be, inclusive such as Macmillan Cancer Support. Others like the Royal Society accept that they are not inclusive but are about excellence and by definition, exclusion.

Macmillan Cancer Support undertook a major rebrand to re-imagine themselves as a more inclusive organisation. So their tagline became “we are Macmillan Cancer Support” emphasising the link between themselves, the beneficiaries and the donors.

Staff:

Jim Collins in his book Good to Great talks about the importance of “getting the right people on the bus.” By this he means that the key role of a leader is to select the best people to take the organisation forward and to keep them close and ‘onboard’. Are you clear who your dream team is? How do you make sure you attract and maintain the right people? And once you have them how do you continue to retain and develop them?

The RNLI hires outstanding people and then offers them the chance to take part in a demanding 3-year management development programme – based on the Kouzes and Pozner leadership framework – that builds their skills to a whole new level of performance.

Skills:

Linked to the issue of the right staff and managers is the skills (or competencies) of the organisation. What current competencies – skills, knowledge, and abilities – does your organisation have already? And what emerging competencies does it need to acquire to deliver on the strategy? Your competencies may not be as obvious as they might seem. Michael Eisner, CEO of Disney famously proclaimed that the company’s core competence was not making movies, or marketing but… ‘licensing’. So the production of films, cartoons etc. was simply seen as way to create intellectual property which others would invest in with low risk to Disney. (That’s why to you need 7 dwarfs… for 7 licensing opportunities!) What are your key current competencies and which do you need to acquire to meet your strategy?

Comic Relief is a major UK charity with a range of competencies – from intellectual property such as the famous Red Nose and cuddly toy characters, to an ability to organise broadcast telethons exceptionally well. A key goal is to learn how to maximise the value of these different properties.

Shared values:

The final – central – S is concerned values or principles. How clear are you – and others – on your values? Values can dictate the kind of work you do, who you work with, and even where you will take money from – for example Amnesty International won’t take money from governments in case it compromises its independence and integrity. Some cultural organisations see public subsidy as fundamental to their business model. The challenge is you need to be careful these principles don’t become outdated or simply closed mindsets shutting off opportunity.

When the National Trust for Scotland recently went through a difficult restructuring they held a key conference for all staff called the Heart of the Nation, which sought to build on values as a basis for alignment.

The 7S model was, and remains, a useful tool to assess your readiness for strategy. Work your way through the ideas above. If you’re interested I’ve created an assessment tool online to help you establish your profile against the 7Ss. Fill it in and you’ll get an independent view on your readiness for strategy.

We’re also, as I said above, organising a series of Thought Leadership events over the next few months at =mc in London. To find out more click here.

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