This is the most creative part of strategy although it also involves making strategy clear and actionable by developing KPI's. These turn the objectives into a crisp and actionable direction.
The second step is to create the "How". This is the part where execution and getting things done become predominantly important. First you need to develop the Initiatives that will help you achieve your targets (set in the "What" part) for the next 1-3 years. This is not intended to be a list of all single actions, but rather those strategic initiatives that will have the greatest impact and will be absolutely necessary to achieve the 1-3 years targets. One important pitfall is creating creating initiatives where most of them end after 12-18 months. If that's the case you might be putting in risk your 2nd and 3rd year, as some initiatives might require structural changes to make the necessary step change you're looking for. It is important to think with a longer time horizon.
Finally, and as we did for the "What" part we need to be able to quantify progress and measure if we are being successful or not with the implementation of our strategic initiatives. I call this the "Measures" part. Here you will usually find 2 type of measures: one is xx initiative finalized by yy. The other one is more KPI like. If for example you have initiatives aimed at improving forecast accuracy (to reduce inventories), you might also have measures related to forecast accuracy with a concrete target. These second type of measures might help you understand the quality of the initiative implementation. Otherwise you are just measuring if something was done or not, but without any idea of the quality of it. This, by the way, is a common pitfall when designing measures as it's much easier to set deadlines for initiatives than it is developing KPI's to evaluate and measure the quality of an implementation.
Summarizing the model looks as following:
1. Objectives: 3-5 years key battles or strategies that must be undertaken to win and create and sustainable advantage
2. Targets: quantitative measure of progress towards the objectives (1-3 years)
3. Initiatives: main action plans designed to achieve the targets (1-3 years)
4. Measures: quantitative measure of progress towards the initiatives
I hope this model is simple enough so you can use it and implement it in your business or organization.
In the next post I'll talk about one of the most critical elements of strategy: how to turn strategy into disciplined execution.
