Strategy is simple, but usually made overcomplicated. It requires the creativity to craft a vision, to understand the key business drivers and set a good direction, but moreover, it requires the discipline of execution.
Most people tend to spend more time thinking on the vision and underestimate the need for execution even though there are tons of literature and facts that show that most companies that fail, do so not because of their lack of creative vision, but for falling behind of execution.
Make it simple. Developing a strategy requires first, to develop the 3-6 key objectives that the organization needs to attain in the next 3-5 years. Some authors call these "objectives”, others call them “must-win battles” or others refer to them as their key strategies. Choose whatever. I like to call them “key objectives”. Developing these objectives requires creativity, understanding the business, your competitors, etc… it is a very important role of the manager. They need to be shared in the organization so that everyone gets aligned on what is important and what needs to be achieved.
Unfortunally, even though you might do very well to make these objectives as clear as possible, there is always room for different interpretations and, moreover, there is no finish line. That’s way the second step is to create KPI’s and targets. The KPI’s are indicators of progress towards the objectives that you defined. It is the way of actually measuring if you are achieving your objectives or not. With the KPI’s come the concrete targets for the next 1-3 years, which then become the short-medium term objectives that the organization needs to achieve to be successful. The clearer the KPI’s, the clearer the objective’s. The objective and the targets are the “what” the organization needs to achieve. The objective provides the vision and the targets make it crisp and clear.
Follow me next week when we’ll discuss steps 3 and 4, the “How”.
