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The dictionary defines “Strategy” as a detailed plan of action designed to achieve a long-term or overall aim.

It generally involves setting objectives and priorities, determining actions to achieve the objectives and mobilising resources to execute the actions.

So, a Strategy describes the “How?” to meet the objectives, the “What”, using the resources available.

What makes the work of setting Strategy so challenging?

(1) Terminology

There are many different terms used when organisations articulate their future state. Vision, Mission, Values, Purpose, Strategy, Objectives, Goals, Aims, Tactics and the list goes on. These are all widely used in organisational language and business text books but with inconsistent meaning across the terminology. The first step in planning a move from organisational State A to State B is to agree the terminology to be used in the Strategy discussion and what those terms mean, so there is common understanding when terms are mentioned in the planning process. You don’t have to have strong feelings on the terms and meaning, just consistency and common understanding when used.

Insight 1: Spend time defining the use of your terms used in Strategy, agree on them and then widely communicate them.

(2) Data sufficiency

A common problem with “Strategy” for organisations is that there is a constant question around how much data is sufficient to plan. If there is insufficient data then any grandiose aspirations cannot be translated into work and, if there is too much data and accompanying management review cycles, then the actual work never gets done.

(a) Data sufficiency = Low e.g. “Our Strategy is to be the preeminent food ordering app in Australia”. This is nice, but it is very hard to design work around this and allows complete flexibility to do any type of relevant work. It is also hard to measure whether the Strategy has actually been achieved in the future.

(b) Data sufficiency = Very high e.g. A 200-page document could be produced designing the main work, the detailed work, detailed plans, accountable staff assigned, designing subordinate roles, designing processes, designing management methods, designing control process, designing supporting systems and designing measurement methods. The problem here, is that so much work goes into planning, the work may never get done or the work starts and it struggles with change and agility as it may not meet the reality of implementation.

Insight 2: There must be some executive management guidance and agreement of how much data is sufficient to plan the work of Strategy. Enough data to get started but not so much data that the organisation spends all their time planning and never doing the actual work.

(3) Roles

This is where we look at the role of an organisation’s Board and Executive Management. They both have their role to play in Strategy.

(a) The Board – What is the guidance on Strategy from the various governance bodies in Australia and is it consistent?

  • (Source: Australian Institute of Company Directors) Strategy is the process of selecting the organisation’s goals and developing ways to achieve them. It is typically characterised as being long-term and uncertain. In a governance context, Strategy refers to the decisions made by the Board and management that determine how an organisation will meet its goals while responding to changes in its environment and allocating resources to meet the goals.
  • (Source: Corporations Act) The Board will be responsible for providing leadership and setting the strategic objectives of the entity and overseeing management’s implementation of the entity and its performance generally.
  • (Source: Australian Securities Exchange) Strategy development may be shared by the Board and management, but planning and implementation of the strategic objectives are usually the preserve of management. The Board will monitor that management has a plan and that the plan advances the organisation towards its objectives.

It appears to be consistent that the Board is expected to understand market context, set the overarching aspiration, or raison d’être, of the organisation and define clear and measurable outcomes that should be achieved over a longer time frame that demonstrates the organisation is heading towards its purpose. There is some debate, however, how much the Board gets involved in designing and agreeing the main work packets to achieve those Objectives and ensuring capable executive personnel are in place reporting to the CEO to enact the work. It very much depends on the size, capability, objects and governance of the organisation.

(b) Executive Management – The work of an organisation is enacted through the management led by the CEO (or equivalent leader at the apex of an organisation), their direct reports, and the various layers of management and staff depending on the levels in the organisation. Once the CEO is clear on the context of their work, the purpose, and their outputs and measures, they are able to design the work to achieve those objectives. We then expect the CEO, with the support of the Board, to design the work of their direct reports (the Executive Management team) and then put capable Executives into role. As long as the Executive team’s work is clear, and they have the capability and resources to do the job, then they in turn can design their own work as well as any managerial hierarchy to enact work to achieve the objectives. The CEO’s role is then to hold those Executives to account for their outputs and measures, assess their work and change their work if there is a reason to do so. In theory, work is additive i.e. Staff work contributes to Manager Objectives which in turn contributes to Executive Objectives which then in turn contributes to the CEO’s overall Objectives.

Insight 3: The Board and Executive Management should take guidance from any regulatory or governance bodies for their industry on the topic of Strategy. Then jointly develop clear context, purpose and measurable objectives to assist in developing the Strategy for the organisation. The development of the Strategy (a detailed plan of action, by definition) is a process where the Board is partly involved (e.g. at the start and in review cycles) or actively involved in the entire process depending on what is agreed for your organisation.

Conclusion

Our work and academic research has seen consistency in these 3 Challenges and we have therefore developed a pragmatic strategic planning framework – EPOCHS Strategy® – that is very clear on all 3 Challenges. This allows an organisation to move through a 6-step strategy planning process that is logical, academically researched and proven.

To discuss your strategy challenges, book a FREE 30 min consultation with our team today.