If you have ever worked on strategy planning for a portfolio of hundreds of products, coming up with a strategic view that aligns with all the functions within the company is a mean task. Imagine an exhilarating chase sequence from the Bond movies and you get an idea what's it like and this is exactly how I felt when I was leading strategy planning for a portfolio of over 150+ software products.
Many interpret strategy planning as a top-down exercise. If it is done that way, then the organization is making a huge mistake of not playing up to its capabilities. This may make their teams either chase their tail or simply breeze through during the execution phase. Good leaders understand this and spend endless hours gathering and synthesizing inputs from their team, kicking off strategy plan only after they have completed this bottoms-up exercise. They understand the market shifts, competitive plays and their organizational capabilities before setting the goal for the years to come. Here are the key things that one should consider while working on the strategic plan.
Vision - What would your brand like to be when it grows up?
Vision should always be the starting point for any strategic plan. You could have a vision to either divest or sustain or grow. So vision is probably the single most important attribute, the directional element for your strategic plan. A clear vision can help pass a strong message to all the functions (read it as finance, sales, product management) who then can work their magic to make it happen. While the vision statement should stretch the organization's capabilities, it should feel as if it is challenging yet attainable.
E.g. "Our product portfolio will be regarded as the best offering in the systems management market in the world within the next 3 years."
Vision should always be the starting point for any strategic plan. You could have a vision to either divest or sustain or grow. So vision is probably the single most important attribute, the directional element for your strategic plan. A clear vision can help pass a strong message to all the functions (read it as finance, sales, product management) who then can work their magic to make it happen. While the vision statement should stretch the organization's capabilities, it should feel as if it is challenging yet attainable.
E.g. "Our product portfolio will be regarded as the best offering in the systems management market in the world within the next 3 years."
Objectives - How can you make it happen?
Objectives are simply the vision translators. You may want to increase your market share, take it to double-digits, be a gorilla player or may want to survive in the market, stretch that tail as long as you can or even divest. You may want to either grow organically in certain areas or inorganically to catchup with the market. Also you may even want to add constraints that would help define the boundary for e.g. increase market share by x% keeping all the expenses flat. Without clear objectives, each of your function reps may appear like headless chickens running after numbers during the strategic planning cycle.
Objectives are simply the vision translators. You may want to increase your market share, take it to double-digits, be a gorilla player or may want to survive in the market, stretch that tail as long as you can or even divest. You may want to either grow organically in certain areas or inorganically to catchup with the market. Also you may even want to add constraints that would help define the boundary for e.g. increase market share by x% keeping all the expenses flat. Without clear objectives, each of your function reps may appear like headless chickens running after numbers during the strategic planning cycle.
Numbers - Show me the money!!
Numbers are everybody's best friends, the common denominator that can connect all the functions and helps us build the body of the strategic planning discussion.
3 numbers will and should always come up. They may come up in different form factors such as YTY growth rates, E/R, direct expense and SGA. Here they are:
Numbers help provide a compelling story rendered in a classic black and white. So, is Strategy black and white? The answer is NO. What becomes extremely critical is the qualitative understanding of the composition of those numbers, the principles on which they are based on. In the next blog post, I plan to pick up the paint brush and add color by emphasizing key principles to strategic thinking. So stay tuned!!!
Numbers are everybody's best friends, the common denominator that can connect all the functions and helps us build the body of the strategic planning discussion.
3 numbers will and should always come up. They may come up in different form factors such as YTY growth rates, E/R, direct expense and SGA. Here they are:
- Number that you directly control such as Costs,
- Number that your actions directly influences such as Revenue,
- Number where your influence may seem like a small fish or the blue whale and in either case you are relevant for the entire ecosystem, such as Market Size.
Numbers help provide a compelling story rendered in a classic black and white. So, is Strategy black and white? The answer is NO. What becomes extremely critical is the qualitative understanding of the composition of those numbers, the principles on which they are based on. In the next blog post, I plan to pick up the paint brush and add color by emphasizing key principles to strategic thinking. So stay tuned!!!