[Whitepaper] Strategy Classics: Value Disciplines Model

2/14/2021 The Definitive Guide to Strategic Planning: Here’s What You Need to Know to Successfully Formulate and Execute Your Strategy | by Ma…
https://mark-bridges.medium.com/the-definitive-guide-to-strategic-planning-38719a4d56a0 1/13
Mark Bridges
Follow 60 Followers About
The Definitive Guide to Strategic Planning:
Here’s What You Need to Know to Successfully
Formulate and Execute Your Strategy
Mark Bridges Jan 5 · 10 min read
Note: This article originally published by my colleague David Tang.
Open in app

For many organizations, this is the time of the year is when Leadership will conduct the
annual Strategic Planning process and plan the near-, mid- and long-term strategies.
This article breaks the full Strategic Planning and Execution processes into 3 sections:
1. Strategic Planning
2. Strategy Development
3. Strategy Execution
For each section, we will highlight important concepts core to the topic, as well as direct
you to important resources for further understanding.
1. Strategic Planning
Per Wikipedia, we can define Strategic Planning as:
Strategic Planning is an organization’s process of defining its strategy, or direction, and
making decisions on allocating its resources to pursue this strategy. It may also extend
to control mechanisms for guiding the implementation of the strategy. Strategic
Planning became prominent in corporations during the 1960s and remains an
important aspect of strategic management. It is executed by strategic planners or
strategists, who involve many parties and research sources in their analysis of the
organization and its relationship to the environment in which it competes.
Strategic Planning is a crucial process, but often poorly executed, leading to poor
translation from Strategy to Execution.
In most organizations, executives complain that their Strategic Planning is overly
bureaucratic, insufficiently insightful, and doesn’t accommodate today’s rapidly
changing, digital markets. To combat these issues, there are a few best practices we
should follow:
1. Explore Strategy across 3 time horizons.
2. Encourage productive and stimulating Strategic Dialogue.
3. Engage a broad, decentralized group of stakeholders.

Let’s dive a little deeper into each of these best practices.
Explore
The 3 time horizons we want to explore can be defined as short term (1-year
timeframe), medium term (3–5 years timeframe), and long term (5+ years). Each
horizon is uniquely considered and has different objectives.
Short Term Horizon — The objective here is to challenge the current strategy,
evaluate progress, and explore options to accelerate execution. The scope is around
products, regions, and functions. As we explore the short term strategy, it’s
important to encourage a culture of creativity and real dialogue. We should seek to
avoid a budget-focused process and discussion.
Medium Term Horizon — The purpose in the medium term horizon discussion is to
enumerate the steps necessary to realize the vision. The scope is around the business

unit. Our focus in this horizon is to develop clear, actionable business plans that
describe the multi-year strategic initiatives to transform vision into value.
Long Term Horizon — Lastly, the objective over the Long Term horizon is to define,
validate, or redefine the vision, mission, and direction of the organization. This
session is the forum to challenge and redefine the boundaries of our market. We
want to shape our future by influencing the industry with our strategic actions.
Encourage
Most organizations repeat the same Strategic Planning process year after year. This leads
to a situation where year after year, the usefulness of the Strategic Planning process
deteriorates, as most analyses become adjustments of last year’s analyses. There is a
stagnation of effectiveness. The same inputs lead to similar conclusions and creativity is
sapped from the sessions.
So, how do we break this type of cycle and behavior? The answer is to encourage
productive and stimulating Strategic Dialogue by asking different questions. Great
strategists need to learn the “art of questioning.” Here are a few guiding principles
around this regard:
Questions shouldn’t be too broad (e.g. “How do we disrupt the industry?”).
Questions also shouldn’t be too narrow (e.g. “What’s should the pricing be?”).
The leadership team should engage in a strategic workshop to articulate and
prioritize key questions we need to answer in the next 3–5 years.
Once the right questions are selected, we can have teams address these questions. These
teams will design novel, relevant analyses, amass new knowledge, and develop strategic
recommendations. Remember, as well, question-driven strategic dialogue is an iterative
process.
Engage
Organizations that engage a broad, decentralized group (of both internal and external)
stakeholders in their strategic development efforts yield stronger results than
organizations that leave strategy in the hands of a small, centralized team.

Involving a broad group prevents groupthink. We should involve folks from different
backgrounds, generations, and geographies. This is more likely to surface alternative
ideas and perspectives. It is common to also engage participants external to the
organization — e.g., customers, suppliers, consultants.
This approach improves our strategic “peripheral vision.” In other words, it makes us
more adept in spotting both opportunities and risks early.
It is also important to engage stakeholders early on, as this increases buy-in, which helps
with the Strategy Execution process later on.
For more information on Strategic Planning, take a look at these frameworks available
on Flevy:
Strategic Planning Frameworks & Tools
Complete Guide to Strategic Planning
Best Practices in Strategic Planning
Strategic Business Planning
2. Strategy Development
With the right process in place for a productive and robust Planning, we now need to
ensure we have the right tools and philosophies to formulate a well thought out Strategy
that is appropriate for our competitive and organizational situation.
The good news is there’s a plethora of research and consultative frameworks on Strategy
Development and Strategic Thinking, perhaps more so than any other management
topic. There are literally 100s of Strategy Development frameworks developed by
strategists, academics, and consulting firms.
This is also the bad news. As there are so many tools available, it can be difficult to
determine what the right approach is for our organization.
To help navigate through the available tools, let’s take a look at the Strategy Framework
Canvas (SFC). The SFC is a unifying choice framework that guides us in selecting the
appropriate strategy for the circumstances at hand and execute it effectively. This model

is particularly useful for large organizations that are now stretched across a more diverse
and faster-changing range of business situations.
SFC identifies 5 distinct archetypal approaches to strategy:
Classic
Adaptive
Visionary
Leader
Renewal
Classic
The Classic approach is the most common approach. In this situation, the market is
predictable, basis of competition is stable, and strategy is sustainable.
Classic strategy is achieved through sustainable Competitive Advantage by positioning
our organization optimally in an attractive market. Since the basis of competitive
advantage within these environments is known and non-malleable, advantage can be
based on superior scale, differentiation (or, equivalently, scale within a narrower market
segment), or superior capabilities.
The most well-known Strategy frameworks are the Classics, such as:
Porter’s Five Forces
BCG Growth Share Matrix
Value Disciplines Model
Adaptive
We use the Adaptive approach when the environment is neither predictable nor
malleable. There is continuous disruption in the market.

Unlike the Classic approach of sustainable Competitive Advantage, the foundation to the
Adaptive approach to strategy is the notion of serial temporary advantage. Within
unpredictable and non-malleable environments, the emphasis is on continuous
experimentation and real-time adjustment — as opposed to long-term analysis and
planning. Because advantage is temporary, we focus on means and not ends.
Examples of Adaptive frameworks include:
Time-based Competition
Temporary Advantage
Adaptive Advantage
Visionary
We take the Visionary approach when we can reliably create or re-create an
environment by some degree of predictability by seeing an opportunity and pursuing it
single-mindedly.
Visionary approaches are most frequently associated with entrepreneurial start-ups.
However, large organizations increasingly need to adopt this approach for themselves,
as well.
Examples here include:
Blue Ocean Strategy
Innovator’s Dilemma
Value Innovation
Leader
The Leader Approach is used when the environment is unpredictable, but malleable. We
can shape or re-shape the whole industry.
A Leader approach both permits and requires an organization to collaborate with others
in a diverse ecosystem that distributes risk, supplies complementary capabilities and

resources, and builds the market quickly through strength in numbers.
Examples of Leader frameworks include:
Networks
Ecosystems
Platforms
Renewal
Lastly, the Renewal strategy approach is used when the environment is harsh. This type
of strategy aims to restore the vitality and competitiveness of the organization.
In such a harsh environment, the existing circumstances prevent the current way of
doing business from being sustainable. The first step is to change course to preserve and
free up resources.
Examples here include any type of the following:
Transformation strategies
Turnaround strategies
Once we determine the type of Strategy approach to take, the next step is to adopt a
Strategy Development framework most befitting our organization. Key considerations
include our corporate culture, organizational structure, leadership style, competitive
positioning, and core competencies, to name a few.
For more information on Strategy Development, take a look at these frameworks
available on Flevy:
Complete Guide to Business Strategy Design
Strategy Development Methodology
Growth Strategy Framework
Strategy Framework Canvas

Strategy Chessboard (this is another holistic Strategy framework)
For even more materials on specific Strategy frameworks, take a look here:
https://flevy.com/business-toolkit/strategy-development-sd
3. Strategy Execution
Strategy without Execution is merely theory. Every organization has a Strategy. But, did
you know the majority of strategies fail?
Numerous studies from top consulting firms (including McKinsey, Bain, BCG) and
Harvard Business Review have shown approximately 70% of strategies fail due to poor
execution. Furthermore, organizations only realize about 60% of their strategies’ value.
This gap between the Strategic Plan and actual performance results is called the
Strategy-Execution Gap.

For most organizations, their projected performance based on strategic planning
forecasts follow a “venetian blinds” pattern. In other words, when each year’s
performance projections are viewed side by side, the resulting diagram resembles a
series of diagonal venetian blinds. This pattern signifies a deeper issue of an institutional
practice of setting unrealistic goals, which has damaging impacts to the organization’s
culture.
Here are 3 guiding principles to follow to close the Strategy-Execution Gap.
Principle 1: Keep it simple.
In most organizations, Strategy is a highly abstract concept, often misused to be
synonymous with vision or aspiration. It is likewise something that’s not easily
communicated or translated into action. Resultantly, without a link between strategy
and performance cannot be drawn, because the strategy itself is not sufficiently coherent
and concrete.
On the other hand, high-performing organizations avoid long, drawn-out descriptions of
lofty goals. Instead, they utilize clear, succinct language describing their course of
action. By being very clear on what the strategy is and isn’t, we can keep all employees
headed in a unified direction.
Principle 2: Use a rigorous Strategy Execution/Deployment framework.
To be productive, the dialogue between corporate and the business unit about market
assumptions must be conducted within a rigorous framework. Here are some
frameworks available on Flevy:
Hoshin Kanri Strategy Deployment (and Hoshin Policy Deployment)
Guide to Business Strategy Execution
Balanced Scorecard
Profit Pools
Supercharge Strategy Execution: Performance Scorecard

The specific framework used to ground our strategic planning isn’t the most important.
What is critical is that the framework establishes a common language for dialogue
between corporate and the business units — one that also unifies and the strategy,
marketing, and finance teams.
Without such a framework, it is difficult for management to determine whether the
financial projections are reasonable and realistic. Thus, management can’t know with
confidence whether performance shortfall stems from poor execution or a poor plan
Principle 3: Continuously monitor performance.
High performing organizations utilize real-time performance tracking. They
continuously monitor resource deployment patterns and their results against plans,
leveraging continuous feedback to reset planning assumptions and reallocate resources
accordingly. This real-time approach allows management to identify and fi flaws in the
plan and shortfalls in execution — and to avoid confusing one with the other.
Continual performance monitoring is particularly important in highly volatile industries.
In such environments, events outside the organization’s control can render a plan
useless.
For frameworks specific to Performance Management, take a look at these materials
available on Flevy:
https://flevy.com/business-toolkit/performance-management-perf
By the way, we have a complimentary primer on Strategy Development and Execution
available on Flevy here:
https://flevy.com/strategy-frameworks
This primer discusses 12 frameworks, many mentioned in this article.
Does your organization have issues bridging the gap between Strategy and
Execution?
If you lead a mid-size or enterprise organization, we have a solution at Flevy that helps
you bridge the gap between Strategy and Execution through Employee Engagement. For

more info, you can email me at dave@flevy.com with the subject line: “Bridge the
Strategy-Execution Gap.”
For more frameworks and tools on other management topics, from Digital
Transformation to Change Management to Problem Solving, take a look here:
https://flevy.com/business-toolkits
Lastly, if you stumbled across this article and found it to be helpful, please feel free to
connect with me on LinkedIn. Thanks for reading.
Want to Achieve Excellence in Strategy Development?
Gain the knowledge and develop the expertise to become an expert in Strategy
Development. Our frameworks are based on the thought leadership of leading
consulting firms, academics, and recognized subject matter experts. Click here for full
details.
“Strategy without Tactics is the slowest route to victory. Tactics without Strategy is the
noise before defeat.” — Sun Tzu
For effective Strategy Development and Strategic Planning, we must master both
Strategy and Tactics. Our frameworks cover all phases of Strategy, from Strategy Design
and Formulation to Strategy Deployment and Execution; as well as all levels of Strategy,
from Corporate Strategy to Business Strategy to “Tactical” Strategy. Many of these
methodologies are authored by global strategy consulting firms and have been
successfully implemented at their Fortune 100 client organizations.
These frameworks include Porter’s Five Forces, BCG Growth-Share Matrix, Greiner’s
Growth Model, Capabilities-driven Strategy (CDS), Business Model Innovation (BMI),
Value Chain Analysis (VCA), Endgame Niche Strategies, Value Patterns, Integrated
Strategy Model for Value Creation, Scenario Planning, to name a few.
Learn about our Strategy Development Best Practice Frameworks here.

Strategic Planning Business Strategy Strategy Planning Business Models Ceo Skills
About Help Legal
Get the Medium app

[Whitepaper] Strategy Classics: Value Disciplines Model

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (18)

Semelhante a [Whitepaper] Strategy Classics: Value Disciplines Model

Semelhante a [Whitepaper] Strategy Classics: Value Disciplines Model (20)

Mais de Flevy.com Best Practices

Mais de Flevy.com Best Practices (20)

Último

Último (20)

[Whitepaper] Strategy Classics: Value Disciplines Model