Making Strategy Operational

Transcript of Business Essentials interview with John Cleary, Managing Director, Blue Chip Consulting Group. John discusses the development, implementation and measurement of strategic planning...and shares his 7 step strategic planning process.

What does “making strategy operational” actually mean?

In simple terms, it means making strategic planning practical for those required to implement the strategy as they go about their daily work.

Don’t most staff think strategic planning is no more than an excuse for a weekend away for the Board and Senior staff?

Strategy is not always about weekends away. For smaller organisations, planning is probably a better description of time spent in investing in the future.

I understand the cynicism about weekends away but I genuinely believe time spent in developing a clear strategy, whether on weekends away or in the workplace is an effective use of key resources. Making strategy operational converts planning to action planning and assists overcome cynicism.

The old saying “If you don’t know what you stand for, you’ll fall for anything.” is relevant here.

Strategic planning is about defining what you do best and how to do it better to achieve your profitability and sustainability objectives.

You mentioned cynicism. Would staff, other than senior staff, share your belief that strategy makes a difference?

I acknowledge the potential for a great divide between those who actively participate in the strategic planning process and those required to implement the strategy.

Inevitably strategy is about the future and the change required to achieve results in an increasingly complex and changing environment.

Staff at the operational level are too often cut off from the process. They see it as bringing about change when they are looking for certainty and confidence in their ability to do and retain their job. The strategic planning process should give them confidence that, in meeting their Key Performance Indicators (KPIs), they can achieve greater certainty and increased confidence.

How can strategic planning bridge the great divide between those developing strategy and staff working in the business on a day to day basis?

This is increasingly the focus of my corporate work. It’s about giving greater depth to the strategic planning process by making the outcomes obvious for every staff person impacted by the definition of strategic direction.

That is through clarity, effective communication, staff support and training, performance measurement, and a recognition and reward process.

For example in a Retail chain:

What are the implications for employment of casuals if 10% revenue growth is the target?
If you are a casual staff member, what do you understand you need to do each shift to contribute to the target and ensure continuity of shifts?

In making strategy operational, we may need to:

refocus our recruitment effort on staff who can contribute to strategic outcomes
train casual staff in sales skills to achieve revenue targets for each shift or
simply improve the level of customer service to develop customer loyalty.

It's too easy to overlook the role of casuals as part of the strategic planning process when they are engaged in peak periods and are as well placed as any staff to make a significant contribution. But they do need to know both what is expected of them and how they can deliver it.

Does strategy really make a difference?

It does if only to challenge the thinking of staff across the organisation and focus their actions on the best way forward. It’s a good process for developing better working relationships by:

canvassing a broad range of views and options
understanding current capacity and external factors
understanding future needs
defining what success looks like looking backwards

Strategic planning really makes a difference when the process recognises the essential need for staff ‘buy in’ and ownership of the outcome. Collaborative development of KPI's is a key means for ensuring strategy does make a difference.

Is strategic planning a recipe for success?

Not necessarily. It seems One Tel got its strategy terribly confused*. In hindsight, their value was in their customer base not their business model or profitability. Before they stopped to realise that it was too late and the shareholders and creditors paid a high price as a result.

There is no guarantee you can get your strategy right 100% of the time. The quality and depth of the process will significantly increase your chances of success. The strategy debate is worth having because it uncovers the depth of understanding of the competitive environment and builds the commitment of those involved to achieving shared goals.

How does measurement fit into making strategy operational?

Performance measurement is an essential tool. KPI's must flow from strategic goals and objectives and cascade through the organisation. No one should have any doubt about their performance criteria.

If the strategy is designed to achieve profitability and sustainability objectives, we need to invest in the future as we work in the present.

We need to understand that low cost doesn’t usually mean high value! If the KPI is simply cost reduction, low paid employees reduce our cost of doing business. Inevitably the outcome is that we wait around while disinterested staff are busy doing anything but providing service. Time to take your business to a competitor!

If a KPI is sustainable through cost management, it is more likely to be about Sales($) per shift. The outcome is the allocation of future shifts based on those who achieve and exceed their revenue targets by providing excellent customer service.

Are we taking about just financial measures in making strategy operational?

Absolutely not. Financial measures, while important, too often look backwards. Broader measures such as the Balanced Scorecard and the Triple Bottom Line are valuable. Strategic planning looks forward. KPI's related to continuous improvement, innovation, team work and corporate citizenship develop sustainability as the organisation grows.

Sounds simple. Why is it so complex?

All workplaces are very busy but my concern is that staff are too often busy just being busy. As a result, it is essential to help staff become more effective. The proven way to do that is to focus on common goals. This is a key objective of strategic planning anyway.

In addition, strategic planning is often seen as a high level process. It should in fact be a multi levelled process bringing clarity for every employee about their contribution to the strategic priorities of the business.

Can you summarise the essential steps in making strategy operational?

In summary, I see it as a seven (7) part process:

Recognise that the high level part of the process is the beginning not the end. Staff ‘buy in’ and ownership at all levels is essential.
Demonstrate leadership support by shaping culture through shared vision, integrity, empathy, embracing learning and willingness to listen.
Produce clear and concise statements of strategic vision and specific measurable outcomes.
Communicate clearly to enable all staff to understand how strategic objectives impact on what the outcome of the strategic planning process actually means for them in terms of what they do and how they do it and how to manage change.
Adopt a learning philosophy to develop the flexibility to implement continuous improvement.
Develop staff skills to achieve their KPI's developed collaboratively to reflect shared vision of strategic outcomes then recognise and reward staff who deliver.
Celebrate success acknowledging both the short term results and the organisational development achieved by staff working with a clear focus and common goals.

* The opinion expressed is that of the author, not CEO Online.

John Cleary, B.A., Grad. Dip. Bus.(Mngt) FAICD, FICMN. As a Director of the Blue Chip Consulting Group Pty Ltd and Cost Management Specialists Pty Ltd, John Cleary provides management consulting, training and facilitation services to corporate clients on a national and international basis. John holds qualifications from Melbourne and Monash University and is a Fellow of the Australian Institute of Company Directors and the Institute of Cost Management (Nigeria). He is a member of Leadership Victoria and a Graduate of the Williamson Community Leadership Program and the Company Directors Course. John ability to work across a broad range of sectors reflects his thought leadership and business acumen. While he reads widely, he is very practical in approach. He is a good listener and uses analytical skills and empathy to meet the needs of clients. Blue Chip Consulting Group, PO Box 385, Caulfield East, Victoria, Australia 3145; Mob: 0411 522 521; Ph: 61 3 9571 8750; E-Mail: ceo@bluechipconsultinggroup.com.au; Website: http://www.bluechipconsultinggroup.com.au
First published: 2 August 2004.
Last updated: 8 March 2006.