Welcome to the fourth application lab in the [Re]Create Application Lab Collection. The lab includes a downloadable workbook (PDF), a video, and editable worksheets (PPTX).
Introduction
Leading an organizational transformation to achieve sustainable excellence is, at its core, a strategy development, and deployment process. The job of strategy development is to translate the stakeholder needs and the compelling directive into a strategy with clear and actionable goals, objectives, and initiatives. A complete strategy addresses the customer and how you will compete, including products, channels, and relationships, along with the value chain and support operations. Initially, the strategy is the bridge between the external environment and the offerings. Then the strategy translates these external requirements and offerings into goals and objectives for the internal system of value chains and support processes. Also, a strategy to achieve sustainable excellence addresses all six stakeholder groups.
A strategy for sustainable excellence answers two fundamental questions.
- First, what is the strategy to serve external customers and compete?
- Second, what is the strategy to develop the organization so that it can help all the stakeholders AND compete?
Read Chapter 4, Focused Strategy, in the [Re]Create Book.
Available on: Amazon | iBooks | Nook | Kobo | Audible (Audiobook)
Application
Objective – Understand the concepts, components, and relationships of a Focused Strategy and how they contribute to leadership and organization [re]design for sustainable excellence.
How will you achieve your compelling directive? The objective of this lesson is to apply the key focus strategy concepts to your organization using the worksheets. Specifically, you will identify the goals related to the seven organization areas. Then, integrate the natural environment into the strategic goals. Then, diagram the relationships between the strategic goals and make your strategy’s business logic explicit. Finally, you will identify the strategy outputs, measures, action plans, and a leader for each strategic goal.
Focused Strategy Video 0:53
Objective – Identify the goals related to the seven key organization areas.
Beginning at the top of the organization with an external focus, identify the goals to improve the customers’ experience, satisfaction, and the resulting behaviors of repeat and referral business. Then, working backward, identify goals to improve the products, services, and operations that create the customer’s experience. Then identify the goals for supplier and partner performance to help achieve the operations, product, service, and customer goals. Next, identify the goals and the workforce capability, capacity, engagement, and well-being that enable the supplier, operations, product, service, and customer goals. At this point, you have the goals identified for the organization’s fundamentals – people, process, product, and customer. Information and related digital systems are essential enablers of all organizational systems. Once again, form follows function. Now, identify the knowledge management information systems and the data analysis goals that will enable systems throughout the organization. Based on the expected outcomes of the system of goals, project the financial implications and outcomes. Finally, identify the goals that address the natural environment, including energy sources, usage, waste, and social responsibility goals.
1. Customer Goals
Based on your knowledge of customer requirements (Lab #2), identify the goals to improve customer satisfaction, repeat, and referral business as appropriate. For example, a “big picture” goal for a healthcare organization might be to enhance the continuum of care for all patients.
2a. Product and Service Goals
Identify the goals to improve product and service performance needed to achieve the customer goals identified in the previous step. How will these goals help achieve the customer goals? A healthcare example might be to improve the effectiveness of healthcare service delivery as measured by clinical outcomes and patient experience surveys.
2b. Production Goals
Identify the goals to improve operational performance. How will these goals contribute to the product and service goals? Building on our healthcare example, a production and operations goal might be to improve the efficiency of healthcare operations by 5% in the next year while maintaining (or improving) clinical outcomes and patient experience.
3. Supplier and Partner Goals
Identify the goals to improve supplier and partner performance. How will achieving these goals contribute to the production, operations, and product goals? Again, building on our healthcare example, a supplier goal might be to reduce the # of medical supplies returned due to quality defects to less than two percent.
4. Workforce Goals
Identify the goals that address the improvement of workforce capability, capacity, engagement, and well-being. An example directly related to organizational performance might be to improve workforce satisfaction and engagement by five percent annually. Another example might be to design and develop a system to accurately assess and forecast workforce capability and capacity to ensure adequate staffing to support project growth.
5. Knowledge and Information Goals
Identify the goals that address the improvement of knowledge management and information. How will these goals help to achieve the other goals? For example, sustain and enhance core clinical and support performance measures. Or, maybe more specifically, sustain and enhance patient experience metrics with relevant high-performing comparisons.
6. Leadership and Strategy Goals
Develop the overall financial goals based on projections resulting from achieving the previous goals. This approach might seem backward from what you are used to doing. Many organizations begin with financial goals and work backward to identify what they need to achieve them. This method seems very logical, and who could argue with a rational deductive approach such as that? The only problem is it is pure guesswork and will drive decisions that could end up limiting the financial performance.
A better place to start the deductive approach is first to develop the goals to enhance those aspects of the organization that create the value and, in turn, the financial outcomes. Then, based on achieving the goals, project the financial performance. Finally, assess the projected financial results and work backward to adjust the goals until you arrive at the desired financial performance. It is an iterative approach.
Also, identify the goals that focus on improving the strategic performance not already identified in other areas. Healthcare examples might be, improve the percentage of reimbursement to the maximum allowable or improve the affordability of healthcare services.”
7. Governance Goals
Identify the goals that address the natural environment (energy sources, usage, and waste) and social responsibility. For example, increase the $$ revenue from recycling by 10% annually or increase electricity usage from renewable sources (e.g., solar panels) to over 50% of the total electricity used.
Integrating the Natural Environment Video 7:15
Objective – Integrate the natural environment into the strategic plan.
Integrating the Natural Environment into strategy typically occurs at two points. First, it is integrated at the top with goals that address the overall organization. Second, it is addressed as part of each strategic initiative when developing strategies and action plans. This worksheet addresses the overall organizational perspective. There are three fundamental issues to address. Where do you get your materials and energy (sources)? How do you use those materials and energy (usage efficiency and waste)? How do you dispose of or reuse or recycle the waste?
Sources
The first question is, what are the sources of energy and materials? Identify the energy and material sourcing goals that address the overall organization, including suppliers, logistics, operations, customers, employees, and investors. An example might be converting 30% of your retail locations to solar power in the next 12 months. Another example might be sourcing 50% of new materials and components from solar-powered suppliers and working with suppliers to convert their operations to solar power. When developing the source goals, look at the entire supply chain from beginning to end and identify ways to make different choices on the types of energy and materials.
Usage
Next, identify the energy and materials usage goals for each part of the organization. How are you going to use the materials and energy? One way may be to decrease the packaging materials for shipping products by 30%. That not only saves materials, but it saves shipping weight and thus fuel and shipping costs. Another example might be decreasing transportation distances by 50% through “buy local” programs. This reduces the amount of energy to move stuff around and supports the local economy and community. It can also save you a lot of money in transportation costs. Another example might be to reduce the electricity usage by 25 percent at the non-solar supplied locations over the next 12 months. While you are converting 30% of your retail locations to solar power, reduce energy usage until you get them converted.
Waste
Finally, identify the energy and materials waste and recycling goals for each part of the organization. Once organizations begin to measure the amount of waste, they often find they are throwing away a lot of money. An example goal might be to increase the amount of money you make from recycling by 10% in the next 12 months. Another approach might be to source 50% of new materials and components from suppliers that have recycling programs built-in so that they can take back the old product and the waste and recycle it themselves. Finally, work with suppliers to develop recycling programs at all locations.
Strategy System Video 11:25
Objective – Diagram the relationships between the strategic goals.
A strategy system diagram is a visual depiction of the key relationships among the goals that provide the strategy’s logic. The sequence used to complete the Focused Strategy Framework (4-4) worksheet is to identify the underlying logic behind the system of goals. Building on that foundation, develop a diagram that makes the connections among the goals explicit and visual.
Begin with the deserted outcomes and the customers. For example, if you want to increase revenue, you need to increase repeat purchases and referrals. To increase repeat business and referrals, you may need to improve customer service. To improve customer service, you may need to improve the online customer platform and customer service training. To focus the platform and service training improvements on those aspects that will have the greatest impact on customer satisfaction, you may need more measurement and analysis.
Strategy Outputs Video 14:02
Objective – Identify the strategy outputs including, measures, action plans, and a leader for each strategic goal.
Goals and Objectives
Identify one goal from the strategy. For example, one goal might be to increase revenue from repeat purchases and customer referrals. Enter each goal and objective that you currently have.
Measures
Identify the measures that you measure to know whether you are making progress on the goal and identify any targets for those associated with the short- and longer-term. Examples might include, the number of customer referrals, the percent of customer repeat purchases, and the customer service satisfaction survey.
Action Plans
Then identify the action plans that will create the results identified in the goal and measures – for example, improve the online customer support platform, customer service training, and the customer service performance metrics and feedback.
Leader
Finally, identify the leader for each goal and objective. You need somebody responsible and accountable for accomplishing the action plans, targets, and goals – for example, Samantha Jones Vice President of Customer Support.
Worksheets
- Complete – Complete the worksheets by yourself or with your group.
- Review – Present and explain your worksheets to your colleagues and boss and get their feedback.
- Revise – Incorporate their feedback into your worksheets.
Conclusion
A strategy is never static. The strategy and specific initiatives continually evolve through implementation. Gone are the days when you could meet once a year, develop a plan, and spend the rest of the year executing the plan. That never really worked for most organizations anyway. Today, strategy is often an ongoing conversation that emerges as the year unfolds. Yes, you begin with a portfolio of projects, but along the way, new projects are added, existing projects are redesigned and adjusted, and some are abandoned. This ambiguity can cause anxiety for some team members, but it does help keep the plan relevant to a fast-changing dynamic world. The context of the industry will drive the amount of change and frequency of conversations. The output or strategy is an untested hypothesis.