five essential elements of strategy

STRATEGYEssential Elements of5

A deck prepared by @ljuti. For more, follow @StrategyMasters

Organizational strategies often get stuck to a very high level and vague concepts

You can break them down to understandable, down-to-earth actionable pieces with the

five essential elements of strategy

the elements OBJECTIVE NECESSARY CONDITION SUCCESS METRIC TARGET VALUE MEANS

OBJECTIVE 1

a defined objective that an organization must achieve to

ultimately reach its vision and strategic goals

Strategic OBJECTIVE

DEFINITION

Saad Faruque, Flickr (CC)

Revenues increase.

EXAMPLE

EXAMPLE #1 : OBJECTIVE

Customers can buy solutionsderived from R&D programresults.

EXAMPLE #2 : OBJECTIVE

EXAMPLE

objectives can be categorized into different perspectives

CUSTOMER MARKET OFFERING CAPABILITIES

PEOPLE DEVELOPMENT

FINANCIAL SHAREHOLDER

… and more

Altug Karakoc, Flickr (CC)

NECESSARY CONDITION2

a discrete element whose presence is required for

success

NECESSARY CONDITION

DEFINITION

also known as critical success factors (csf)

Revenues are maximized fromexisting customers.

EXAMPLE #1 : NECESSARY CONDITION

EXAMPLE

R&D program is complete.EXAMPLE #2 : NECESSARY CONDITION

Solutions can be developedfrom R&D program results.

AND/OR

EXAMPLE

EXTERNAL Imposed from outside the organization.

“Compliance with environmental laws.”

INTERNAL Organization imposes upon itself.

“Excellent people and technology.”

necessary conditions can be either external or internal

Quasic, Flickr (CC)Bosc d’Anjou, Flickr (CC)

SUCCESS METRIC3

a defined way of measuring and demonstrating the presence of

a Necessary Condition

SUCCESS METRIC

DEFINITION

Renewal rate of existingcustomer contracts

EXAMPLE #1 : SUCCESS METRIC

EXAMPLE

Number of new solutionblueprints or prototypesbased on R&D program results

EXAMPLE #2 : SUCCESS METRIC

EXAMPLE

OBJECTIVE data-driven

COMPOSITE combines multiplesources

DELEGATED someone elsemeasures it

SELF-ASSESSMENT your own opinion

types of metrics

4

Josep Ma Rosell, Flickr (CC)

TARGET VALUE4

the desired value on a Success Metric that demonstrates a

Necessary Conditionhas been attained

TARGET VALUE

DEFINITION

Renewal rate is 95% by theend of the year.

EXAMPLE #1 : TARGET VALUE

EXAMPLE

One solution prototype basedon R&D program results

EXAMPLE #2 : TARGET VALUE

EXAMPLE

Emilio Kûffer, Flickr (CC)

HITTING THE TARGET VALUE MEANS YOU’VE ATTAINED

THE NECESSARY CONDITION TO REACH THE OBJECTIVE

MEANS 5

a set of activities that will “move the needle” of Success Metric towards Target Value

MEANS

DEFINITION

Chart contracts up for renewal.Determine customer satisfaction.Ensure there are no active complaintsbefore renewal.…

EXAMPLE #1 : MEANS

EXAMPLE

Create a program to develop ideas intoblueprints and prototypes.Ensure appropriate resources andcapabilities for prototyping.Install rewarding system for ideas.…

EXAMPLE #2 : MEANS

EXAMPLE

MEANS CAN BE EITHER

TEMPORARY Projects, one-off tasks, temporary practices, etc.

“Business Development Project in Malaysia.”

PERMANENT Culture, practices, ways of work, habits, etc.

“Continuous evaluation of customer engagements.”

Chris Lott, Flickr (CC)

SynthesisPutting it all together∞

LET’S PUT THE ELEMENTS TOGETHER IN ATTEMPT

TO SEE THE WHOLE

Lawrence Rayner, Flickr (CC)

the process is simple and straight-forward

begin finish

SET OR PICK AN OBJECTIVE

DETERMINE NECESSARY

CONDITIONS

DEVISE A SUCCESS METRIC

DEFINETARGETVALUE

FIGURE OUT MEANS TO MOVE THE

NEEDLE

Marc Wathieu, Flickr (CC)

OBJECTIVE

Revenues increase.

REVENUES INCREASE

NECESSARY CONDITION

NECESSARY CONDITION

NECESSARY CONDITION

Revenues are maximized from existing customers.

New customers are acquired and secured.

Highest gross margins from sales are realized.

OBJECTIVE

MAX EXISTING

NECESSARY CONDITION

NECESSARY CONDITION

SUCCESS METRIC

TARGET VALUE

Renewal rate of existing customer contracts.

Renewal rate is 95% by the end of the year.

OBJECTIVE

NECESSARY CONDITION

NECESSARY CONDITION

RENEWAL RATE 95%

MEAN MEAN MEAN

NECESSARY CONDITION

Chart contracts up for renewal.

Determine customer satisfaction.

Ensure no active complaints before renewal.

NOW RINSE AND REPEAT.(YOU’LL HAVE TO DO IT ONLY ABOUT A HUNDRED TIMES)

tripleigrek, Flickr (CC)

THE GAME IS EASY TO PLAY.

COMING UP WITH THE RIGHT IDEAS IS THE HARD PART.

Cary Bass-Deschenes, Flickr (CC)

BUT EVENTUALLY YOU’LL HAVE IT ALL FIGURED OUT

Son of Groucho, Flickr (CC)

NOW GO OUT THERE AND GIT ‘ER DONE!

Sergey Galyonkin, Flickr (CC)

This deck was prepared by @ljuti

THANKS!

For more on strategy, follow @StrategyMasters