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Copyright OpenStrategies Ltd 2014
Validating Strategieswww.gowerpublishing.com/isbn/9781472427816
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Core messages
• Why most strategies fail
• Core functions (and hence strategies) of organisations
• Developing and Validating Strategies
• Performance management and enabling benefits
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Worldwide, what percentage of strategies
have minimal impact?
Poll question
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Do we need strategies?
• If in doubt restructure because it gives the impression of progress– Variously attributed
• Corollaries:– If in doubt create a strategy because it gives the impression of
progress– If in doubt set up a pilot/trial (or committee or enquiry or…)
because it gives the impression of progress
• Too often, these are just ways of avoiding making decisions and taking action
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‘Tired of Strategic Planning?’
From a 2007 survey of 30 top international companies, McKinsey’s conclusions about strategic planning were:
• “…the extraordinary reality is that few executives think this time-consuming process pays off…”
• “…there is a lot of banging of drums and waving of feathers and an almost mystical hope that something good will come out of it”
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The Old Strategy Paradigm(by OpenStrategies 2001)
005
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Why most strategies make no difference #1
Strategy language• Taxonomy (classification of strategy words)
– Outputs, outcomes, mission, goal, objectives, framework, vision, status, cross-cutting-themes, aspirations, strategies, plans, collaboration, cooperation, competition, values, structures, KPIS, tasks, accountabilities, responsibilities, principles, tactics, actions, directions, issues, factors, priorities, benefits, impacts, purpose, capacity, capabilities, forecasts, scenarios, drivers-for-change, data, information, knowledge, wisdom…. and sometimes ‘implementation’
• Syntax (rules for constructing strategy ‘sentences’)– Do goals create objectives or do objectives create goals?....
• Semantics (meaning of strategies)
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Why most strategies make no difference #2
• 3 levels of strategies
• Aspirational
• Guidance
• Operational
• Human cognitive limits
• In the mind 5 +/- 2
• On paper 15 +/- 5?
• Lack of focus on core organisational functions
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Three broad levels of strategy
• Aspirational (high level – not implementable)
• Guidance
• Operational (action plans – implementable)
It’s essential to be crystal clear about
what level of strategy you are creating
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Human cognitive limits
There are limits to how much information humans can use at any one time:
– Humans can hold 5 +/- 2 ideas in their heads
– We believe that most humans can comprehend just 15-20 inter-connected ideas when they are in a written or graphical format
So Strategies need to be written in a simple format, with information ‘chunked’ into units of 15-20 pieces of information
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Our main OpenStrategies’ principle
The smallest amount of information…
that has the highest value…
to the most people
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The core functions of organisations and their customers/citizens
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Create assets (products, services, infrastructure) and enable
customers/citizens to Use them to create Benefits
Inputs Outcomes
External factors
Internal factors
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Rising sea levels Global politics
Global finance
Legislation
Human Resources
Climate change Business confidence
Local weather
Local politics
Corporate Social Responsibility
Outcomes Based Accountability
Collaboration
Purchasing
Administration
Finance Leadership
Investment Logic Mapping
PRUB concisely defines the core ‘process’ of organisations – ie running Projects to create Results such as infrastructure products and services which citizens, communities and customers Use to create Benefits for themselves
Create products/services Use products/services
External information flowing in
Internal information
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PRUB
Organisations run Projects
which produce Results (outputs/assets)
which people Use
to create Benefits (outcomes)
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PRUB / BURP
Create assets Use assets
Planning (BURP)
Implementation (PRUB)
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Assess customer’s needs based on what they want to do and
achieve with our company’s potential
new product
Information available on what customers
want to do and achieve with our company’s
potential new product
Use this information to design, build and test market new products
to enable customers to do and achieve what they want to do and
achieve
Accurate product and customer-use data is available relating to
our company’s potential new product
Happy customers because they have done and achieved
what they wanted to do and achieve
Sustainably manufacture,
distribute and market our company’s new
product
Our company’s new product available to customers together
with relevant product marketing information
Customers and buy and use our company’s new
product to do & achieve what they
want
Our company is sustainably profitable
Projects Results Uses Benefits
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Who actually ‘realises’ Benefits?• Project Managers?• Users?• Providers?• Others?
Poll question
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To enable Benefits, a strategy must:
1. Define what ideally needs to be done
2. Provide cause-and-effect Evidence that it will actually work
3. Demonstrate that it is worth it
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Validating strategies
To be fully Validated a strategy must pass all 3 ‘tests’ below
1. The SubStrategy test (is it logical?)Can you represent the strategy as one or more SubStrategies?
2. The Evidence test (will it actually work?)Is there compelling Evidence for the key Links in the SubStrategy(s)?
3. The Value test (is it worth it?)Is Ʃ$B > Ʃ$P + Ʃ$U
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Step 1: SubStrategy – is it logical?
• Create a SubStrategy which identifies what we would like to happen
• Shows theoretically how Projects (inputs) Link through Results (outputs) and Uses to Benefits (outcomes)
• Ideally 15-20 ‘PRUBs’
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Step 2: Evidence – will it actually work?
• A SubStrategy identifies what we would like to happen
• We need to add Evidence to be sure that it really will happen
• Evidence is information which ‘Validates’ the Links between Projects, Results, Uses and Benefits
• (Evidence is not the same as performance management data)
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What’s the difference between
‘data’ and ‘evidence’?
Poll question
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Evidence vs data
• Many organisations say that their strategies are ‘evidence-based’
• In reality they are ‘data-based’• What’s the difference between ‘data’ and
‘evidence’?• Where do ‘data’ and ‘evidence’ sit in the PRUB
sequence?
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Evidence sits on the Links between Projects,
Results, Uses and Benefits
The most important cause-
and-effect Evidence sits on
the Links between Results
and Uses
Performance management
Data sits within each Project, Result, Uses
and Benefit and has no cause-
and-effect information
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Performance Measurement Data c.f. Evidence
• Performance data sits within the PRUB boxes and is simply a measure of the state of a Project, a Result, a Use or a Benefit
• Performance Evidence sits on the links between the PRUB boxes and defines the cause-and-effect information which confirms that Projects will actually lead to Result, Results to Uses and Uses to Benefits
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Orphan Results
P R U B
P R
P1
P2
R1
R2U B
Abandoned Orphan Result
Adopted Orphan Result
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Step 3: Value - is it worth it?
• Determine a ‘Value’ for Benefits (Ʃ$B)
• Identify costs of Projects (Ʃ$P) plus costs of Uses (Ʃ$U)
• To proceed with a Project….
Ʃ$B must be greater than Ʃ$P + Ʃ$U
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Master Class (certificate from Cologne University of Applied Sciences)
London 9 -11 & 13-15th Dec 2014
White Paper: www.openstrategies.com/prub
Book: Validating Strategies
Web: www.openstrategies.com
Email: [email protected]
Linkedin: Phil Driver
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