Model-Based Strategy Framework
In a previous post, I reviewed an article entitled Why Strategy Execution Unravels — and What to Do About It. which was published in the Harvard Business Review (HBR)*
The HBR article identifies alignment and coordination issues between different organizational levels and functions, which contribute to what is often called the Strategy Execution Gap. The article also identifies five common myths associated with implementing a strategy, which the authors claim “are just plain wrong.”
In a previous post, I explored the first myth-Execution Equals Alignment-and shared an approach to help improve coordination issues between different functions and disciplines: The Strategy Execution Playbook.
In this post, I will introduce another approach which helps with alignment issues and addresses the next two myths discussed in the HBR article: Communication Equals Understanding, and Execution Means Sticking to the Plan . I call this approach The Model-Based Strategy Framework .
When combined, I’d argue that The Model-Based Strategy Framework and The Strategy Execution Playbook also help address the final two myths identified in the article, that A Performance Culture Drives Execution and Execution Should Be Driven from the Top. Whilst I have not made this final argument in detail in this post to keep it short, if you read both of my posts, you will hopefully see how both approaches can help address the issues identified by these last two myths.
Communication, understanding, and sticking with the plan.
The HBR article research was based on a survey of 7,600 managers in 262 companies across 30 industries. Amongst the findings were the following insights:
· Only 55% of the middle managers surveyed can name even one of their company’s top five priorities.
· Not only are strategic objectives poorly understood, but they often seem unrelated to one another and disconnected from the overall strategy. Just over half of all top team members say they have a clear sense of how major priorities and initiatives fit together.
· Fewer than one-third of senior executives’ direct reports clearly understand the connections between corporate priorities, and the share plummets to 16% for frontline supervisors and team leaders.
While this HBR article was published in 2015, I have seen more recent research from other academics and strategy consulting firms that also identify issues with communicating, understanding, and executing strategy. I have also seen these issues in many of the organisations I’ve worked for. If you are still reading, I’m guessing you’re also familiar with these issues.
So, how can you better communicate your strategy and increase your corporate agility so that you can adapt to whatever reality throws at you?
The Model-Based Strategy Framework
Although I spent 5+ years developing strategies for organisations earlier in my career, most of my recent experience has involved executing strategies-building new value propositions and ventures or transforming established organisations.
This work often required me to rapidly evaluate and interpret a strategy developed by others so that I could help design, plan, and manage their execution.
Below is a one-page infographic which represents the main strategy definitions, tools, and frameworks I use to analyse and clarify a strategy.
This infographic is more than just a checklist; it is a framework which helps develop a more holistic model of an organisation within the environments in which it will operate over time.
If you have experience with existing strategy, innovation, and strategic risk tools and frameworks, much of the content in this infographic will be familiar to you. Several of the diagrams, particularly the Markets Map and Key Factors Graph, may initially appear new to you. However, as you begin to use them, it will become apparent that these are just composite diagrams on which the insights and outputs from many other strategy tools and frameworks can be represented.
Why is this useful? Many strategy tools and frameworks are presented in visual ways which do not readily combine or align with each other, making it harder for people to connect the dots between them. I have designed the Markets Map and Key Factors Graph to overcome some of those relational issues.
When the Key Factors Model and Markets Map are combined with the other existing models shown in the infographic- the Business Model, Operating Model, and Value Proposition Model- they form a more holistic three-dimensional model of your strategy over time.
This Model-Based Strategy Framework embodies some key design concepts I learned from a course on Model-Based Systems Architecture and Engineering from MIT and other useful techniques from the fields of Engineering, Enterprise Architecture, Systems Thinking and Project/Program Management.
The objective is to develop a common set of visual and numerical models that everyone involved can understand and act on in an aligned and coordinated way to realise your strategy.
The Strategy Execution Playbook, which I wrote about in a previous post, identifies the pathways to connect the Model-Based Strategy Framework to the detailed design, planning, and execution activities undertaken by different functions and disciplines within your organisation.
The last two myths identified in the HBR article- that A Performance Culture Drives Execution and that Execution Should Be Driven from the Top- can Be Addressed by Using Both the Model-Based Strategy Framework and the Strategy Execution Playbook.
(*HBR allows three free articles a month, so you will hopefully be able to search and access this article without a subscription)
