Strategy Planning (Part 1)

Research consistently shows that a good robust Strategy Plan leads to better long term performance and resilience in challenging times.

For nearly 30 years Strategy Planning with businesses from small to large (largest being Metway Bank before the merger with Suncorp) is something I have done professionally, using various methodologies.

I recently caught up with a colleague who is Australia’s leading strategy advisor, Chris Tipler. He  has written a book (Corpus RIOS) about business strategy that is a breath of fresh air. RIOS is the ‘Realistic Imagination Of Success’. Chris has written about and developed a new simple and practical approach to strategy planning that is both powerful and plain-speaking.

He has successfully implemented it in major Australian companies both listed and unlisted – eg  Australian  Ballet, Transpacific Industries and Maxitrans. I believe it is a great fit for businesses large and small.

So I thought today, I will share in two parts, both his insights and my own from 30 years of strategic planning within my professional network.

In practice strategy is generally generated in one of the following 6 ways. Very few companies do any of this very well and so are at the mercy of the market and of external factors.

1. By the CEO exercising his/her singular judgement
2. By the informal consensus of top management
3. By copying others
4. By reacting to opportunities as they are presented, or to crises.
5. By outsourcing the decision making process to consultants
6. By engaging in a strategic planning process.

Strategy planning too often does not have any discernible positive impact on businesses for a mixture of the following reasons:

1. The models used are too complex
2. The process uses language which is tired or academic and which you cannot relate to
3. The plan does not lead to action
4. The time horizons are too short to be strategic
5. The process does not generate any powerful new ideas
6. Thinking is confined to narrow existing boundaries
7. The mission statement lack rigour and does not lead to action
8. The process lacks imagination – the vision and goals are about better sameness rather than meaningful difference
9. Key issues derived from the SWOT analysis are not properly identified.
10. Models have become more complex over time – with Balanced Scorecard, Corporate and Social Responsibility and Values Based Management confusing matters.
11. When you are planning strategically for your business, your starting point is to understand the overall goal, which is to ‘deliver the promise’, where capability and ambition go hand in hand.
12. Let us start by determining where we currently sit on the map, below and go from there.

The simple steps in the planning process are then as follows:

1. PURPOSE – why do we exist as a business (other than to make money for shareholders)?
2. WINNING (SUCCESS) – what does winning look like?
3. ARENAS – what must we excel at to win?
4. RECITALS – What does it mean to excel at these things?
5. ACTS – What are we going to do achieve the things we have to excel at?
   It’s as simple as that.

In the RIOS process, before going to step 2, detailed analysis is done to come up with a SOWOT analysis rather than a SWOT.  The Actions flowing from the process are to be done in a 6 month and 2 year time frame, to remove it from the usual budgeting process, most things we want to do are more immediate than 12 months, or longer than it.

The Corpus RIOS Process in 5 core steps

Step 1: Purpose
The first step; which defines the enduring raison d’etre (or mission) of the organisation using a rigorous three-way test. This step starts the process of imposing intelligent constraints on the enterprise

Step 2: Winning
The second step, which defines our ambition by asking ‘What does winning look like?’ ‘Winning’ is a point at the agreed horizon where we have been completely successful.

Step 3: Arenas
The third step starts to address the issue of capability. Normally there are 8-10 Arenas – short sentences that begin with ‘We must excel at…… ‘

Step 4: Recitals
The fourth step. For each of the Arenas we ask ‘What does it mean to excel at this? The answers are effectively ‘invitations to act’, and take us to the point where we can complete the action planning

Step 5: Acts
In the RIOS model, the fifth step – action planning – is not done in a 12 month time frame, but in 180 day and 24 month time frames. This is because 12 months is an ineffective action horizon

 

Thank you for taking the time to read this post, that’s it for now and I hope you enjoyed part 1 of Strategic Planning . Stay tuned for Part 2 of this article, to be published on Friday, August 26, 2016.  I can thoroughly recommend the book Corpus Rios too!