Strategy CUBEOur approach to strategy development
We have developed our own approach from our experiences with hundreds of strategy projects: the Strategy CUBE. This consists of six steps.
The design brief forms the focus of the first step: which questions do we want to answer and within which frameworks do we work? When the starting point is clear, inspiration is collected and ideas are generated. We conduct inside-out and outside-in analysis and based on these, we brainstorm strategic options for the organization with the design team.
Steps two to four of the Strategy CUBE have an iterative character. Analyzes lead to ideas and ideas in turn lead to the need for additional analysis. This creates crystallized strategic options.
In step five, these options are assessed together and decisions are made. These decisions are summarized in one vision description and concrete goals and guiding principles. In the sixth step, the choices are further specified in actions, Performance Indicators en owners. The strategy is now ready for implementation.
1. Design brief
In the first step you determine the strategic challenges of the organization. We are a great advocate of problem-based working. Clearly formulated strategic challenges form a substantive guideline for formulating strategy. Analyzes can help to achieve good strategic challenges, but in our experience a (group) conversation with board and management is the most important. In almost all cases, the management of the organization has a clear picture of strategic challenges: the subjects that are threatening or, on the contrary, promising for the organization.
Design criteria form the framing part of the design assignment. They determine how broadly the organization looks, what focus it applies and how it defines success. What is the strategic space? How is quality measured? How will the strategy be assessed in the future? The design criteria form the frameworks against which the end result is tested and within which the strategist can make maximum use of his creativity to achieve a high-profile result.
2. Outside-in analysis
Insight into opportunities and threats
Outside-in analyses look at the organization from the outside. Their aim is to create a clear picture of the external context in which the organization operates and of the opportunities and threats. They also provide inspiration for the process of ideation around strategic challenges. With the outside-in analysis we look at the immediate environment of the organization and the macro environment.
With the immediate environment of the organization we mean the playing field, the arena, in which the organization operates. The playing field consists of parties such as customers, competitors, partners and suppliers. They have a direct impact on the organization. Valuable analyses are a competition analysis and a stakeholder analysis. An analysis of the immediate environment of the organization will in many cases reveal concrete opportunities, threats and strategic options for the organization.
An analysis of the macro environment looks at influential developments in the broader context in which the organization operates. For example, we look at developments in the field of politics, the economy, society, technology, ecology or demography. What will the new technological standard be? What will the society of the future look like? What is the impact of an aging workforce? If there are major uncertainties in the area future scenarios very helpful. They do not predict the future, but sketch pictures of what the future may look like.
3. Inside-out analysis
Strength and vulnerability
Inside-out analyses look outside of the organization. The purpose of the analyses is to gain a complete and clear understanding of the organization and its strengths and vulnerabilities. A good understanding of the strength and vulnerability of the organization is important in finding answers to strategic challenges. Strengths provide a good foundation to build strategic options on, whilst vulnerabilities can sometimes rule out certain strategic options. A good picture of strengths and vulnerabilities increases the sense of reality of strategic options that are being developed.
Business model and product and market portfolio
Two important inside-out analyzes should not be missing in this step. First, there must be a good understanding of it business model from the organization; of how the organization creates value for customers and stakeholders. We use the business model canvas for this. In addition, understanding the product and market portfolio is important to gain insight into the attractiveness and potential of products, services and markets.
4. Strategic options
Creative solutions to the challenges of the organization
Strategic options are the possible answers to the challenges facing the organization. This step runs parallel to the outside-in and inside-out analyzes. These analyzes provide inspiration to come up with solutions for strategic challenges. At the same time, thinking about strategic solutions leads to a new need for information and analyzes. Things need to be investigated to determine whether a strategic option has a chance of success. In other words, there is an iterative process of thinking, researching, thinking through and so on.
Logical thinking and creativity
Finding distinctive strategic options is a combination of logical thinking and creativity. It is important to clearly build on strengths, vulnerabilities, opportunities and threats from the analysis phase. But it is also important to create the distinctiveness and uniqueness based on intuition, feeling and creativity with which you can make a difference with the competition and for the customer.
Strangely enough, to give creative and lateral thinking space, it is very important to start with a well-defined strategic challenge and a number of clear insights from the various analyzes. Nothing gives a design team more energy than a clear assignment.
5. Strategic choices
Making choices based on design criteria
In step 5 of the CUBE, actual choices are made and these choices are translated into a strategic vision, guiding principles and strategic objectives. To make choices, you use the design criteria from step 1. The trick is to make a balanced set of choices in this phase of the CUBE that provide an effective answer to the strategic challenges and are sufficiently feasible. The balance between effectiveness and feasibility is crucial.
When there is a balanced set of choices, it is good to articulate the strategic vision for the upcoming planning period. The strategic vision specifies the direction that the organization chooses in the planning period. The vision is actually an intelligent summary of the underlying strategic choices. A good vision provides direction, inspires and is directly traceable to underlying choices. We are not in favor of determining a vision at the start of a strategy process. There is simply too little information available on which to base a vision and the chance that a vision will become unfocused, unrealistic or separate from the content is high.
Objectives and guiding principles
In order to make the vision sufficiently concrete, it is important to translate it into both strategic objectives and guiding principles. Strategic objectives indicate how the organization measures success. They relate to things that must be accomplished by the end of the planning period. They are often made quantitative, for example in terms of market share, innovation or growth. Guiding principles are the translation of the vision into the actions of employees. They are guidelines for behavior.
6. Strategic planning
From the broad outlines to concrete plans
In the last step of the CUBE, the emphasis is on making the strategy concrete and tangible, the actual planning. The strategic planning step is an important step, which is regularly not given enough attention. Organizations often go to great lengths to arrive at a new vision, but fail themselves in the concrete elaboration of strategic choices
In the implementation of the strategy, performance indicators indicate whether you are on the right track and whether you are moving fast enough. They allow you to learn from the results. We distinguish indicators for the result and for the effort. You use result indicators to steer towards the desired outcome of the strategic choice. Effort indicators explain how the organization intends to achieve the result.
Strategic actions describe concretely how the management of the organization envisions implementation at the time of drawing up the strategy. Timing and ownership specify when strategic actions are best executed and who or which department is responsible for their implementation. Developing a strategy down to the level of actions and owners has a positive influence on the ease of implementation and the ability to learn from results over time. The more a strategy is specified, the easier it is to determine why a result has or has not been achieved. Is it the choices themselves, is it the effort and the like?
Strategy map in OGSM
OGSM is a model for describing the detailed strategy of the organization. It stands for Objective, Goals, Strategies and Measures and describes the vision of the organization, the strategic objectives, the strategic choices, the performance indicators and the strategic actions.
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