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Measuring the Success of Your Strategy, Starts with Asking the Right Seven Questions

Most strong leaders realize that planning is a process, following an ongoing cycle, rather than a “one and done” event. The planning cycle often includes a variation on the following steps: analyze, plan, execute, measure, and adjust.

In “Stress-Test Your Strategy, The 7 Questions to Ask” from the November 2010 Harvard Business Review, Robert Simons offers up some insights on measurement and adjustment, the last two planning-cycle steps. The goal of his article is to help planners better identify the strengths and weaknesses of their strategy, and to provide insights on how to adjust accordingly.

Simon argues appropriately that bad times expose flaws in plans, but that you need to be able to find these flaws in good economic times as well. He goes on to say, “the questions may seem obvious, but the choices they represent can be tough and their full implications are not always immediately clear.” He suggests posing the following seven questions:

1. “Who is your Primary Customer?” Notice that the question is framed in the singular, not the plural. Without a laser-sharp focus you are bound to dilute your activities and under serve the people on whom you depend to keep your doors open.
2. “How do your core values Prioritize Shareholders, Employees, and Customers?” While each of these groups must be important, only one can be in first place. What have you done in your organization to be sure that everyone knows which group it is?
3. “What critical Performance Variables are you tracking?” The desire to measure often leads to seeking to track an overwhelming array of statistics, which often leads to analysis paralysis. More data is not better. Decisive data for select KPIs is the goal here. Do the numbers you track allow for flexibility in management or are they constraints on your team’s ability to take needed action?
4. “What Strategic Boundaries have you set?” A good strategy is as informative about what you will not do. Recall that any strategy is dependent on the resources available to execute it, so doing less better is frequently the goal. Apple’s Steve Jobs said it best. “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas.”
5. “How are you generating Creative Tension?” The leader of a winning organization needs to be able to make outside business pressures felt inside the organization, whether by assigning stretch goals, ranking according to performance, or setting spans of accountability that are greater than spans of control.
6. “How committed are your employees to Helping Each Other?” You need to be sure that your team assumes shared responsibility for the organization’s success. While there are many pieces to this puzzle, the two that stand out are trust and fairness.
7. “Which Strategic Uncertainties keep you awake at night?” There were, there are, and there always will be uncertainties. As a leader, you need to be aware of, monitor, and discuss these with your team. In order to have a vibrant and living strategy, understanding the uncertainties and expecting your team to report on them as well as on known variables is key.

The opportunities and ingredients for success are many. In each of the questions raised above, the implication is that the results from asking and answering these questions will be shared with your organization. Are you ready to do so? Here are some other questions to ask while stress-testing your strategy:

• Does everyone understand who the primary customer, or customer set, is? Does the team understand what this means in terms of how allocation of resources is prioritized?
• Does the team understand how you will make decisions when there are competing interests between and among stakeholders? When you tell them “no,” do they understand the value (and focus) of where you are saying “yes”?
• Are your metrics clear, concise, and easily understood by your organization? Are there enough to provide direction, but not so many that people spend all of their time measuring and not enough time doing?
• Are you clear in what you will not do? Are you clear that if you agree to move outside the boundaries, unless a new resource pool has emerged, that means that something that you were doing will now have to be stopped? Is your team willing to trade one initiative for another? . . . as a team?
• Is the tension that you are creating positive or negative? Is the team engaged or disillusioned by the tension? (Do they come into meetings ready to fight for their resources or ready to work together to create solutions with shared resources?)
• Is the mission of the organization well understood and does everyone know their part in making it happen? Do they also understand the roles others play so that they can provide support as appropriate?
• Is the discussion about both the “certainties” and the “assumptions about uncertainties” open enough so that people can provide insights into the changing landscape and can challenge both the knowns and the unknowns?

Ongoing challenging of the plan should be as important a part of your strategic process as developing the plan in the first place. Measuring and adjusting your plan requires asking the right questions to the right people at the right times — and expecting not only charts and graphs with known variables, but ideas for how to move forward in places where uncertainty looms.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.