Defining Organizational Strategy: Keys to Successful Transformational Change
Recent research from McKinsey and Company says that 70% of all transformational change efforts fail.
That’s huge! Almost unbelievable.
Most organizations talk about change, but many times the change efforts fail because they want the change to happen yesterday. However in reality, real change takes patience, energy, time, and a strategy. Successful transformations have to be led by an ecosystem of leaders across the entire organization. But, just as importantly, they need to link the change to the strategy, mission, and vision of the organization. Creating a clear line of sight for employees to understand how the change effort fits is imperative.
Questions to Ask
If you can answer the questions why we exist, or why we do what we do, it’s much easier to develop a strategic direction, which can then have strategic goals, priorities, and actions attached.
The goals are the big picture, but more specific than the organizational strategic direction. Goals help determine what you need to focus on to align with the strategy.
A company should have no more than five strategic goals to support the big picture. While it may seem like a small number, if they are truly strategic, then they will likely pack in a great deal of work to achieve them. The priorities aligned to the goals might change from year to year or department to department, but the goals remain the same throughout the strategic planning cycle.
So, we have an organizational strategy, with four or five strategic goals underneath it, and each goal needs to have a subset of priorities. It’s after the priority level that the organization can then start looking at some tactics on how they’re going to win their goals and actually further their strategy.
Usually where organizations run into difficulty is in the priority stage. They tend to want these to be actions. For example, they may decide they need to conduct a process improvement exercise in accounting. which is an action. The priority would be more aligned to something like “create efficiencies by streamlining processes throughout the organization”. Creating efficiencies through process improvement would likely be a transformation change effort, and as we said above, it will take patience, energy, time, a strategy and alignment to execute properly.
So the question becomes, what is the priority that the action serves? Remember that, unlike the strategy and goals, priorities may change over time, especially if your plan is a three to five-year plan, which is pretty standard. The priorities are important because the actions below them will be different across departments.
Then, what is the most important thing to focus on to attain the strategic goal? The actions need to fit under the priority. Every action that you take needs to link to a priority. If you can’t find how the action fits, then you probably shouldn’t be doing it.
What does all this look like in practice?
You have an organizational strategic direction that provides short to medium-term focus for the organization. It’s not the vision, which is a really important differentiator. The vision is a long-term view and should be almost unattainable, but a strategic direction is attainable albeit it should be a stretch to do so.
Next, you need to create four or five strategic goals that will support that overall strategy.
The following step is to set your priorities. The priorities are narrow in focus and support the goals, but they’re not tactics but rather higher level buckets of activities.
Actions or tactics are the final piece of the puzzle, and every action needs to fit snugly under a priority, or it shouldn’t be done.
Once you’ve worked out this structure, the rest of the pieces will start to fall into place.
As you begin to execute on your strategy and working toward your goals there are two questions you can ask yourself when making decisions,
- Which goal does this decision influence or affect?
- Will this decision take us closer to or further from that strategic goal?
This is a simple test and a brilliant way to keep the organization and departments focused and aligned to the strategy. This practice of linking all decisions to goals takes discipline, time, and energy to ensure it happens. The two questions should almost become an organizational mantra. The Satori Model
The Satori model is a systematic process and an excellent tool to start broad and then narrow the focus until there’s a roadmap for the entire organization to follow.
If you do it right and follow-through, the transformational changes (or smaller changes that are determined necessary) won’t fail. Why? Because they’re part of a process that’s defined and mapped out in the actions that support it.
It’s not as easy as it sounds. Strategy takes some discipline.
Incorporating Mission and Vision Into Organizational Strategy
The last piece of the puzzle is where the mission and the vision fit in. if the vision, mission and values exist theSatori Model waits until the end of the [planning process to vet them against the strategy by asking:
Do the goals and priorities of your organizational strategy support your mission and vision?
If the answer is yes, then you’re done. If it’s no, then it is time to revisit the organizational mission and vision to ensure that they are fundamentally correct. Sometimes the mission or vision will change and the best way to double check is once a strategy has been locked in. We want to make sure that they’re current, and that we’re working toward them. Revisiting the mission and vision as the end tends to remove what can end up as a wordsmithing exercise that often derails the planning process.
At this point, the only thing that’s missing is engaging and rallying the workforce around the strategic plan.
We know for a fact that individual contributors are more engaged when they have a clear line of sight as to how their role fits into an organization’s strategy. Bringing the plan to the departmental level will engage them and create department level actions that fully support the plan.
If you can align compensation structures around the plan, and then link individual and departmental activities to the plan. It’s a win-win for everybody.
While we’re going to talk more about the continual process of cultivating buy-in for company strategy through accountability and communication in the future, this is the necessary foundation to build-on.
Jennifer Long and Sandi Verrecchia are the podcast hosts of Organizational Transformation Kung Fu. As Leadership Coaches they believe that transformation takes time, energy and practice to take root and become embedded as successful change within organizations. Much like the ancient art and practice of Kung Fu, transformation is a discipline.
Jen is the owner of Management Possible® focused on training and coaching multi-level management and leadership individuals and teams nationally and globally. Sandi is the owner of Satori® Consulting inc. a global consulting firm focused on helping organizations solve complex problems in strategy, leadership and governance.