tags: #publish links: [[Business Strategy and Competition]] created: 2022-03-11 Fri --- # Strategy Frameworks Frameworks for creating and structuring *sections of* a strategic plan. Read [[Good Strategy, Bad Strategy - The Difference and Why It Matters (Richard Rumelt)]] first! The frameworks below are best understood within the *diagnosis, policy, actions* overall structure from Rumelt. It's vital to understand that some of the frameworks below aren't a whole strategy on their own - e.g. if you create goals when you haven't done a proper diagnosis, it's highly likely you'll be outcompeted. See also [[Business Strategy and Competition]] for more tools and models. Some of the list below is from [this summary from Atlassian of strategy frameworks](https://www.atlassian.com/work-management/strategic-planning/framework). My analysis of the purposes of each one is better. ## Five Forces For *diagnosis* and market competitive advantage analysis. Full writeup: [[Five Forces framework]]. ## PEST Analysis For *diagnosis*, leading into *policy*. Full writeup: [[PEST or PESTLE Analysis]] ## SWOT This is for *diagnosis*, leading into *policy*. *Internal factors* where you have some control: **Strengths** **Weaknesses** *External factors* that are properties of the market or competition: **Opportunities** **Threats** ## Issue-based This is for *diagnosis & policy*, though this is quite narrow on its own and you probably need broader diagnosis analysis too. **What are the biggest problems our organisation is dealing with?** Identify the biggest issue(s) facing you and target strategic actions at that. ## Balanced Scorecard https://balancedscorecard.org/bsc-basics-overview/ - originally from Kaplan & Norton, Harvard. This framework focusses on communicating the execution part of the strategy as an overall picture. It's clearly *policy & actions*, not *diagnosis*. You must first get clear on *why* - or you'll create the wrong objectives. **Objectives** - What is the goal? (perhaps shown as a Strategy Map, below) **Measures** - What is success? Perhaps using KPIs. **Initiatives** - Programs to achieve objectives **Action Items** - Individual steps ### Perspectives The *balanced* bit means: getting your org to look at strategic measures not just financial ones. Hence, group objectives/initiatives by perspective or theme: * **Financial** or **Stewardship** - financial performance - budget, resource allocation - **Customer** and **Stakeholder** - performance for the customers and stakeholders - value, satisfaction, retention - **Internal Processes** - quality and efficiency of performance - efficiency, quality, compliance - **Learning and Growth** or **Organisational Capacity** - high performance enablers - Human capital, culture, infrastructure, tech There is also the concept of **Cascading** - a tiered strategy with local owners, with the four elements becoming more detailed, operational, tactical at the lower levels but rolling up to the high-level strategy. ### Nine Steps There's an accompanying *Nine Steps* system to create the plan (which includes space for *diagnosis* but no structure for doing it): https://balancedscorecard.org/about/nine-steps/ 1. **Assessment** (*diagnosis*) - Market, situation, enablers and challenges, mission, values, needs analysis (see Gap Planning below) - Execs agree on where we're going 2. **Strategy** (*policy*) - Value prop - A few **Strategic Themes** or highest-level goals - Group into Perspectives - Form an integrated strategy - how aspects synergise and multiply 3. **Strategic Objectives** - Outcomes - typically qualitative, continous improvement ones - Start with Strategic Theme level, then merge to form something whole-org level (so it's coherent) 4. **Strategy Mapping** - See below - cause-and-effect, dependencies, multipliers 5. **Performance Measures** - Typically KPIs - These will "drive" the outcome, connect objectives into operational / tactical layer - Leading and lagging measures 6. **Strategic Initiatives** - Develop projects to achieve Measures and Objectives - Prioritise - focus! Don't do everything at once. See [[Good Strategy, Bad Strategy - The Difference and Why It Matters (Richard Rumelt)#Focus and resource allocation]]. - **Rollout of steps 1-6** - Communicate to org, get people thinking according to the strategy, get them using it for decision-making - Framework includes a graphical one-page format for this - Note: this is rolling out *the high-level, exec-level layer*. The Alignment step that follows is how you cascade it down to team-level strategy. 7. **Performance Analysis** - Data and evidence, how you'll take corrective action - I'm a little unclear why this stage is positioned where it is. I guess it's about setting up the feedback mechanism that will be used once the cascaded strategy starts executing. 8. **Alignment** (Cascading) - Cascade from exec to org and team level. Create a new scorecard at each level. Perhaps even right down to individual people. 9. **Evaluation** - Periodically review and refresh - Evaluate whether it's accomplished results - Evaluate whether communication is working and alignment is being achieved - Continously improve the strategy planning and rollout system and its application ## Strategy Map Purpose: communication of strategy. This operates in the domain of *policy* and to a lesser extent, *actions*: shows **how objectives within the policy sequence and multiply together** to support the *policy*. (Caveat: see [[Good Strategy, Bad Strategy - The Difference and Why It Matters (Richard Rumelt)#Cost of complexity and coordinated actions]] and have a good think about how much coupling of actions you really want.) Usually used with Balanced Scorecard, above: https://balancedscorecard.org/about/what-is-a-strategy-map/ - List all the objectives. - Resolution: less than 20, simpler is better. See [[Nuanced communication doesn't work at scale - create one clear message]]. - Group by perspective or theme as above (e.g. in rows) - Perhaps group by Strategic Theme too (e.g. in columns) - Draw a graph of dependencies (or synergies) between objectives - e.g. does one need to be achieved first; does it *multiply* another? - Encourage information sharing and cooperation between dependent parts of org. You can also use this as a flowchart to show progress - colour objectives red, green etc. ## OKRs Like Balanced scorecard above, this is about *policy & actions*, not *diagnosis*. You must first get clear on *why* - or you'll create the wrong objectives. **Objectives** - Goal **Key Results** - Measure(s) that you'll create actions to improve, to guide your progress to the goal and tell you when you've achieved it. These will inevitably become targets themselves, so see [[McNamara Fallacy]] and [[Goodhart’s Law]] for pitfalls before choosing your measures. OKRs are typically designed to be ambitious and have some stretch opportunity. ## Gap Planning aka **Needs assessment**. **What's the difference between where we are and where we want to be?** This is mainly about *policy & actions* - a bit narrow in *diagnosis*, though diagnosis is much more visible than Balanced Scorecard or OKRs. **Vision** **Current state** **Gap** **Improvement** ## Not-Knowing Handling uncertainty more rigorously: [[Types of Not-Knowing]]