The Four Audiences for Strategy (or Why Am I Creating a Strategy Again?)

I regularly see that developing strategy is viewed as an inconvenience that takes people away from doing their real jobs. Sometimes strategic planning becomes a rote process that organizations do at a particular time of year. Or maybe you're developing a strategy because your boss asked for your team's strategy and you didn't have a good answer.

But if time is money, why do organizations invest precious resources in developing strategy?

What's the point of developing strategy?

To answer this question, look at the four audiences for your strategy:

1. EMPLOYEES - People who are engaged in their work perform better. One of the keys to being fully engaged is to have a meaningful vision of the future and way to get there that's believable. Get your team involved in the process of developing strategy and then communicate, communicate, communicate the results with them. On top of engagement, the strategy will guide your employees in the hundreds of decisions they make (some big, most small) on a weekly basis.
2. BOSS/BOARD OF DIRECTORS - It's important that your boss (or BoD) believes in you. This is part of "managing up". You need the support of your superiors to be successful. Develop a strategy that aligns with the bigger goals of the organization. Make your boss/board/superiors look good and help them to achieve their goals.
3. INVESTORS - I use this term loosely. In the case of a business, you may have outside investors. For a team within a larger organization, think of your investors as those who control resources. You have to show them that you have a compelling strategy for achieving success in order to get access to the resources (money, people, tools, mind share) you need. 
4. YOURSELF AND YOUR TEAM - This is the CORE of why you develop strategy! The strategy creates the foundation for how your team will operate. What things will people work on (and, just as importantly, NOT work on)? How will individuals and the team focus time, money and other resources? (A good reference is Principle 1 in the Bain article Strategic Planning That Produces Real Strategy.) What metrics will you track to measure progress and, ultimately, success or failure? 

Two final notes to leave you with. First, be explicit with the four audiences about why you are investing the organization's time and resources in strategic planning. Address head on the toxic mindset that it's a waste of time. You need the smartest minds as engaged in the process as possible!

Second, be sure to think through your audiences at the beginning of your strategic planning process so that the resulting strategy will be viewed as positively as possible by all stakeholders. No one wants a "meh" strategy or one that gets put on the shelf without impacting the organization. Go build a great strategy that produces great results for your organization!

The One Question You Must Answer Before Setting Strategy

To illustrate this point in advance, let's start with a quick exercise. For the next minute, brainstorm ideas on how you could make $10 cash (or €10 or £10) in the next 4 hours. Go ahead. I'll wait.

Ready?

Some of the typical responses I hear include washing cars, delivering lunches and begging for money. Here's the "a ha" follow-up question:  Which of your ideas could you turn into a $1 million business? How about $10 million or $100 million? I'm still waiting for the day when someone jumps up enthusiastically and runs out of the room to pursue their brilliant idea!

How the question is framed shapes your thinking and, therefore, the outcome. The same goes for strategic planning.

So the one question you must answer before setting strategy is

"What is our goal?"

Is the goal to grow the business to $10 or $100 million? That's the difference between grabbing a bucket and sponge to wash cars and creating a highly valuable, scalable, differentiated product.

Is the goal to achieve market share of x% or profitability of y%? That's the difference between Google's strategy to maximize Android market share (according to Statista, Android market share is approaching 90%) and Apple's strategy to maximize profits (according to Strategy Analytics, Apple Captured Record 91 Percent Share of Global Smartphone Profits in Q3 2016). Yes, I know that this isn't exactly an apples-to-apples (no pun intended) comparison, but you get the idea.

To get to the best possible outcome from your strategic planning process, start by getting all of your stakeholders aligned on the most important question to answer:  What is our goal?


[P.S. I'm pretty sure that I did not come up with the $10 strategy exercise above...but I can't remember the source and I can't find one. I'm happy to acknowledge the source if anyone knows it.]