How to Run Strategy Workshops in 5 Steps

Leaders all agree that strategy is critical to success, but are sometimes unclear on the how to bring stakeholders together to create one through a series of strategy workshop. Running a smooth set of strategy workshops is critical to strategy planning and to arriving at a strategy that leadership can be confident in.

Motivation for strategy workshops

Across all the definitions from management consultancies, academia, and business journals, strategy is defined as a communicable plan to maximize and sustain the most important outcomes. What's critical in that definition? Outcomes, maximization, planning, communication. For more information about what makes a good strategy, see the video "Elements of Good Strategy."

Because forming a strategy requires alignment across many stakeholders, it is impossible to arrive at a defensible, cohesive strategy without performing working sessions or workshops with relevant senior stakeholders. And (while it goes without saying) it is impossible to "not have a strategy" as this paradoxically is a strategy in and of itself.

Any strategy workshop process must contain the following 5 steps, often in the following order:

1. Defining outcomes
2. Research and diagnosis
3. Ideation
4. Prioritization
5. Vetting and approval

These 5 steps are occurring, explicitly or implicitly, in every strategy planning process. If these steps are not observably occurring, they actually are occurring but in fragmented, disjointed and unaligned ways across stakeholders.

Each of these steps may be a workshop or a working session, or several may be combined into a single workshop, depending on availability of stakeholders. These steps may occur in a cycle, for instance every year, in the case of annual strategy planning.

Step 1: Defining outcomes

Outcomes are the measures of success in an organization, and are the cornerstone of strategy planning. For example, hit $100M in annual runrate revenue, or reach a $50M valuation. Some tech leaders call these "audacious goals."

Outcomes define how big our strategy needs to be. For example, a company targeting $10M in revenue will have a vastly different strategy to one targeting $10B within the same timeframe. For that reason, outcomes do not need to have a strict timeline, but rather a time horizon, for instance 2-5 years. Outcomes are a reflection of the goals of the shareholders, board, or mission stakeholders (in the case of a non-profit). For a public C-Corporation, the owner goals are clear-cut: maximal valuation. For other organizations, you might need more nuance and consideration to arrive at the right outcomes.

A repeatable method for arriving at outcomes can be to perform 2 activities:

1. Shareholder / Stakeholder Goals and Needs
   (a) What are the needs of the shareholders/stakeholders of the organization, in the very long-term?
   (b) How much progress has already been made?
   (c) What are "80-20" methods to realize these goals and needs in the short/medium term?
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2. Organizational Outcomes Mapped to Shareholder / Stakeholder Needs
   (a) Choose primary metric(s), driven by shareholder/stakeholder goals
   (b) Layer in comparisons and benchmarks for this metric
   (c) Choose secondary metric(s)
   (d) Iterate to refine the outcomes

Participants

Owners, board directors, and/or shareholders with 20%+ equity. For non-profits: the executive director, board/trustees, and any key stakeholders of the organization's Mission.

Number of sessions

1-2

Step 2: Research and diagnosis

A good strategy is an informed strategy. That's why the second step of a strategy workshop process is research and diagnosis

For a strategy to be holistic, research and diagnosis must cast the net wide, covering:

1. Internal strengths and weaknesses, for instance from customer insights or organizational maturity assessments
2. External trends, opportunities, and threats, for instance from competitor research, market reports, or expert calls

The purpose of research is to help identify ideas for new strategic initiatives—and to understand how big or feasible they may be. For instance, if competitors have expanded to China and seen China sales make up 20% of their business, an idea for your organization is to do the same.

During this phase of strategy planning, leadership will both collect the insights and research conducted since the last strategy planning session, and request any new research and diagnosis necessary.

Research may be happening continuously (for instance if there is a dedicated Strategy or Research function), or may happen solely during strategy planning.

Participants

Executive team, research departments (eg User Research), Strategy department, Biz Ops, CX/Sales/Business Development, Corporate Development

Number of sessions

No workshop sessions (this step requires research, surveys, analysis, etc, which can take place offline).

Step 3: Ideating initiatives

A common mistake is to prioritize a strategic idea as soon as you have it. This is not optimal, as in the heat of the moment, you won't have the necessary context to understand the quantitative priority of an idea. That's why the third discrete step of strategy planning is ideation.

What is it that is being "ideated"? We can call them opportunities or initiatives, depending on whatever resonates best with the organization. Initiatives are the ways to achieve our strategic outcomes. For instance, different initiatives and maneuvers to reach $100M in revenue. Roger Martin puts it nicely: "where to play, how to win."

Good initiative ideas must big enough to make "meaningful progress" against the outcomes you need. At top organizations, only a small number of cohesive, interlinked initiatives are selected and meshed into a strategy. As initiatives are driven by the outcomes, they must also have the same time horizon as the outcomes. If your outcome demands an additional $50M in annual revenue, then each initiative should contribute $10-20M.

Some potential categories for initiative ideas:

• Product and experience
• Channels and go-to-market
• Expansion (eg geo)
• Contraction (eg cost cutting)
• Operations, support, delivery, customer success
• Governance and regulatory

In the ideation step, leaders pull in the initiative ideas uncovered in research, and, in an unrestrained way, add new ones. Remember to cast the net wide—it's better to capture an idea and later deprioritize it than to ignore the idea and have it gnaw it you later. If an idea seems small, ask yourselves: is this part of an existing idea? Or is there a generalization of this idea that is bigger?

Ideation can often happen in 1-2 whiteboard working sessions with some offline pre-work. Once a strategy is in place, however, ideation can occur freely—for instance, through addition of new initiative ideas to a spreadsheet shared among an executive team.

Participants

Owners, board directors, and/or primary shareholders. For non-profits: the executive director, board/trustees, and any key stakeholders of the organization's Mission.

Number of sessions

1-2 (and later, continuous)

Step 4: Prioritizing initiatives

In the previous step, ideation, we said that strategic initiatives are high-level tactics and approaches to make meaningful progress against our desired outcomes. We also talked about why ideation and prioritization have to be separated—ideation must be unrestrained and creative while prioritization must be analytical. With ideation handled, we now tackle the prioritization and selection of strategic ideas.

Defensible prioritization is critical to a good strategy plan, otherwise getting (and maintaining) buy-in will be hard.

There are many frameworks for ranking and prioritizing, so we'll share a simple one here: impact and feasibility.

1. Score an idea's expected impact low, medium, or high—1, 2 or 3—based on the risk-adjusted impact it would have on your desired outcomes. Be quantitative—if your desired outcome is an additional $10M in annual revenue, then "high impact" should be $5M+ of revenue, "medium" should be $2-5M, and "low" should be under $2M]
2. Score feasibility low, medium, or high—1, 2 or 3. For simplicity, feasibility scores can be relative to each other, but in complex setups, you may calculate this using time and cost drilldowns
3. Adding impact to feasibility gives you Priority
4. Look at your 2-5 highest priority initiatives. If they cohesive, achievable, communicable, and obey the other elements of good strategy we talked about earlier, then you're looking at the components of your organization's new strategy. If not, you may need to adjust your initiative ideas, splitting and splicing them and then re-prioritizing.

Prioritization can often happen in 1-2 working sessions with some offline pre-work. Sometimes, to get more precise and quantitative, teams may need to conduct more research before reconvening.

Participants

Owners, board directors, and/or primary shareholders. For non-profits: the executive director, board/trustees, and any key stakeholders of the organization's Mission.

Number of sessions

1-2

Step 5: Vetting and approval

The top priority initiatives that comprise your strategy should be combined into a single cohesive Strategic Statement, and then all relevant stakeholders should hold a working session to review and adjust it if necessary.

The Strategic Statement, along with the backup prioritization table, should be presented to the board, ownership, or both, to get final ratification and approval.

Let's take an example. Let's say we defined a multi-year outcome of $100M annual runrate revenue. And our top strategic initiatives ended up as:

1. Triple inventory through third party products
2. Significantly reduce expense per product launch to increase product launched per quarter
3. Expand to China with existing/new portfolio

This could imply a 2-5 year strategic statement of:

Scale Our Reach—rapidly grow our marketplace with third party products and adopt a repeatable launch model to expand to China while improving efficiency in the US

Vetting is critical to a good strategy. Read more about about communicating strategic plans and getting buy-in.

Participants

Owners, board directors, and/or primary shareholders. For non-profits: the executive director, board/trustees, and any key stakeholders of the organization's Mission.

Number of sessions

1 workshop session for Strategic Statement, followed by numerous conversations with stakeholders for vetting and approval.

After the workshops: Execution

We walked through the first 5 interlinked steps to strategizing—defining outcomes, research, ideation, prioritization, and approval.

But it's meaningless to build an approved strategy deck in PowerPoint and let it rot on your shared drive. Strategy must go hand in hand with execution.

A cohesive strategy must be broken down into lower level initiatives and outcomes that teams can execute against and be held accountable to. For instance, a multi-year strategy may concretely define the outcomes of an annual strategy, and an annual strategy may define the outcomes required for the next quarter

Let's take our example. We've defined a multi-year outcome of $100M annual runrate revenue.

We have a 2-5 year strategic statement of "Scale Our Reach—rapidly grow our marketplace with third party products and adopt a repeatable launch model to expand to China while improving efficiency in the US".

This may break down into multiple lower level outcomes we need to hit within the next year—for instance:

• Onboard 1 new third party product vendor
• Achieve $1M in revenue from China from existing product portfolio
• Reduce average design-to-launch time to 3 months

Each of these outcomes could have one or more initiatives, such as "hire dedicated business development team."

By having this connectivity from your strategic outcomes all the way to the initiatives that your teams are working on, you can massively improve transparency, confidence in the strategy, and performance against your multi-year objectives.

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By following this sequence of workshops, your leadership team can construct a bold yet defensible strategy plan that will align teams over multiple years while remaining executable. For teams that have more intricate, multi-stakeholder needs, learn more about Gaussian's advisory services and growth strategy workshop facilitation.

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Photo by FORTYTWO.