Because forming a strategy requires alignment across many stakeholders, it is impossible to arrive at a defensible, cohesive strategy without performing workshops with relevant senior stakeholders. Any strategy workshop process must contain the following 5 steps, often in roughly this order:
- Defining outcomes (workshop). 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 house 20,000 homeless individuals.
- Research and diagnosis (workshop and analysis). 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.
- Ideating initiatives (workshop). Initiatives are the ways to achieve our strategic outcomes. 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 the strategic objective/outcome is to hit $100M in EBITDA, then each initiative should contribute $30-40M to the bottom line.
- Prioritizing initiatives (workshop). Initiative ideas are scored as quantitatively as possible. (At Gaussian, we use Impact versus Feasibility, which add to give Priority.) This apples-to-apples scoring allows 2-5 multi-year initiatives to rise to the top, which should combine cohesively form the pillars of the strategy.
- Vetting and approval (workshop and presentations). Communication is key to achieve buy-in. One way to do this is to combine the top initiatives into a single cohesive Strategic Statement, and then review and adjust it if necessary once you get feedback from stakeholders. The Strategic Statement, along with the backup prioritization table, should be presented to the board, ownership, or both, to get final ratification and approval.
...followed, of course, by strategy execution.
For more detail, read the guide to strategy planning workshops—or check out our video series explaining each strategy planning step—but here's a summary: