According to leaders of successful organization transformations, leading transformation is at its core a strategy process. A Focused Strategy is the third component in the Leadership System. The job of strategy is to translate the stakeholder needs and the compelling directive into a business model with clear, actionable goals, objectives, and initiatives. A complete strategy addresses the customer (products, channels, and relationships) and the value chain and support operations including all six stakeholder groups. Some organizations have added the natural environment as a “veneer” layer of initiatives to address specific environmental issues. This IS progress, and many initiatives make significant contributions toward a sustainable enterprise. The next step is to integrate the natural environment into the strategy process.
The Design Challenge
An effective strategy process is designed to address all the key stakeholders and aspects of the organization. The designer of a strategy development process has to address several challenges including creativity, complexity, and the amount of structure that is optimum for the task of strategy development. First, we have yet to develop a strategy process where you can simply “turn the crank” and produce a viable strategy that will “win” in the marketplace or fulfill your mandate if a government organization. Second, the development of strategy is inherently a creative process and thus needs just enough structure to facilitate group creativity and no more. The design challenge is to develop the best questions for the strategy process to ask; the best sources of data and information; and the best formats, displays, and analysis methods for the inputs to facilitate the development of the strategy.
There are three areas to consider when integrating the natural environment into the strategy process including the sources of energy and materials, how the energy and materials are used, and the waste produced.
- Change the energy and materials sources and supply chain
- Change the value chain’s energy and materials usage
- Change the organization’s energy and materials waste
These three categories of options are applicable across the value chain of the organization. The table identifies more specific options and consideration at the various stages of the value chain including supplies, logistics, operations, customers, employees, and investors.
Integrating the table into the strategy development process can help identify goals, objectives, and initiatives to address the areas of greatest impact and return on investment. All too often we identify many more opportunities for improvement than we have resources to address in a particular strategy cycle.
Evaluate and Prioritize
To help the strategy team prioritize initiatives create a selection matrix with the following criteria.
1. Contribution to Strategy
- Percentage of energy from a particular source
- Expected reduction in energy usage
- Expected reduction of greenhouse gasses emitted
2. Financial Impact
- Estimated cost of initiative
- Expected savings
- Anticipated increase in revenue
- Risks of doing the project
- Risks of NOT doing the project
Incorporate a rating system for each criterion and organize the results in a table that allows for the comparison of the initiatives by each criterion and the overall score. While some are tempted to turn this exercise into a mere mathematical process, the math is not usually accurate or comprehensive enough to make the decision for you. The value of the matrix is in how it helps facilitate the strategy team dialogue and decisions. Once you have a focused strategy, the next question is how do we enable, empower, and engage our talented workforce to deploy the strategy. See you next week.
Enjoy the journey,
Also published on Medium.