The Strategy Checklist

Strategy is often thought of as an artform – an unstructured, intuitive exercise, propelled by inspiration and brilliance – a bit like conceiving and producing a memorable and emotionally powerful TV commercial. And certainly, there are moments in the strategy continuum that this kind of creative originality is critically important.

But just like finance, operations or even marketing, strategy is a functional discipline with tools, frameworks, processes, best practices and metrics, which are not there to replace or suffocate the creativity, but to actually enable it, guide it, nurture it, and make sure it produces tangible, meaningful outcomes.

Strategy is a process – from the highly personal, nebulous stage of defining a company’s values and vision, to the long-term planning stage of setting goals and priorities, to the unglamorous and overlooked stage of execution, coordination and results-tracking.

Just like finance, operations or even marketing, strategy is a functional discipline with proven tools, frameworks, processes, best practices, and metrics.

Experience has taught me that there is a predictable and reliable recipe for designing and leading a high-quality strategy process. A process that not only delivers a differentiating purpose, a solid plan and a mechanism to execute successfully – but most importantly, links all these elements into a north star and a narrative that stakeholders, both internally and externally, can understand, connect with and rally around.

I call it the “The Strategy Checklist” (see Figure 1.).

I drew inspiration from “The Checklist Manifesto”, Atul Gawande’s bestseller, in which he describes how even the most unstructured activities and the most experienced and talented experts benefit greatly, and ultimately owe their success to, structured and disciplined procedures.

Figure 1. The Strategy Checklist – an end-to-end process for developing and executing a compelling corporate strategy

There are three distinct phases to the Strategy Checklist:

1. Purpose – the vision for the future and the core values that define the company’s north star
2. Planning – the near-term and long-term objectives and roadmap for achieving the vision
3. Execution – the day-to-day processes, tools and metrics that deliver against the plan

At any point along the Strategy Checklist continuum, companies and their stakeholders can answer the all-important question ‘why’ by going back to the previous steps. For example: “Why are we prioritizing and running these initiatives?” … “Because they close the capability gaps and help us achieve our goals, our mission, and ultimately our vision.”

Similarly, at any point, to link high-level strategy with the concrete daily activities companies run, the question ‘how’ can be answered by going forward to the subsequent steps. For instance: “How will we achieve our vision and mission?” … “By hitting our strategic goals, as a result of executing our priority initiatives.”

1. Purpose

Most companies that have systematic strategy processes, usually jump – and really only do – phase 2 of the Strategy Checklist: planning. That’s why the corporate strategy process is most commonly called “strategic planning.” It’s kind of like the annual budget, but a little less frequent, and often a lot less consequential.

But planning, near or long-term, can be a rudderless exercise, if phase 1, purpose, is left unclear or completely undefined. Deciding what a company stands for, what it believes in, what it values, what it strives for in the long run, and making that clear to everyone – these are critical steps to having a strong culture, a differentiated strategic position, and a successful business. It defines the north star for the company and all its internal and external stakeholders.

There are three basic steps in the purpose phase of the Strategy Checklist:

• Values

If you keep asking “why” long enough, you eventually get to values. Values are the most deeply ingrained, beliefs and motivators. They are what defines people and companies. They are usually passed down by family, guardians and role models. They are deeply personal and rooted in emotions and principles.

Values are not about ‘what’ we do – they are about ‘how’ we do things, and ‘why’ we do them. They are the ultimate compass that steers our decisions and choices. The U.S. Marine Corps and The New York Times provide good examples of clearly defined, simply articulated values that don’t even mention what these organizations do – they motivate their people and guide their mission.

If you keep asking “why” long enough, you eventually get to values.

Values are usually established by the founders of an organization and are meant to be there ‘forever.’ As times or leaders change, values can be revisited or refreshed, but these tend to be rare, seminal occasions.

• Vision

This step is about envisioning the future we want to create and live in, the dreams we want to fulfill, the things we want to build and experience. The vision is an inspiration for all stakeholders, a beacon to keep referencing when formulating plans or facing challenges.

A clear and powerful example is Oxfam’s vision: “A world without poverty.” In 1980, Bill Gates formulated a simple, prophetic vision for Microsoft: “A computer on every desk and in every home.” His vision was realized probably a lot faster than even he ever imagined.

The vision is a picture of the future we want to create and live in, the dreams we want to fulfill, the things we want to build.

Defining the vision for the company is probably the most important thing a CEO must do. And because of that, it should happen as soon as new leaders take the reins of an organization. A vision should ideally be defined in ‘timeless’ terms to ensure its longevity and continued relevance. But even the most ‘evergreen’ of visions should probably be updated every 3-5 years, given how fast the world is changing.

• Mission

This step starts to talk about what the company does day-to-day, whom it serves, how it creates value, how it competes. It is more concrete and action-oriented than the vision – it describes the core activities the company performs in service of its vision. It also can refer to how a company defines and measures success, thus starting to make a connection with the eventual objectives and KPIs that will be established in the planning phase.

For example, The New York Times’s mission is “We seek the truth and help people understand the world.” And TED, the nonprofit that gave its name to short, poignant talks, synthesized its mission in true TED fashion: “Spread ideas.”

At any point of the process, the answer to ‘Why are we doing this?’ can be found by going back to the previous steps of the Strategy Checklist.

2. Planning

This is the most familiar and commonly practiced phase of the strategy process. Most companies have recognized that just budget planning for one quarter or one year ahead, while absolutely necessary in order to achieve their financial objectives, is not sufficient to ensure success in the longer run.

In this phase, the leadership team looks out at the appropriate strategic horizon – could be 1-2 years, could be 3-5 – and defines the top objectives for the organization and the major steps it needs to take to achieve them. All that planning, when phase 1 has been properly completed, should be done in service of the company’s stated vision and mission, and in keeping with its values and purpose.

• Goals

The first step of any planning process is to set objectives. At the outset of any strategic planning exercise, CEOs must decide on and communicate the goals the organization will need to attain to advance its mission and make meaningful progress toward achieving its vision.

Goals provide the bridge between the more abstract corporate vision and the concrete initiatives the company will have to execute as it moves forward. They have to be rooted in the ‘why’ spelled out in the purpose phase, and progress against them has to be observable and measurable to allow the organization to gauge its advancement and success.

• Capabilities

The next step, after goals have been set, is to conduct what strategists call a ‘gap analysis’ – what capabilities does the company need, that it currently lacks, or what does it need to do, incrementally or differently, in order to be able to achieve its goals.

Capabilities are usually described in ‘people, process, technology’ terms. And they can either be cultivated internally or acquired externally. To achieve its goals, a company may need new talent or expertise; it may require technology, tools or intellectual capital; or it may need new procedures, governance and management disciplines.

Defining the ‘gaps’ of strategic capability for the company lays the foundation for the actual initiatives and projects that the company will have to include in its strategic plan.

• Priorities

Once the required capabilities and actions to achieve the strategic goals have been identified, the most important step the leadership team must take is to assign priorities. Few organizations have the resources or capacity to do everything they plan, so setting priorities is key to success.

Most organizations are surprisingly deficient at this task. Competing agendas, pet projects, desire to please everyone all get in the way of effective prioritization. Which is why it is critical that priorities get decided at the top and clearly communicated down.

There are a number of frameworks that are used to assign different priority to initiatives, projects and tasks. The most common ones involve mapping initiatives on a 2-D matrix – either based on ‘importance vs. urgency’ or ‘effort vs. value’ – and prioritizing the most feasible and impactful activities. Taking sequencing into consideration is also part of this process, as certain activities may be dependent on others being executed first.

3. Execution

In many companies, the strategy group is not even tasked with overseeing and orchestrating this phase of the strategy continuum, which is a major miss. And often, no one is – execution is left to individual groups and managers, without any central process to track, coordinate and report progress against the strategic objectives.

Organizations that do this phase well have a Corporate PMO (Program Management Office) embedded in their strategy function and providing centralized administration, coordination and systematic tools for tracking and reporting on all strategic initiatives that have been prioritized as part of the strategic plan. It doesn’t have to be the rigid and bureaucratic structure many imagine when they hear ‘PMO.’ On the contrary – the best PMO units are intimately familiar with and invested in the business; they are flexible and client-service oriented; and they help business teams execute and meet their objectives as much as they track and administer the process.

• Initiatives

The first-order-of-business responsibility for a Corporate PMO is to help the team construct and formalize the Corporate Portfolio of Strategic Initiatives. This takes all the necessary activities that were identified during the capabilities step, overlays the agreed-upon priorities, and creates a project portfolio that becomes the embodiment of the strategic plan, and its day-to-day manifestation to the entire organization.

A well-constructed corporate portfolio of initiatives should rely on a collection of PMO tools and processes that ensure consistency and discipline of execution. Each initiative should have a formal charter stating its purpose and objectives, its main planned activities, milestones and success KPIs, its executive sponsors, steering committee, and team members. A RACI matrix as this one provided by Smartsheet (short for Responsible, Accountable, Consulted, Informed), is a critical tool to clarify who’s in charge, who needs to answer for what, and who is doing what.

In addition to formalizing the governance charters for each initiative, the Corporate PMO also should deliver an ongoing process for reviewing the portfolio as a whole, finding common threads and efficiencies among initiatives, and making sure teams in different silos running different initiatives learn from each other, make the necessary connections, and operate from the same set of priorities and strategic narratives.

• Tasks

This is the realm of day-to-day project management, utilizing detailed project plans, task lists, issue logs and risk matrices. Ideally, all initiatives that comprise the corporate portfolio should utilize the same discipline of PMO processes and tools, and be on one project management platform, such as Smartsheet.

At the very least, each project should have an assigned project manager who administers and populates a detailed project plan and issue log, conducts weekly (or whatever the right frequency is) calls, assigns tasks for execution or issues for resolution based on the RACI matrix, and produces all reporting, data and documentation required by the project sponsor and the steering committee.

Often the quality of execution of key initiatives is left to individual teams or business units who may or may not have the ability and discipline to deliver professional project management at the task level. That is a mistake. The investment in professional project management resources, who can be leveraged across multiple initiatives, is negligible compared to the cost of failing to execute as planned.

• Metrics

Defining and tracking success metrics is the final step of the strategy process. It is unfortunately often overlooked or reduced to just tracking obvious KPIs, such as revenue or cost, which are among the ultimate outputs of executing the strategy, but may not reveal whether the strategy is being executed in line with all the strategic objectives and values the company established in the earlier stages of the process.

Throughout the execution phase of the strategy process, the leadership team should be focused and constantly tracking their progress against the right KPIs. But what are those? The right KPIs close the loop between the highest aspirations and goals the team set in the early phases of the strategy process and the actual outcomes that the company is producing as a result of executing the strategic initiatives. If the results are achieving the company’s goals, fulfilling its mission, and advancing its vision, while living the corporate values, then the strategy is working. If all the initiatives are being executed, and yet the KPIs are not in line with the goals, mission, and vision, then something is broken.

For example, increasing ‘diversity’ or ‘learning’ may have been set as key goals that advance the company’s mission and vision. Then appropriate KPIs needs to be identified that properly measure the progress against these objectives. Just tracking revenues or earnings or market share will not shed light on the company’s success toward its diversity or learning objectives.

The best practical tool strategists use to manage this final stage of the Strategy Checklist is the balanced scorecard, first developed by US management thinkers Robert S. Kaplan and David P. Norton. It was initially introduced as an alternative to unidimensional performance systems that focused excessively on one metric, such as earnings per share or return on investment. It proposed a multidimensional view of a company’s performance, introducing a construct that involved a number of metrics along four key perspectives of the business: financial, operational, customer, and innovation and learning.

Since then, balanced scorecards have taken many forms, and leadership teams have been adapting and customizing them to their particular strategies and needs. The idea is not necessarily to follow the exact framework developed by Messrs. Kaplan and Norton, but rather to create a multidimensional performance measurement tool and populate it with the right metrics – the ones that clearly indicate whether the company is indeed achieving its strategic goals and realizing its vision.

The other critical tool to apply in this stage is OKRs (Objectives and Key Results). OKRs are that final step in the strategy continuum that aligns the compensation and incentives of individual company leaders and employees to the strategic goals and KPIs that were defined in the earlier stages. First introduced by Andy Grove when he was CEO at Intel, and later popularized by Google, OKRs are a simple, practical and powerful tool to standardize employee performance measurement, while connecting it with the company’s strategy.

At any point of the process, the answer to ‘How will we do this?’ can be found by going forward to the next steps of the Strategy Checklist.

Strategy is a journey that starts at a higher place with fuzzy concepts and emotionally charged beliefs. But ultimately it needs to get translated into specific, even mundane, tasks and actions that collectively, over time, result in the realization of the original vision.

It is much like the process by which the artistic vision and divine inspiration of an architect, such as renowned 19th-century Catalan modernist Antoni Gaudí, is eventually (after 144 years) realized by the daily toil of masons, bricklayers and stone carvers to produce the magnificent La Sagrada Familia cathedral.

The Strategy Checklist is a practical recipe to plan, organize and execute a cohesive and orderly strategy process that starts with the highest values and aspirations, translates them into specific objectives and plans, and employs disciplined execution tools to ensure the realization of the strategic vision.