Defining Strategy Outcomes

The self-help movie called “The Secret” has a basic message, “if you can’t name it, you can’t have it”. While I found a few things in the movie a little simplistic, I nevertheless believe it offers some wisdom that can be applied in executing business strategy. In effect, it underlines the vital importance of defining strategy outcomes.

I taught at Stanford University (in the SAPM) that defining and validating organizational outcomes was the most important thing a senior-management team should be doing at least twice a year. When I conduct strategy-review sessions, I always ask the chief executives: “what do you really want?” While this question seems almost too basic, it is often quite revealing to see how an organization’s success is defined by its senior leaders.

Why is defining outcomes important?

How many times have you completed an initiative, project or task, only to find that the result is not entirely what you or the customer expected? Or – more commonly – how many times have you seen additional expense and effort expended to correct the course of a project or action plan in its late stages?  Have you been in a situation where, having invested financially and emotionally in producing a solution, leaders then begin desperately searching for a problem to solve? This results in good money being thrown after bad, not to mention the strain on people who are forced to work on assignments that defy all logic.

It is my belief that defining the best attainable outcomes is fundamental to strategy execution and provides the focal point for building a good strategy map. By achieving clarity of outcomes, the organization’s portfolios and projects involved have a much higher probability of aligning their investments to execute strategy.

One profound impact of defining several strategic outcomes – and hence several alternatives – is that it forces the organization to select the most appropriate solution, rather than building a solution then looking for a problem. Good decision-making is based on having real alternatives from which to choose, and this requires different scenarios with different outcomes. The product of a good strategy is always being clear about which possible outcomes you are rejecting as an option.

Here are some examples of how outcomes can be used to lay the foundation for effective strategy-execution planning:

• Organizations can develop multiple strategic-planning scenarios based on several outcomes that are defined by a risk-reward matrix or many other comparative indices. These scenarios provide a viable strategy because a strategy with no options is no strategy at all.
• Organizations can build competitive objectives that build true differentiation, while avoiding imitation strategies with value chains that competitors find easy to imitate.
• Organizations, portfolios or projects can identify radically new products or improve current service offerings to create or maintain customers.
• Organizations can select or create an appropriate business model to deliver those products and services that is based on their core competencies and execution capabilities.
• After implementation, it will be easier to identify defects, because clearly defined outcomes also serve as a basis for defining the organizational-performance scorecard.
• Dialogues built around well-defined outcomes develop a shared consensus with the people who are going to execute the work.

Other benefits of clearly defining outcomes include:

• Clarity of outcomes comes before organizational alignment; clear thought precedes effective action.-With a clear end in mind, resources are not wasted on developing solutions that fall short of expectations, or are not adopted.
• Organizations can develop a competitive advantage by seeking to differentiate themselves. For portfolios and projects, this is a way to develop alternate configurations while using existing capabilities.
• It provides the “success root” information to build a coherent strategy-execution map and a clear set of interdependent and specific goals and objectives.
• It allows the execution system to be portrayed visually, with business logic, to achieve the outcome.
• It enables collaboration as people apply their energy and creativity together in the same direction.
• Prioritizing and funding projects become more rational exercises. Well-defined outcomes are a powerful way to gain both funding and sponsorship.

Throughout history, having a clearly defined outcome to unify a nation was often a matter of life or death. There are many examples of a country’s armies conquering entire nations because it was more disciplined and focused than its opponents, and not torn apart by internal strife. In modern-day corporations, when outcomes fail to unify people, it is visible in lost productivity, through lowered morale and employee turnover.

What is the process for defining strategy outcomes?

Whether outcomes are defined at the organizational, portfolio or project level, the exercise requires people to collaborate and agree on the facts or opinions that are being presented as a basis for making a decision. Some organizations and projects may get away with a single decision-maker, or a command-and-control approach to developing outcomes, but this is becoming rare. In our complex “flat world”, risk is better managed by the wisdom of expert cross-functional teams and people who actually know how the work will be executed within an organization’s systems.

To ensure effective collaboration in developing outcomes, a well-defined, quality decision-making process is required. Two things are critical:

1. A personal awareness of your own decision biases. The ability of a group to consciously use the diversity of each member’s strengths will build a better dialogue.

2. Effective group facilitation. A neutral facilitator will manage a group’s energy, allow participants to focus on the issues at hand, and avoid the potential biases that could develop.

I suggest the following process for generating outcomes:

• Understand the internal and external contexts in which the strategy outcomes need to be defined. Research and study the current realities of the organization’s capabilities and market urgencies.
• Move towards a fact-based approach to determining customers’ definitions of value and define key uncertainties that must be modeled for the degree of their economic impact.
• Understand the culture and power structure in the organization; understand when and how decisions are made, including command-and-control versus collaborative decision-making.
• List all the stakeholders and people with influence who will participate in defining outcomes, including external competing stakeholders (by proxy) that can make your outcomes obsolete.
• Use workshops to create a structured strategy-execution map and get participants to agree on a process of multiple iterations before deciding on the final outcomes and definitions.
• Validate the outcome as necessary with each stakeholder and person of influence separately, to ensure buy-in and to define any uncertainties that surround the outcome. A good outcome has a good story behind it, so tell it!

In summary, if you can’t name it, you may embrace the Zen philosophy of “the un-aimed arrow never misses”. In this case, I would say, “let’s go to the beach!”