Thursday, January 21, 2010

Strategic Planning Analogy #305: Act to Win

For Christmas, I received from my son a new board game which I had never heard of before. My wife and I opened up the game to see how you play it. Unfortunately, we did not immediately find any set of rules.

I assumed that the goal of the game is to win. Winning is nice. But if I have no idea of what I have to do to win, then the goal is pretty meaningless (and I cannot play the game).

Fortunately, I eventually found a piece of paper with the rules of the game on it. Now I know what to do.

Strategic planning is about finding a way for your company to win. Lots of the goals or mission statements companies write essentially express this desire to win. They aspire for things like being a “leader” in something, being “the best” at something or providing the “most satisfaction.” These are the way the companies define winning.

The problem is if you stop there. Then you are like the situation I was in with the game I got for Christmas. I knew I wanted to win the game, but I had no idea what I was supposed to do in order to win.

Just as that game was worthless without the rules of play, your business missions and goals are worthless if those in your company do not know what behaviors are needed to win.

Just because you tell people that the company needs to win by creating excellence at something does not necessarily mean that they will know what to do to make that excellence come about. You need to connect the goal to desired behaviors.

The principle here is that effective strategic plans outline and measure not only the final outcome (what winning looks like), but also provide an action plan of how to make this goal a reality (what to do).

To me, this seems pretty obvious—figure out what needs to happen and then make sure those things happen. Apparently, it is not all that obvious. The folks at Deloitte today held a web conference to teach what they called “Behavior-Led Strategy Execution” (BLSE). It’s a fancy name for saying that strategies need to be executed in order to be effective.

The BLSE process goes like this:

1) Make sure everyone understands the strategic goal.
2) Figure out what critical events need to happen to achieve the goal.
3) Figure out who are the key people or key departments in your organization that are most responsible for making these events happen.
4) Determine the key behaviors you want these key people to do to accomplish the key events.
5) Track and measure to see if the key people are doing the key behaviors.

In other words, give people the rules of play so that they know how to play to win. The typical rules of play that come with a board game tend to have five parts. We’ll look at each of those five parts and show how they would apply to a comprehensive business strategy/action plan (and help accomplish the BLSE).

1. Goal
Usually, the first thing the rules of play discuss is how you win the game. Usually winning comes down to either:

a. Getting the most (or least) points;
b. Getting the most money;
c. Finishing the game first; or
d. Outlasting your opponents.

Business equivalents could be something like:

a. Getting credit for the strongest brand image or most market share points;
b. Getting the most sales;
c. Being the first to capture a new market;
d. Consolidating the market in your favor.

If you don’t explicitly explain what winning looks like, then don’t be surprised when you don’t win.

2. Resources
Next, the game will tell you what all the pieces and parts are for playing the game. This will include things like the game board, playing pieces, decks of cards, dice, or whatever. You cannot effectively play the game unless you know what all the pieces are.

The business equivalent would be an understanding of the resources available to you and to others. Do you understand your own strengths and weaknesses? As in the Deloitte model, do you know who all of your key players are? Do you know how much manpower and financial resources you have at your disposal to achieve this goal? Do you understand the resources of your competition? Do you understand the “lay of the land” for the marketplace in which you are playing (your game board)?

The resources are all you have to win the game. Learn what they are and how to use them to your advantage.

3. Boundaries
Next, the rules of play for a game typically tell you what you can do whenever it is your turn to play. Certain actions may be allowed on that turn. Other actions may be unlawful. For example, in chess, you learn that each type of piece can only move in certain ways. A bishop can only move diagonally (any number of open spaces), but a king can move only one space at a time (but in any direction).

The business equivalent is an understanding of what behaviors are within acceptable bounds and which behaviors fall outside those boundaries. These boundaries may vary by individual in the organization. In the Deloitte model, it is an understanding of expectations for each of your key people (proper actions, improper actions).

It can also be an understanding of how far an individual can move before needing to seek approval. The idea is that movement is necessary for success. Unless the expectations for that movement are clearly outlined, you may not get the movement you desire.

This is not to say that you have to articulate every single step in minute detail. This is not about micromanaging. It is about setting boundaries and expectations.

4. Outcomes
The next section in a game’s rules of play is typically a description of how particular actions impact your ability to win. For example, if the goal of the game is to accumulate the most points, this section will explain all the ways you can gain (or lose) points. If the goal is to make money, it will explain all the ways to earn (or lose) money. If the goal is to finish first, it will tell you what actions speed up (or slow down) your progress.

The business equivalent is an understanding of which moves get you closer to your strategic goal, and which moves are counterproductive. In the Deloitte model, this would be understanding which behaviors you want your people to accomplish.

The idea is to connect actions to outcomes. This allows people to see which types of actions are most likely to lead to outcomes consistent with winning.

5. Keeping Score
If you want to know who won the game, then you’d better keep score. Keeping score during the game lets you know how well you are doing during the game (and how successful your style of play is). If your score is low, you may want to change your style of play.

Therefore, the rules of play let you know how to keep score.

In business, this is the idea of keeping track of how well you are achieving the desired actions. Are you getting closer to achieving your goal? A lot of businesses track financial performance. However, how many track action performance? Are the right things getting done? Who’s keeping score? This is also the important last step in the BLSE model.

Winning in business is a lot like winning when playing a board game. If you want to win in a board game, learn the rules of play. If you want your business to win, use your strategic planning process to create your rules of play. Before you can win at a game, you have to first play the game. Similarly, strategic planning needs to go beyond just defining success, but helping a company to play the game.

Over the Christmas holidays, I played a different game with my daughter which I had never played before. I studied the rules of play before playing, but it wasn’t until I actually started playing that I fully understood the rules. The idea here is that you will not perfect your playing skills by just studying the rules. You have to get in there and play the game. At some point you have to stop fine-tuning the plan and start playing the game.

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