Determination of residual strategy gaps against your projected environment

Research is as relevant to your discussion as it is to your strategy. Sounds simple, until you think about how many times you have sat in a room going through pages and pages of research that you can’t correlate back to any kind of decision that will impact your business. In those cases, we know that we are either missing something obvious or the research function has not integrated their deliverable outputs to the business. Strategy and research need to become the two inseparable twins that enable each other and feed each others success.

Let’s not forget about the often ignored triplet, risk management. The function of risk management is inherent in the analysis of the business environment, projected business environment and strategy management process. It’s all one conversation, these things cannot function effectively on their own. Once you have created a perspective across your major focus areas (and possibly a macro focus area) around the business environment factors supporting and resisting your success, these factors need to be projected into a set of assumptions about where these factors are moving. This is a highly useful form of risk management, which needs to be partnered with other dimensions of an overall program but is a key integration point with research and planning.

The point of this discussion is to identify an opportunity often missed:

There are lots of great discussions on the road to this point, however once you are here – don’t forget to determine the residual strategy gap between the existing mitigating initiatives and core strategies and the projected future environment. Risk is not only created through the external forces of a business environment or the creation of corporate strategy, but ignoring implementation risks as your organization creates assumptions about the future environment. This is a perfect opportunity to eliminate those implementation risks as this new information becomes available.

Just another opportunity to stay ahead of the curve.

Balancing the art and the science of metric analysis

There’s an art and a science to the management and analysis of measures. Some people seem most happy converting the mass of numbers into composite scores and overall indicators, while others seem to have no formula to their approach whatsoever. I believe the secret to this whole conundrum is to realize that there’s a trap in both extremes.

On one side of the coin, there’s using the scorecard to justify past and current performance and for the purpose of visibility. Further down this road, there’s taking the data and converting it into composite scores which can be used to determine variable comp pools and overall corporate performance categorization. This can be extremely useful as a tool, provided that the focus doesn’t boil down to your organization avoiding any depth of analysis as to what the data means. What factors are acting on the organization, internally and externally, both positive and negative that are supporting or resisting your ability to be successful?

It is entirely possible that your corporate performance in a specific measure could look stable, while the environmental factors have reversed. In the case where the external environment is supporting you and the internal is a challenge, and the factors completely reverse… you may not see a change in figures while a new risk could be growing unmitigated. Subject matter experts within the organization need to be engaged to analyze and share the environmental factors and potential impacts of the changing business environment on an ongoing basis.

The opposite trap is that not enough math is introduced to the overall system which limits the ability to integrate the results of your performance into other systems such as variable comp or performance management. There is a time and a place for analysis and summary. If your organization is having trouble getting into a good discussion of depth at your strategy review meetings, keep your math behind the scenes.

Finally, keep your corporate scorecard outcome based, with a focus on transformational measures. Measurement creates focus, which creates action.