Creating a 5-Year Strategy That's Still Relevant in 5 Years
How many strategies created in 2017 are still relevant today?
With year-end approaching, many businesses are in strategy development mode. During this period, we waste time on assumptions, strategies created inside of a black box, and activities that lead to tactics (aka not strategy). These approaches to strategy always fail. Why? Lack of relevance.
When you craft a strategy that sets a uniquely relevant direction for your business, it should be lasting. Your strategy shouldn’t need to be rewritten every year. And yet, few businesses have created a strategy in 2017 that’s still relevant to their business today. When you write a relevant strategy, it will stick — for one year, five years, even sometimes ten years out. Here’s how.
1. Identify a fundamental need
This means deeply understanding your stakeholders, customers, and marketplace. In other words, go out and talk to people! First, talk to your business’s key stakeholders, including board members, advisors and line managers. Understand what the strategy means to them: What do they hope the business will achieve? What do they hope to personally achieve? Understanding the fundamental needs of your stakeholders enables you to write a strategy that will be inherently relevant to the people from whom you hope to get buy-in and support.
Next, talk to your customers. Understand them as humans and not just as consumers of your product or service. What do they value? What do they need? What problems are they trying to solve, and what do they hope the solution will achieve? Having a deep understanding of your customers enables you to create a strategy that is relevant to and in service of their fundamental needs. After all, you’re in business to provide your customers value.
Lastly, understand your marketplace. Understand what’s happening not only in your industry, but also in adjacent—even unrelated—ones. What’s changing in the competitive landscape? How are the boundaries of your market shifting? How are changes in other industries shifting consumer or market expectations in your own? Competitive pressure comes from everywhere, not just from known and direct competitors. Understanding these shifts will allow you to create a differentiated and relevant strategy.
By going out, talking to and better understanding your stakeholders, customers and market, you can have a better sense of their fundamental needs and build a strategy that’s relevant to them—not one that’s based on misguided assumptions.
A vision should be based on fundamental needs, because truly fundamental needs don’t change that often.
2. Have a strategic vision
A strategic vision is your organizational aspiration—a statement that articulates who you want to be when you grow up. It differentiates you from your competition, and it also acts as a guiding light. That guiding light will orient your direction five years out.
The best way to create a strategic vision is to take all the fundamental knowledge you just acquired about your stakeholders, customers and market, and use it to form a strategic vision that responds to those needs. Why? Because fundamental needs don’t change that often.
For example, a shockingly high number of insurance companies have set a strategic vision of “providing peace of mind.” While this is a good idea, it doesn’t set a direction or a vision that is highly differentiated or that has a fundamental and nuanced understanding of why people need insurance. When a company’s vision isn’t aspirational, differentiated or reflective of a desire to meet peoples’ needs, the subsequent strategies to achieve that vision are likely to look like a series of tactics that every other business in the industry is attempting.
Setting a vision that seeks to meet the real, fundamental and unrealized needs of your key constituents is the only way to produce a relevant and lasting strategy.
3. Inspire change through storytelling
This last step is all about telling a compelling story about where your business is headed and why. It’s necessary to get your teams inspired and engaged—they are, after all, the ones who will carry out your strategy!
It’s important to engage every member of your organization so that they have a sense of ownership in the strategy and can understand its relevance. While it may not be possible to give 30,000 individuals in your organization hands-on involvement, there are still ways in which you can engage them in a meaningful way. Engagement starts with sharing the fundamental needs that were uncovered in step one and also the strategic vision for the business identified in step two. This gives everyone a chance to check their misguided assumptions about the people the business serves.
Another important way to engage and inspire your organization is to do so continuously. We often hear about businesses sharing their strategy in a telecast once a year. But a one-and-done share-out, after which all employees and teams continue doing exactly what they were doing before, will not inspire change. Instead, tell your employees about the research that inspired the strategy, because it will get them inspired too. Share early prototypes that have been developed — the good ones and the bloopers. Disseminate validation-testing results — positive feedback, but also the solutions that resulted from the feedback.
By sharing the story about the strategy as it develops at every turn, teams have a chance to learn and grow alongside the strategy team. The very nature of this participatory storytelling is inspiring and engaging, and it imparts a sense of ownership. In other words, the strategy will have meaning to all teams, and not just to the team who set it.
Sharing the strategy as it develops, imparts a sense of ownership - it ensures that strategy has meaning to all teams, not just the team that sets it.
There you have it: the three-legged stool that all strategy rests on. Developing strategy shouldn’t be full of jargon and assumptions. It shouldn’t be developed by one team and exclude the rest. Strategy development is actually a rather intuitive endeavour, and when you follow these key steps, yours will be a relevant and lasting strategy.
If you need help creating relevant strategy, just hit reply or book a call and let’s chat!