I’ve recently been sharing how you can carry out a 6-Day Strategy for your business. I’ve already covered Day 1 on your Current Position, Day 2 on Future Possibilities and Day 3 on Setting the Direction. The focus on Day 4 is to determine the organisation that will be required to deliver your new, emerging strategy.
Some new strategies demand major organisational change. Topps Tiles, for example, established a completely new commercial and contracts division when they identified significant non-retail growth opportunities in the UK tile market. Other strategies require more incremental change. I worked with a small, natural beauty business, for instance, where our organisational assessment simply identified the need to recruit higher levels of commercial talent, embed better engagement across organisation and implement a new management information system.
One thing’s for sure: any new strategy will demand changes to your organisation. And getting the future organisation right will be critical to your chances of success. There are two questions for you to answer at this stage of the strategy process: (1) What are the critical capabilities you need to create and develop? and (2) How well set is your current organisation to deliver the new strategy?
Once you have settled on your future strategy – both in terms of its scope and your sources of competitive advantage – you need to determine the critical capabilities you will need to enable its delivery. The gap between your existing level of performance on each of these capabilities and the level required in the future will dictate where you need to focus.
At this stage in the 6-Day Strategy process, I work with my clients to undertake a capability gap analysis. First, based on the new strategic direction, we list all the capabilities the business will need to build or improve. Next, we undertake a gap analysis, setting out the company’s current capability level with the level of capability that will be required to deliver the strategy.
The chart, below, demonstrates a gap analysis I developed with the executive team of a furniture company. Following this analysis, the team quickly agreed that the company needed to focus its efforts on building three capabilities: The design, development and manufacture of dining furniture; Cost reduction innovation; and Customer service support for its retail customers.
A new growth strategy will only succeed when the organisation is capable of delivering it. Execution demands a combination of ‘hard’ organisational elements, such as clear structures and robust processes, and ‘soft’ stuff, including leadership style, shared purpose and values and the quality and skills of your people.
At this stage in the process, you therefore need an honest discussion about the health of your organisation and your collective readiness to deliver the new emerging strategy. Here are 10 questions that might help that discussion:
- How clear are accountabilities across our business? Do people feel that they understand what’s expected of them?
- How effective and productive are our operational processes and systems?
- How well does this business work across organisational boundaries and structures?
- As a leadership team, how well do we set just a handful of priorities and performance goals for the business to deliver?
- Do our people feel that we have a clear shared purpose and and a set of values that give meaning to our work?
- How well do our people feel that we currently use their skills and capabilities?
- What is the level of engagement across the business and what does that mean for our retention rates?
- To what extent are we good at delivering change and key initiatives, and what’s our level of pace at doing this?
- Do people feel that they’re free to raise issues here, or do they see this as a political organization?
- To what extent are members of this leadership team exemplars of the organizational behaviours we’re after?
These questions enable discussions of both your ‘hard’ and ‘soft’ organisational elements. You might have data from staff surveys to help the discussion, but even if you don’t, answering these questions honestly and openly will help you to check your organisation’s readiness for strategy implementation and to identify some areas for action and improvement.
Having identified areas for capability and organisational improvement, in addition to the strategic priorities you defined on Day 3, you are now ready to create a focused agenda for action. And that will be your objective on Day 5 of the The 6-Day Strategy.
© Stuart Cross 2020. All rights reserved.