validating strategies - a webinar with phil driver

Copyright OpenStrategies Ltd 2014

Validating Strategieswww.gowerpublishing.com/isbn/9781472427816

Core messages

• Why most strategies fail

• Core functions (and hence strategies) of organisations

• Developing and Validating Strategies

• Performance management and enabling benefits



Worldwide, what percentage of strategies

have minimal impact?

Poll question

Do we need strategies?

• If in doubt restructure because it gives the impression of progress– Variously attributed

• Corollaries:– If in doubt create a strategy because it gives the impression of

progress– If in doubt set up a pilot/trial (or committee or enquiry or…)

because it gives the impression of progress

• Too often, these are just ways of avoiding making decisions and taking action



‘Tired of Strategic Planning?’

From a 2007 survey of 30 top international companies, McKinsey’s conclusions about strategic planning were:

• “…the extraordinary reality is that few executives think this time-consuming process pays off…”

• “…there is a lot of banging of drums and waving of feathers and an almost mystical hope that something good will come out of it”


The Old Strategy Paradigm(by OpenStrategies 2001)

005

Why most strategies make no difference #1

Strategy language• Taxonomy (classification of strategy words)

– Outputs, outcomes, mission, goal, objectives, framework, vision, status, cross-cutting-themes, aspirations, strategies, plans, collaboration, cooperation, competition, values, structures, KPIS, tasks, accountabilities, responsibilities, principles, tactics, actions, directions, issues, factors, priorities, benefits, impacts, purpose, capacity, capabilities, forecasts, scenarios, drivers-for-change, data, information, knowledge, wisdom…. and sometimes ‘implementation’

• Syntax (rules for constructing strategy ‘sentences’)– Do goals create objectives or do objectives create goals?....

• Semantics (meaning of strategies)


Why most strategies make no difference #2

• 3 levels of strategies

• Aspirational

• Guidance

• Operational

• Human cognitive limits

• In the mind 5 +/- 2

• On paper 15 +/- 5?

• Lack of focus on core organisational functions


Three broad levels of strategy

• Aspirational (high level – not implementable)

• Guidance

• Operational (action plans – implementable)

It’s essential to be crystal clear about

what level of strategy you are creating



Human cognitive limits

There are limits to how much information humans can use at any one time:

– Humans can hold 5 +/- 2 ideas in their heads

– We believe that most humans can comprehend just 15-20 inter-connected ideas when they are in a written or graphical format

So Strategies need to be written in a simple format, with information ‘chunked’ into units of 15-20 pieces of information


Our main OpenStrategies’ principle

The smallest amount of information…

that has the highest value…

to the most people

The core functions of organisations and their customers/citizens


Create assets (products, services, infrastructure) and enable

customers/citizens to Use them to create Benefits

Inputs Outcomes

External factors

Internal factors


Rising sea levels Global politics

Global finance

Legislation

Human Resources

Climate change Business confidence

Local weather

Local politics

Corporate Social Responsibility

Outcomes Based Accountability

Collaboration

Purchasing

Administration

Finance Leadership

Investment Logic Mapping

PRUB concisely defines the core ‘process’ of organisations – ie running Projects to create Results such as infrastructure products and services which citizens, communities and customers Use to create Benefits for themselves

Create products/services Use products/services

External information flowing in

Internal information


PRUB

Organisations run Projects

which produce Results (outputs/assets)

which people Use

to create Benefits (outcomes)


PRUB / BURP

Create assets Use assets

Planning (BURP)

Implementation (PRUB)


Assess customer’s needs based on what they want to do and

achieve with our company’s potential

new product

Information available on what customers

want to do and achieve with our company’s

potential new product

Use this information to design, build and test market new products

to enable customers to do and achieve what they want to do and

achieve

Accurate product and customer-use data is available relating to

our company’s potential new product

Happy customers because they have done and achieved

what they wanted to do and achieve

Sustainably manufacture,

distribute and market our company’s new

product

Our company’s new product available to customers together

with relevant product marketing information

Customers and buy and use our company’s new

product to do & achieve what they

want

Our company is sustainably profitable

Projects Results Uses Benefits


Who actually ‘realises’ Benefits?• Project Managers?• Users?• Providers?• Others?

Poll question


To enable Benefits, a strategy must:

1. Define what ideally needs to be done

2. Provide cause-and-effect Evidence that it will actually work

3. Demonstrate that it is worth it


Validating strategies

To be fully Validated a strategy must pass all 3 ‘tests’ below

1. The SubStrategy test (is it logical?)Can you represent the strategy as one or more SubStrategies?

2. The Evidence test (will it actually work?)Is there compelling Evidence for the key Links in the SubStrategy(s)?

3. The Value test (is it worth it?)Is Ʃ$B > Ʃ$P + Ʃ$U


Step 1: SubStrategy – is it logical?

• Create a SubStrategy which identifies what we would like to happen

• Shows theoretically how Projects (inputs) Link through Results (outputs) and Uses to Benefits (outcomes)

• Ideally 15-20 ‘PRUBs’


Step 2: Evidence – will it actually work?

• A SubStrategy identifies what we would like to happen

• We need to add Evidence to be sure that it really will happen

• Evidence is information which ‘Validates’ the Links between Projects, Results, Uses and Benefits

• (Evidence is not the same as performance management data)


What’s the difference between

‘data’ and ‘evidence’?

Poll question

Evidence vs data

• Many organisations say that their strategies are ‘evidence-based’

• In reality they are ‘data-based’• What’s the difference between ‘data’ and

‘evidence’?• Where do ‘data’ and ‘evidence’ sit in the PRUB

sequence?



Evidence sits on the Links between Projects,

Results, Uses and Benefits

The most important cause-

and-effect Evidence sits on

the Links between Results

and Uses

Performance management

Data sits within each Project, Result, Uses

and Benefit and has no cause-

and-effect information

Performance Measurement Data c.f. Evidence

• Performance data sits within the PRUB boxes and is simply a measure of the state of a Project, a Result, a Use or a Benefit

• Performance Evidence sits on the links between the PRUB boxes and defines the cause-and-effect information which confirms that Projects will actually lead to Result, Results to Uses and Uses to Benefits



Orphan Results

P R U B

P R

P1

P2

R1

R2U B

Abandoned Orphan Result

Adopted Orphan Result


Step 3: Value - is it worth it?

• Determine a ‘Value’ for Benefits (Ʃ$B)

• Identify costs of Projects (Ʃ$P) plus costs of Uses (Ʃ$U)

• To proceed with a Project….

Ʃ$B must be greater than Ʃ$P + Ʃ$U

Master Class (certificate from Cologne University of Applied Sciences)

London 9 -11 & 13-15th Dec 2014

White Paper: www.openstrategies.com/prub

Book: Validating Strategies

Web: www.openstrategies.com

Email: [email protected]

Linkedin: Phil Driver


Useful Links

http://openstrategies.com/upcoming-openstrategy-validating-strategy-courses






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http://www.gowerpublishing.com/isbn/9781472427816

http://www.openstrategies.com/prub

mailto:[email protected]?subject=Validating%20Strategies

http://nz.linkedin.com/pub/phil-driver/2/2a9/367

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