What leaders do before they do strategy

What happens before the strategy workshop? For many executives (and their boards), that question draws a quizzical look. And I discover that the workshop is done 'the way we have always done it'. 

These boards and executives also have trouble answering the question - 'is your strategy a good one?'.

This is a problem. If the strategy-setting process is not well designed, can the outcome be the optimal strategy? Design of the strategy-setting process is the responsibility of the leadership group, not an external consultant, nor the board. The board's role is to help define what a good process should look like. But designing a good process is a different challenge from implementing one. A key responsibility I often work through with CEOs is to design a good process that is most likely to yield the optimal strategy. 

Most strategy consultants know this and fill this gap for their clients, but it's important that you are on the front foot before you engage them. 

What goes into designing this process? 

I find that pursuing six simple questions improves the likelihood of getting a good strategy - and knowing what that means. 

1 Are you looking at the right kinds of Data?

It's easy to focus on 'the numbers' when doing strategy. The future is tough to discern and there's a feeling of safety in having good data on your current operational starting point and future trends. 

However, there are other kinds of 'data' that you need to consider. 

• The reputation you now have and what you want it to be. 
• The hopes and fears of everyone involved, and everyone affected. 
• Data from non-financial areas - political, legal, technological, academic. 
• And of course, your list of assumptions about the future. 

2 Are you enabling different kinds of analysis & reflection? 

What are the emotional, political, geographic, creative and psychological paths through your data? Each of these different ways of addressing your strategic intent and your options for realising that intent is able to reveal potential action. Reflecting on them may evoke a realisation of a risk or opportunity that would not arise from straight analysis of the numbers. 

3 Who's invited? 

While the issues are big and complex, it's not true that only the board and executive should consider them. True, they have vital knowledge, experience and perspective, but so could several other types of participant. 

• Your internal and external content experts.
• Key stakeholders - customers, suppliers and employee representatives, local politicians and astute industry observers, your professional advisory firms and so on. 
• One that interests me is a young person, perhaps 3-5 years after graduation. That cohort, after all, will live your strategy viscerally and may understand future trends better than your elders. 

4 What events have you created how are you making them fruitful? 

For a strategy process, the obvious events are the gatherings and workshops where the composite mind of the board and executive team collaborate on defining an optimal strategy. 

However, there are a myriad other formal and informal events. And I include here the 'water-cooler' conversations, the corridor encounters, the hushed phone calls and emails in capitals, that all relate to the process. What are your rules about how these events are to be conducted? 

In particular: 

• Don't pretend that a 'planning day' is a good strategy-setting process. 
• Refer to the different approaches available in the literature, whether from different business schools, or the many experts. They each have a perspective and one may match your situation. Become your own expert on the strategy design process your firm needs now.
• Reflect beforehand on the story you will want to tell to explain the strategy to those who are affected. What's the strategy message and who's going to deliver it? What does that mean for your whole approach? 

5 Is it a good strategy? 

A good strategy is not just one that delivers good results. 'Good results' is a proxy for being 'Effective'. If a strategy is effective, it delivers results, if implemented well. But it may still fail.

• Is it too sensitive to changes in your assumptions? 
• Does it enable you to adapt to changing circumstances?
• Can you explain it easily?
• Will people align with it? (Did your data include the level of motivation and capability in the firm to implement it?)

6 Who exactly is committed to making the strategy succeed? 

At the end of a strategy-design process, which can be exhausting, it's easy to feel like you've done the work. However, it's not unusual to hear a little later that someone doesn't quite agree with it. There was no final commitment step. That's because it's confronting when strategy becomes personal. 

• Does each member of the board commit to supporting the CEO in implementing the processes that the strategy requires?
• Will everyone involved, including the board, broadcast the same message and keep silent about their individual qualms (that should have been addressed in the process)? 
• Does each member of the executive team have a clearly defined responsibility for the projects, messages and investments in the strategy? 
• Are there positive and negative consequences for not following through on these commitments? 
• Has each person on the board and the executive committed to making an in-person statement to their teams to explain, sell and gain support for the strategy? When will this happen? 

There are many experts on strategic forecasting, analysis, decision-making, implementation and telling the strategy story. You don't have to be fully expert on all of those facets of strategy. But if you are going to do this well, it's best to make sure you've thought through its design - including which experts are most relevant to help you - before you start. 

I know there are many stories of both inspiring and ghastly strategy processes out there. What's been your experience and what would you add to these questions?