Over the past 20 years organisations (can be a business company, public entity, military entity) have used different ways in creating or renewing their strategies. Often bringing in McKinsey, Baine, Boston Group, Accenture, IBM, PWC or other leading consultants who have used HBS, Ashbridge, Cranfield, IMD, INSEAD, UCLA to study and understand what methods and what is important to have the process of establishing and renewing strategy for their organisation.
Indeed 12 manage website lists some 175 contributing methodologies or frameworks that various consultants have submitted as useful approaches to constructing strategy.
( http://en.wikipedia.org/wiki/Strategy ) A strategy is a plan of action designed to achieve a vision. Originated in the military, but now applies mainly to carrying out business.
Richard Rumelt UCLA author of “Good Strategy, Bad Strategy” definition “Strategy is a cohesive response to an important challenge. Unlike a stand-alone decision or a goal, a strategy is a coherent set of analyses, concepts, policies, arguments and actions that respond to a a high-stakes challenge.”
For me Richard’s definition aligns nicely with all the definitions be it the military, management, gaming or general dictionary ones. What it lets you do is define the “what” and translate that into the “how” over time.
REVIEW OF DIFFERENT STRATEGY METHODOLOGIES
These methodologies listed below have hyperlinks to the 12 Manage website which gives full descriptions of each methodology.
A Mix of those that create the What and those that create the How
Out of the 175 methodologies that are described in 12 Manage, you can start to split them into different knowledge categories. There are very few that can be said to be truly relative to producing strategy given the definitions outlined previously. Some purport to be about the market or competitive positioning, some are about forming objectives, some are financially focused and some are about defining what you are in a psychological behavioural framework for companies. Very few are holistic and can be used for elements of an organisation, function by function or department by department or process by process.
Some consultancies keep their methodologies unpublished, but those who are well known just provide the one time what and come back every year to up date it. They do not provide organisations with their own means of developing strategy. However, I see the Kaplan/Norton methodologies as the only true attempt to holistically approach strategy with the what and the how, with a strategy process that encourages organisations to be their own strategy keepers.
The following is a sample list split into the categories:
Popular What methodologies
7-S Framework McKinsey
Ashridge Mission Model
Popular How methodologies
Porters 5 Forces
Popular Marketing and Competitive methodologies
7 Ps Extended Marketing mix
Blue Ocean Strategy
PREFERENCE FOR USING THE BALANCED SCORECARD (KAPLAN/NORTON)
Bob Kaplan and David Norton established the Balanced Scorecard in the mid 1990s using their companies to build case studies and develop a series of books that explain aspects of the methodology, now consulting and continuing the research into strategy methodology using Palladium.
If you look at McKinseys 7-S Framework model Kaplan/Norton have created nearly all the elements that are required to build an holistic strategy management system. Structure: “Office of Strategy Management”, Systems: “Balanced Scorecard, Strategy Maps,” Style: “SMS”, Shared Values: “Alignment” Strategy “Intangible assets, Human, Information and Cultural Capital”, Staff: “Certification of methodology professionals”. They have also provided tools and the recommendation of tools to monitor the strategy process. For me linking Strategy into action by identifying the key initiatives and working them as programmes and projects is key to implementing the strategy. Having a Strategic Feedback System from the top to the bottom of the organisation both ways closes the loop for all strategy objectives to meet the challenges set.
Kaplan/Norton have created the only published holistic approach to establishing, maintaining and renewing strategy for an organisation. It encourages cascading aligned to the organisation’s structure and it encourages a feedback loop process to ensure that the strategy by the leadership is connected to the strategy in every operational area including with 3rd parties and the end customer. Moreover you can integrate and use other methodologies to build or monitor the causal effect perspectives that are key to an organisation.
In creating their case studies they have also enlisted a “hall of fame” approach to those companies who carry out a good strategy process and have succeeded in producing good strategy.
The balanced scorecard is a proven methodology both in the business world and public entities. Over 1200 case studies, including senior executive quotations, all achieving outstanding results. The disciplines of balanced scorecard have evolved over the past 15 years: we can learn from the lessons of others. Balanced Scorecard has been used by good companies to become great; it is a discipline they see as essential. Balanced Scorecards integrates well with other best practices such as ABC accounting, HR regulatory compliance and common functional business tools. Because it’s a discipline as well as a tool, Balanced Scorecard can improve capability internally and 3rd party contracts to become strategic, rather than just operational. Once you have Balanced scorecard capability internally, you can confidently offer strategy advice/consultancy to your suppliers – climbing the food chain right to the top.
Office of Strategy Management provides a process for carrying out the strategy process using the methodologies, maps, tools around the Balanced scorecard in a closed loop environment.
All the books that have been created by Kaplan/Norton link each element that is necessary to create good strategy.
Documents or links I like for reference: