Discussing strategy, and what we mean by it, can be a confusing and sometimes unproductive undertaking. Considering its different uses as a noun and an adjective, defining our terms is a good place to start:
- Strategic thinking: Characterizing the environment, identifying and assessing risks, and developing and evaluating options.
- Strategic goals: High level goals immediately derived from the organization’s vision and mission.
- Strategy: The general approach to how a specific goal / objective is achieved, with consideration given to core values, vision and mission, boundaries and limits to action, and options.
- Tactics: The specific actions taken to achieve the objective.
- Strategic plan: The aggregate of the organization’s vision, mission, goals, objectives and strategies.
- Vision: A roadmap to a projected future, what the organization wants to become.
- Mission: What the organization does, its purpose, and its core competencies.
With this as a starting point, I’d like to relate the key points of a remarkable presentation that contributed greatly to the clarification and simplification of our conception of the strategic planning process. The venue was the Strategic Planning Summit, managed by the IE Group, in New York last month. The speaker was Suzy Cunningham, Strategy and Integration Manager for the Kennedy Space Center (KSC).
What was particularly noteworthy was the cascade of OBJECTIVES from NASA to KSC that drives KSC’s strategy. NASA starts with just three high-level strategic goals, which might be summarized as: 1) Exploration, 2) Earth science, and 3) Serving the American public. Under these three strategic goals are three sets of objectives, 15 in total, but of which only three are directly primarily applicable to KSC’s mission: 1.1) Solar system exploration, 1.2) ISS management, and 1.3) Facilitating commercial space capabilities.
NASA manages several facilities other than KSC, such as the Goddard Space Flight Center, the Jet Propulsion Laboratory, and the Ames and Langley Research Centers, all with their own specific missions and set of core competencies. KSC in turn has its own vision and mission, distinct from that of NASA proper and from NASA’s other facilities. Compare visions – NASA: “Reach for new heights and reveal the unknown for the benefit of humankind”, versus KSC: “The world’s preeminent launch complex for government and commercial space access”.
However, KSC inherits its priority objectives directly from NASA. From those inherited priority objectives KSC next develops the associated milestones and metrics, and it’s not until this point that “strategies” come into play – strategies for achieving these objectives, typically via supporting projects, such as the redesigned launch complex for the Space Launch System (SLS).
Generalizing this for a typical organization, the process outline would be:
- Corporate vision and mission
- Corporate strategic goals
- Corporate objectives
- Corporate metrics and strategies for managing its business units to achieve those corporate goals
- Business Unit/Division vision and mission
- Business Unit/Division objectives (subset of corporate)
- Business Unit/Division metrics, milestones, projects and strategies in support of priority objectives
This objectives-driven approach to strategic planning has several things going for it:
- Clarity and simplicity: The focus is on the Objectives; there’s no muddling with the vagaries of strategy, and no wading through multiple strategy levels.
- Consistency: The objectives cascade lock, stock and barrel. Methods, approaches, strategies, and competencies can all vary as the environment dictates, but the objectives remain the objectives.
- Communication: One of the biggest complaints you hear from leadership is that, “80% (or whatever your number is) of our people cannot articulate our strategy”. And how could they? What do you mean by “strategy” anyhow”? Your customer engagement strategy, your global sourcing strategy, your talent management strategy, your product life cycle strategy, your – well, you get the point. What you really want them to understand unambiguously are your values, vision, mission and objectives (or those objectives that pertain to them). Yes, management needs to understand strategy, so that they can coordinate across functions and alter tactics in conformance with mission and objectives, but you can greatly simplify what your individual contributors need to understand by focusing on objectives.
- Metrics: If you’ve got too many metrics, one reason might be that they are not all focused on objectives.
I have previously delved into this at least twice, once with “Metrics for the Subconscious Organization”, and again with “Metrics – Too many different ways of keeping score”, with my major bone of contention being the disconnect between the metrics management uses to steer the ship and the metrics the rest of the organization needs in order to get things done and improve their efficiency and effectiveness. Too often what we cascade are operationally irrelevant metrics like ROA, DSO or inventory turns, important to the ship’s captain and to certain, specific functions, but not generally applicable across the board.
Related to this is the distinction we make between business intelligence (BI) and operational intelligence (OI), as if the two are unrelated. Today, for practical reasons, they might very well be separate domains, but there is no need for them to remain so. With unwavering objectives as the common denominator (versus strategies that will vary by function), BI and OI can be seen as a continuum, with a single, integrated “intelligence” platform, including both BI and OI, communicating the relevant metrics across the organization, assuring consistency of message and alignment of activity.
By Leo Sadovy, EPM Channel Contributor, from: http://blogs.sas.com/content/valuealley/2016/01/13/objectives-that-drive-strategy-a-lesson-in-strategic-planning-from-nasa-and-the-kennedy-space-center/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ValueAlley+%28Value+Alley%29
Leo Sadovy handles marketing for Performance Management at SAS, which includes the areas of budgeting, planning and forecasting, activity-based management, strategy management, and workforce analytics, and advocates for SAS’ best-in-class analytics capability into the office of finance across all industry sectors. Before joining SAS, he spent seven years as Vice-President of Finance for Business Operations for a North American division of Fujitsu, managing a team focused on commercial operations, customer and alliance partnerships, strategic planning, process management, and continuous improvement. During his 13-year tenure at Fujitsu, Leo developed and implemented the ROI model and processes used in all internal investment decisions—and also held senior management positions in finance and marketing.Prior to Fujitsu, Sadovy was with Digital Equipment Corporation for eight years in sales and financial management. He started his management career in laser optics fabrication for Spectra-Physics and later moved into a finance position at the General Dynamics F-16 fighter plant in Fort Worth, Texas.He has an MBA in Finance and a Bachelor’s degree in Marketing. He and his wife Ellen live in North Carolina with their three college-age children, and among his unique life experiences he can count a run for U.S. Congress and two singing performances at Carnegie Hall. See Leo’s articles on EPM Channel here.