Aug 6 2024 20 min to read

Green card in strategic planning and implementation: Part 2. Planning the strategy

Categories: Methodology,Planning the strategy,GoalEnvision

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Learn how to formulate an inspiring vision, a mission statement and set strategic goals that form a flexible and adaptable strategy. Understand how the strategic perspectives work and what the level of ambition means. In this part of the course, we will go through the strategy planning process step by step.

Creating a successful strategy for your business starts with clearly formulating a vision and a mission statement. This part of the course guides you through the first steps to lay the foundation for a sustainable and inspiring strategy. Return to Part 1 of the course for a more detailed description of each element.

Step-by-step instructions for planning a strategy

1. Formulate vision and mission statement

- Step 1: Understand your business and its purpose
  - Reflect on what drives your business and what purpose it has. What inspires you and your team to work every day?
  - Identify the overarching values and principles that you want to convey through your business.
- Step 2: Create the vision
  - Based on the insights from step 1, formulate a vision that describes the long-term and inspiring direction for your business.
  - A vision must be inspiring for the team and attractive for customers and partners. The vision does not have to be concrete, but rather aims to inspire and engage.
  - Example of vision: "A greener planet through sustainable renewable energy technologies."

Keys (answers):

Reflect on what drives your business and what inspires you and your team to work every day.
Describing the long-term and inspiring direction for your business that engages and motivates the team, customers and partners.
A vision must be inspiring for the team and attractive for customers and partners; it does not have to be concrete but should aim to inspire and engage.
A mission statement is more concrete and specific, focusing on what the company does, for whom and how it differs from competitors, while a vision is long-term and more abstract.

2. Formulate growth targets

- Start by setting a growth targets which should show the main direction for growth in the coming year(s).
- Example growth target: Increase mobile app user base by 20% within the next six months.
- The growth target will guide which strategic goals you set in the next step.

Keys (answers):

Growth targets are specific goals that a company sets to increase revenue, improve market share, expand into new markets or improve products and services. They are important because they drive the company's development forward and focus efforts on expanding the business and increasing profitability.
Growth targets should be specific, measurable, accepted, realistic and time-bound (SMART). They should be inspiring and provide clear direction while remaining relevant and ambitious.
Analyzing the current situation helps to understand the market, identify competitive advantages and assess internal resources. This clarity makes it possible to set realistic and achievable targets.
Flexibility is essential in growth planning because market conditions can change and unexpected obstacles can arise. Goals and strategy must be adjusted to remain relevant and achievable in response to these changes.

3. Formulate strategic goals

- Formulate strategic goals which together lead to the achievement of the growth goal.
- Use the SMARTER model which means: Specific, Measurable, Acceptable, Relevant, Time Bound, Engaging and Realistic.
- Try to formulate the goal as if it is already fulfilled. It clarifies and simplifies the interpretation of the goal's meaning.
- Target the growth target: Be careful to formulate strategic goals that lead to the achievement of the growth target. Stay within the scope of the mission statement and vision.
- Assign people responsible for strategic goals in GoalEnvision. The person in charge of each unit is also responsible for achieving the goal and must comment and suggest activities to achieve it. Others can report the results, but the person responsible must be the driving force.

Example of SMARTER business goals: "We have established and implemented a new customer service system that improves the customer experience and increases customer satisfaction.

Specific: The goal is clear defined by focusing on the establishment and implementation of a new customer service system.
Measurable: The goal can be measured by evaluating improvements in customer experience and customer satisfaction after implementation.
Accepted : The goal is accepted by management and the team that works with customer service.
Relevant: The goal is relevant to improving customer relations and increasing customer loyalty.
Time-bound: The goal has a level of ambition that tells when the goal will be achieved.
Engaging: The goal is formulated in a way that inspires and engages the team to work towards maintaining the new system.
Realistic: The goal is realistic to achieve within the framework of the organization's resources and schedule.

Read more about strategic goals...

Checkpoint: Formulate strategic goals

What is the SMARTER model, and what do the letters stand for?
Why is it important to formulate strategic goals as if they have already been achieved?
What are the most important components of strategic goals, according to the document?
How does GoalEnvision facilitate the formulation and follow-up of strategic goals?

View the answers

Keys (answers):

The SMARTER model is a framework for formulating strategic goals. It stands for:
- Specific: The goal must be clearly defined and precise.
- Measurable: There must be quantifiable indicators to assess progress.
- Accepted: The goal must be accepted by those responsible for achieving it.
- Relevance: The goal must be significant and in line with the organization's mission.
- Time bound: A clear time frame for achieving the goal must be established.
- Engaging: The goal should be motivating for the team.
- Realistic: The goal must be achievable within the organization's resources.
Formulating strategic goals as if they have already been achieved clarifies the goal's purpose and simplifies interpretation. This approach helps teams visualize success, focus on the outcome, and foster commitment and motivation to achieve the goal.
The key components of strategic goals include:
- Responsible Person: Assign a specific individual or department responsible for the goal.
- Reporter: Identify someone who collects data and reports progress toward the goal.
- Measurability: Make sure the goal has quantifiable indicators for evaluation.
- Conditions: Identify resources, competencies or processes required to achieve the goal.
- Ambition Level: Set a standard for success that is challenging but realistic.
GoalEnvision is a digital tool designed to help organizations formulate, track and achieve strategic goals. It helps break down larger visions into manageable, measurable goals and allows for continuous monitoring of progress. By providing a structured approach, GoalEnvision ensures that all efforts are coordinated and aligned with the same end goal, increasing the likelihood of success and sustainable growth within the organization.

4. Choose measures for the goals and set the level of ambition

- To evaluate goal achievement, it is important to measure and compare the results with the goals. Choose appropriate metrics for each strategic goal:
  - Objective KPIs: Use specific, measurable indicators such as sales figures, cost savings, production volumes, etc.
  - Survey responses: Use surveys to collect data from customers, employees and other stakeholders about their perceptions and experiences.
  - Condition Index: Compile the status of various conditions and show how well they support the goals. The result varies from 0% if all conditions are red to 100% if all are green.
- Analyze and compare results:
  - Collect data: Capture historical results for your strategic goals or delegate the task to the right person. If you don't know the historical performance, conduct a baseline study to create a starting point.
  - Analyze results: Use magic charts to display all targets simultaneously and discover correlations and causes. It helps you set the ambition levels of your metrics more effectively.
  - Set the level of ambition for each measure in the strategic goals, to show how you want the goals to develop going forward. Enter the value or result you want to see each period forward.

Keys (answers):

To evaluate goal achievement, the following types of measures can be used:
- Objective key performance indicators (KPIs): Specific, measurable indicators such as sales figures, cost savings and production volumes.
- Surveys: Collection of data via surveys directed at customers, employees and other stakeholders to gain insights into their experiences and perceptions.
- Condition Index: A summary of the status of various conditions that affect the goals, with results ranging from 0% (all red) to 100% (all green).
Data to analyze the results of strategic goals can be collected through:
- To produce historical results for the strategic goals. If historical data is missing, a baseline study can be conducted to create a starting point.
- Using GoalEnvision's magic chart to display all goals at once, helping to identify relationships and causes behind results.
The level of ambition refers to the standard set for what is considered the successful fulfillment of a goal. It is defined by the value or result desired for each measurement period going forward. In determining the level of ambition, past performance, industry standards and the organization's resources should be taken into account to ensure that the goals are both challenging and realistic.
GoalEnvision's Magic Chart offers several advantages when it comes to tracking strategic goals:
- A quick overview of the achievements in relation to the established goals.
- Results are displayed as percentages, making it easier to understand how well goals are being met without deep knowledge of the data.
- The ability to identify patterns and trends that help in decision making.
- Easier to compare multiple charts with different measurements.
- The ability to zoom in on details to see what needs improvement, making it visually easier to understand than traditional charts.

5. Identify the conditions of the goals

- Identify which conditions that the organization and the business need to successfully achieve the respective strategic goal and the ambition levels you set. As a help, you can think based on three types of conditions:

- Structure: Instructions, materials, equipment, etc.

Example: Clear instructions and guidelines to guide employees in the right direction. Access to relevant and up-to-date materials and resources to support the implementation of strategic initiatives. Equipment and tools that enable efficiency and productivity in work.

- - Ability: Skills, experience, etc.

Example: Competent employees with relevant skills and experience to implement strategic goals. Continuous training and development to ensure the team is equipped to meet challenges and demands. A strong leadership that can motivate and guide the employees in the right direction.

- - Energy: Will, agreement, culture, etc.

Example: A positive and engaged culture that fosters collaboration and innovation. A common desire and commitment to reach the goals and drive change. Agreement and understanding of the organization's vision and strategic direction among all employees.

- Determine how the status of the conditions should be determined:
  - To assess the status of the conditions, as shown by traffic lights, you can use the following methods:
    
    Objective key figures: Appoint a person responsible for reporting results after each period based on predetermined threshold values for green, yellow and red.
    
    Survey responses: Create surveys and collect feedback from employees, customers and stakeholders. Specify cut-off values for average ratings from surveys that determine whether the condition shows red, yellow or green.
    
    Expert opinion: Appoint an expert who, based on predetermined criteria for red, yellow or green light, sets the traffic light after each period based on their assessments.

Checkpoint: Identify the goals' conditions

What are the most important conditions required to achieve strategic goals?
How can we assess the status of these conditions?
Why do organizations find it difficult to coordinate towards their goals?
How does GoalEnvision help identify the conditions for strategic goals?

View the answers

Keys (answers):

To achieve strategic goals, three main conditions are required:
- Structure: Clear instructions, access to relevant materials and necessary tools and equipment to support effective implementation.
- Capacity: Competent employees with relevant skills and experience, continuous training for development and strong leadership to motivate and guide the team.
- Energy: A positive organizational culture that promotes collaboration, a shared commitment to the goals and a unified understanding of the organization's vision.
The status of the conditions can be assessed using different methods:
- Objective Key Indicators (KPIs): Appoint a responsible person to report on performance against pre-defined thresholds for red, yellow and green status.
- Surveys: Distribute surveys to gather feedback from employees, customers and stakeholders, and establish criteria to assess average ratings.
- Expert assessment: Appoint an expert to evaluate the conditions based on set criteria for red, yellow or green status after each assessment period.
Organizations can have difficulty with coordination for two main reasons:
- Goals may lack clarity and fail to break down long-term goals into actionable short-term steps.
- Employees may feel that they lack the resources or conditions to achieve goals, which can lead to negative stress and inhibit performance.
GoalEnvision helps organizations by breaking down their growth goals and identifying the necessary conditions. This holistic approach ensures that all aspects of the organization are engaged and motivated to achieve the growth goals. GoalEnvision emphasizes a strategic vision across five success perspectives, which creates focus, motivation and energy within the team.

6. Distribute goals by strategic perspective

1. Market: Focuses on understanding the outside world, trends, competitors and society that affect your offering.

Example: Presence established in three new international markets through strategic partnerships and local marketing campaigns.

2. Sales: Focuses on sales strategies, marketing, sales goals and growing the customer base.

Example: Sales increase by 20% annually.

3. Operations: Focuses on internal processes, streamlining and quality improvements.

Example: We work with Lean methods that reduce production costs and improve product quality.

4. People: Focuses on employees' skill development, well-being and commitment.

Example: The employees' competence is high through ongoing training and certifications.

5. Finance: Focuses on financial goals, budget management and financial sustainability.

Example: The business is financially sustainable, turnover, contribution margin, cash.

Overview your strategy with the strategic goals divided by perspective and see that the strategy is a unified and feasible path to success. Add if something is missing.

Checkpoint: Breakdown of goals by strategic perspective

Why is it important to use a structured model for goal setting?
How does the market perspective help to better understand customers' needs?
In what ways can the sales perspective improve sales performance?
What does the operational perspective mean for internal processes?

View the answers

Keys (answers):

The use of a structured model ensures that all aspects of the business are considered, leading to a more cohesive and effective strategy. It helps align goals with the company's overall vision and values, and ensures that efforts are directed toward long-term success rather than just addressing immediate problems.
The market perspective focuses on collecting and analyzing market data, which provides insights into customer preferences and needs. By understanding market trends and customer feedback, companies can adapt their products and services to better meet the demand of their target group.
The sales perspective helps develop targeted marketing campaigns and improve customer relationships. By focusing on effective communication and understanding customer needs, companies can increase their sales volume and build long-term customer loyalty, ultimately improving sales performance.
The operational perspective emphasizes optimization of internal processes and resources. By improving workflow efficiency and reducing costs, organizations can streamline their operations, leading to increased productivity and better quality outcomes. This focus on internal efficiency supports the achievement of broader sales and marketing goals.

Summary

In this part we have learned how to formulate an inspiring vision, develop a mission statement, set SMARTER goals and develop a flexible and adaptable strategy to achieve these goals. We have also discussed the five strategic perspectives, what the level of ambition means, how to measure the goals and compare the results with the level of ambition of the goals, as well as how to ensure that the conditions are in place to be able to achieve your strategic goals.

Go to Part 3 (Implement and Follow Up the Strategy) ...