A really useful way to test any strategy document or statement is to ask, does our strategy work as a frame for decision making? Does this strategy statement guide and inform decisions? To think of strategy as a frame for decision making might seem an unusual, but it has a sound foundation. This article explains how to write and test strategy documents to ensure they act as a guide to subsequent decisions. It also explains that sound foundation.
If the frame for decisions is unclear, the strategy will fail the ‘so what?’ test
The first test of a strategy is a simple practical approach. If you read many strategy statements you will notice they fail the “so what?” test. Sometimes so-called strategy statements are merely strategic themes or strategy as simply strategic objectives. However, they provide no guidance as to what to do next. There is no guide to subsequent decisions. Clearly something is missing from these strategy statements. The strategy fails the test of strategy as a frame for decision making.
Good strategy as a frame for decision making
Any reader of Richard Rumelt’s book, Good strategy Bad strategy will recognise that his approach requires three parts.
- The first part of a good strategy sets out the wider context of “What is going on and how do we frame or diagnose the situation”.
- The second part of a good strategy, the policy, to address the diagnosis and underlying situation.
- The pair together, provide the strategy frame against which decisions about coherent actions are chosen.
So this overall context, what is going on, our diagnosis and our policy towards it, should make it easy for people to make clear decisions about the actions that are required. So a good strategy acts to frame the decisions about coherent actions. In this case ,the diagnosis and a policy must provide that frame. (But read our strategy tablet for a wider perspective on his work))
The decisions should be a coherent set
There is an argument that strategy does not exist without action. That a strategy should contain the decisions that flow from it. Therefore, the next test is:
Do we have a set of coherent actions and decision that support the strategy as set out?
It is interesting to listen to hindsight strategists who look at a case study of a company and say, Oh look, those decisions where not consistent as a set. I think it is often much harder in the organisation, at the time of the strategy, to design such a set of decisions, when the strategy does not naturally lead to those decisions. This is especially true when the strategy is vague, contains strategic gibberish or the strategy is over simplified. Often, in these circumstances you may not have a complete and well thought through strategy to start with. The alternative is that the well-thought through strategy is lost in translation.
So, whilst you want a clear enough strategy that you have strategy as a frame for decision making. You should also be able to deduce the strategy from the set of coherent decisions made subsequent to the strategy.
Looking at strategy to frame decisions, alongside the six step decision process
In an organisation that wants effective decision making, clear strategy statements are vital. A third way we look at these strategy statements is through the lens of how decisions are subsequently made in the organisation. We can think of an organisation as a decision making factory. Its role is to make good decisions, execute them well and learn from then quickly. (This is a simplified version of our six-step decision process). The better it makes good decisions, executes them well and learns quickly from them, the more effective it will be as an organisation.
Our six step decision process provides a way to talk about and analyse the way decisions are being made, and taken, and acted upon, and learnt from. What the six step decision process also highlights is the need for explicit thinking and conversation about awareness (what is going on) and how the situation is framed. These are required steps BEFORE the ‘decision making’ step starts. Otherwise, with different diagnoses or frames for decision making, people will be making and taking quite different decisions. In other words, the diagnosis provide the frame for subsequent decision making and taking, just as a coherent frame and policy provides the frame for the coherent actions and decisions in the good strategy, strategy tablet.
It is no coincidence that our decision process and strategy tablet approach are similar
Our strategy tablet approach evolved separately to our six step decision process, but share common thinking. When put alongside each other, you can clearly see they are similar in concept and process. There are differences. This is because one is a process, where you are flagging each step (the six step decision process). The strategy tablet, by contrast, is documenting the aspects of the strategy decision as they are made. Despite this subtle, but important difference, when you consider strategy as a frame for decision making, you can see close similarities. For instance:
- Both the strategy and decision process require awareness of what is going on.
- Both strategy the strategy tablet and the six step decision process require a diagnosis/framing stage
- The strategy tablet includes ambition and uncertainties. You can usefully include these in the decision process.
- The decision making process and decision taking process, are how you get to make and commit to a decision, as a team. In contrast the policy/strategy stage of that strategy tablet captures that team’s decision for the strategy.
- Both the strategy tablet and the decision process include actions: The strategy tablet has the coherent actions that support the strategy and diagnosis. the decision process has the ‘decision act’ stage, where these actions are taken.
- Both ask how will you learn from the process, be that the strategy or the decision. Both include learning and governance.
So, next time you look at your strategy document or strategy statements, ask yourself, not simply “So what?”. Ask how effectively these strategy statements frame and inform the subsequent decisions that you and others now need to take. For that is the acid test.