Strategic planning processes createlarge, detailed documents,but often little action. They sit in the bottom of draws or in unused electronic files only to be accessed when the next strategy plan is needed. As Dilbert famously described a conversation between the head of strategy and a new recruit – “The planning process involves making Powerpoints for the executive committee meeting”. “Oh … but that can be fun. I enjoy doing the analysis for Powerpoints.” “Well, actually we use the ones from last year and change the dates.”
Since a strategy is a design for how the organisation is going to compete and what it will do in the next period, maybe strategists can learn something from a profession where design is the core skill – architecture.
One of the things that I have learnt from architects is the concept of “levels of design”, a notion that the creation of a design goes through a series of levels of increasing complexity and detail.
When an architect designs a new house, for example, he or she does it in stages of increasing detail. At the first level, she sets out a few basic principles that she and the client agree on. These may be broad visions such as the house should feel welcoming for guests or it should blend into its environment. As well as practical details like the kitchen should face East to catch the morning sun or the car port should be close to the kitchen to help unload groceries.
At Level 2 the architect draws a rough sketch of the building. It might include a basic plan for each floor, a plan of how the building might sit in its plot and a view from each side. It might also include some basic infrastructure ideas such as the type of heating and where the main water and sewage pipes will run.
Level 3 is a scale blueprint with accurate measurements of each room, details about the heating and plumbing, suggested positioning for the main bits of furniture and some important material choices, such as clay roof tiles or a wood floor in the living area.
Level 4 is the quantity surveyor’s list of materials and quantities: the number of clay tiles needed or the yards of copper wire. Final decisions are made about power points, about the taps in the bathroom andthe colour of the kitchen wall. These decisions are often delegated to lots of different specialists: the interior decorator, the plumber and the garden designer.
Level 5 involves the many issues that come up as the new house is being built. An extra power point is needed for the wi-fi router. The chosen wood fired burner requires a bigger alcove than planned. A supplier is late. The building regulator requires thicker floor joists.
This concept of five levels of design, could be helpful to strategic planners. If planners thought about“five levels of strategy”, theymight be less likely to find themselves with fancy plans and little action. The typical strategic planning documentwould be recognise for what it is – a rough sketches at Level 2. Before anything is likely to happen, the strategist will need to make sure that plans are developed at Levels 3 and 4.
A Level 3 planwould identify the main organizational units responsible for different parts of the strategy and the operating model that links these organisational units together. For each unit, the planspecifies the outcomes expected, the timeframes, the way the unit will work with other units, any constraints on the unit and the resources available. The sum of outcomes at Level 3 will achieve the objectives defined at Level 2.
A Level 4 planspecifies the people, the money and the time needed for each sub-task within each unit.It also explains how units will continue with existing activity and take on the extra tasks required by the strategy.
Just as the work of the quantity surveyor often throws up issues for the architect to resolve, so too will Level 4 plans raise issues to be resolved at Levels 2 and 3. Strategic planning should, therefore, includean iterative process for dialogue between levels. This requires a concept of levels of strategy, and clarity about the work at each level. In the military, the dialogue process is called back briefing. Interestingly, in strategy work, we do not have a good label for this activity.
Finally, Level 5 planning is about the inevitable adjustments that need to be made as events unfold. The money is not available when expected. Critical people leave with little prior notice. The competitor reacts aggressively to the plan. The chosen software package does not provide some needed management information.
Sometimes events cannot be handled by adjustments at Level 5. Changes are needed at Levels 4 or 3 or 2. This is when clarity about levels is again helpful. Knowing when events require a Level 5 or a Level 2 response ensures that managers do not wander off course unnecessarily or fail to correct course when circumstances demand it.
Maybean awareness of levels of strategy work will bridge the gap between strategy and action and help organisations do better strategic planning. It can’t easily make things worse.
Andrew Campbell is a Director of Ashridge Business School in the UK and runs executive courses such as Designing Operating Models and Advanced Organisation Design. He has written more than 10 books on business strategy and organisation.