Rock Your Strategy

Tag: initiatives

  • How Many Initiatives Should My Strategy Have?

    How Many Initiatives Should My Strategy Have?

    When using the OGSM approach to strategy, I often come across the question of how many initiatives a strategy should have. In the following, I summarize what works best in my experience.

    When developing the implementation plan for your strategy, define about 2-3 initiatives per strategy.  This gives sufficient focus without relying too heavily on a single action without alternative.

    There are a few things to look out for however when selecting the initiatives to implement your strategy. I’ll provide an approach to selecting and testing your initiatives below to ensure that the 2-3 initiatives you pick are the right ones.   

    Defining the initiatives to implement your strategy

    A good strategic plan not only describes clearly what you are aiming to achieve. It also describes how you are going to achieve it. The OGSM methodology allows you to describe your strategic plan on one page detailing out your objective, your goals, your strategies and your measures. The objective and the goals together define what you intend to achieve. The strategies and measures together define how you are going to achieve it. 

    For the purpose of this article, I will not dive deeper into OGSM. But you can read our introduction to OGSM here.

    Once you have defined your objective, your goals, and your strategies, you begin thinking about your implementation plan – your measures. I like to break down my measures into two parts: metrics and initiatives. 

    The metrics are the quantifiable targets and performance indicators that define success for each strategy. The initiatives are the actions and projects that will drive implementation of the strategy and lead you to success. 

    The reason I like to separate the two is clarity. When I first started using the OGSM approach about a decade ago, I noticed how my team and I often used “measures” and “metrics” interchangeably to describe the “M” in OGSM. We were wondering what the difference was and whether it made a difference at all. It did! 

    We understood measures quite literally to be things that we’d “measure”. Hence the metrics. So we defined a number of metrics for each strategy and left it at that. 

    However, during implementation during the year, we noticed that we were not quite sure whether we were on track to achieving the metrics by year end. We took a run rate (i.e. a lucky guess really as it didn’t account for seasonality) and figured that we must be about on track. Anyway, in the end things always work out, right? 

    Wrong. We had no clue. We were missing a clear articulation of what we needed to do to turn the strategy into reality and check whether we were on track or not. We needed a clear translation of the strategies into measures which included both metrics and an action plan. The metrics would allow us to track progress and keep us on track and the action plan would clearly articulate what had to be done by whom and by when to achieve the metrics. 

    From then on out, we always defined measures as both metrics and initiatives. 

    So then how many initiatives are right? 

    In the first couple of years that we split metrics and initiatives in our annual operating plan, our OGSM was basically a large action plan. We probably had about 5-8 actions per strategy – sometimes more than 10. All actions started in January, ran in parallel and ended in December. So across the entire OGSM with 1 objective, 6 goals, 4 strategies and about 5-8 measures per strategy, we ended up with close to 30 actions! This was not only a massive effort to implement, it was a massive effort to keep track of! We didn’t know better and proceeded. 

    It quickly became clear however that this was not going to be effective. Our OGSM reviews took 8 hours every month. We were committed to action and accountability and wanted to go through each initiative and confirm we were on track. When we weren’t, we wanted to know why and what we had to do to get back on track. With close to 40 initiatives one year, this took forever. 

    We had noticed that many of the initiatives we tracked were actions we had to do anyway during daily operations. We defined actions such as “visit 10 customers per quarter”. The action was specific, measurable, ambitious, realistic and time-bound. It was however also exactly what was expected of our customer service team anyway during a typical sales process.

    We had also noticed that we described different actions under different strategies that actually contributed to the same projects. For example, one strategy had to do with driving growth, another strategy had to do with innovating. We noticed that we duplicated several initiatives that were counted under growth and under innovation. We were looking at the same topics over and over again just from different perspectives. That was redundant and a waste of time. So the following year we changed our approach. 

    In order to streamline our annual operating plan, we decided to define no more than 2-3 initiatives per strategy. Two or three initiatives per strategy meant we had max 12 initiatives overall, which was plenty for my team to handle. And we immediately noticed a change in how we implemented. 

    • We were much more focused. Fewer initiatives allowed us to allocate more resources for each initiative. It became easier to keep track of our OGSM. And it was easier to communicate and remind each other what was important.  
    • We were much more effective. We noticed that greater focus led to greater achievement of milestones and progress towards our goals and objectives. We had to put things on hold less often or pivot to change our approach.
    • We were much more efficient. We noticed that we spent much less time reporting and discussing progress updates of the action items. Monthly reviews were much more efficient and took less time. 
    • We were much more successful. When we conducted our year-end review and looked at our achievements, a couple of colleagues were quick to point out that they felt our success was directly linked to our much more focused execution. This felt really good!

    Since then, I always guide my teams to define no more than 2-3 initiatives when designing the measures for the OGSM. This avoids building a laundry list of actions. Instead, fewer initiatives keep the team on track, allow greater concentration of resources for each initiative, and vastly increase the chances of success. 

    How do I select my initiatives? 

    OK, got it. So I am only supposed to choose 2-3 initiatives for each strategy. But how do I choose those initiatives? How do I know which ones are the right ones? Excellent, those are the right questions. Unfortunately there is no hard and fast rule. But this is what has worked well for me. 

    During the strategic planning process, I conduct a SWOT exercise for my business. In the team, we reflect on our core strengths and our biggest weaknesses, we look at the most promising opportunities and the largest threats. We do this by conducting an internal assessment but we also use our customer satisfaction feedback to get an external perspective. This gives us valuable insights into what we need to do differently. The SWOT informs our strategies and then the detailed initiatives with which we implement our strategies. 

    The SWOT analysis is probably my primary source for initiatives. In addition, we may conduct a brainstorming exercise with a cross-functional team to come up with additional ideas. All ideas are then ranked based on cost vs. benefit or impact vs. complexity. We choose those initiatives with the largest impact towards our metrics and goals with the smallest strain on resources. 

    After you have chosen your initiatives, write the initiatives in the ‘what-by-how’ format. This means structuring the sentence that describes the action in two parts: the ‘what’-part and the ‘how’-part. The ‘what’-part describes what needs to get done. The ‘how’-part describes how it will get done. Here are a couple of simple examples: 

    • Win new customers by launching a targeted social media marketing campaign
    • Save costs by combining trips wherever possible 

    These are just examples to illustrate the ‘what-by-how’ method. I first learned about the ‘what-by-how’-format from the practical OGSM guide “The 1 Page Business Strategy” by Van Eck & Leenhouts. It’s a great way to write your initiatives as clearly and measurable as possible. Make them unambiguous. Leave nothing to chance.

    Finally, make sure that each initiative has a caretaker and a clearly defined timeline and milestones. Ask the caretakers whether they understand what is expected of them. Ask them to describe their initiative in their own words. Clarify when and how you expect them to report on progress and what successful delivery looks like. Check whether they have the resources, knowledge and skills to be successful. Remember, nothing gets done unless accountability is clear and caretakers buy in. 

    How do I test my initiatives? 

    After you have selected the initiatives for your strategic plan, conduct a test to check whether the initiatives are indeed the right ones. Do four checks: 

    • Check for alignment 
    • Check for sufficiency 
    • Check for clarity
    • Check for resource sufficiency

    Check for alignment to ensure that each chosen initiative directly supports implementing the strategy and achieving the desired goals and objectives for your strategy. This tests whether the initiative is actually effective in achieving the targeted goals in part or in full.

    Check for sufficiency means reviewing all initiatives together and checking whether they fully implement all aspects of the strategy. This tests whether the chosen 2-3 initiatives fully address the purpose of the strategy and whether all measures and metrics can be accomplished. If aspects of the strategy are not yet sufficiently addressed, choose another initiative or swap for one with greater impact. 

    Check for clarity means confirming that the initiative is fully understood by the organization. Especially the people responsible for implementation must know exactly what is expected of them. Make sure that for each initiative there is a caretaker, clear actions, timelines and milestones defined. Ask team members to repeat in their own words what the initiative aims to achieve to check understanding and clarity. Rephrase the initiative in the strategic plan if needed to be absolutely clear. 

    Check for resource sufficiency means confirming that you or the team have the resources needed to successfully complete the action or initiative. Resources may mean money (e.g. cash, capital etc), time (e.g. number of employees / FTEs), knowledge (e.g. access to data or information), or skills (e.g. expertise, experience). Confirm that you already have access to the needed resources or can build them in time. Be realistic about this! This is not the time to be overly optimistic or try to be a hero.

    Pro-tip: conduct the 4 checks with your team or if you are a sole business owner with a mentor or board member. It has always paid off for me to get a second pair of eyes on my implementation plan. Discussing the implementation plan in the team allows you to collect feedback, questions and concerns and further create clarity and commitment. 

    What if I have more than 2-3 initiatives? 

    When you choose your initiatives and you conduct your test and you realize that you need four or even five initiatives to implement the strategy, then go with four or five. 

    Each business is different and each strategy is unique. If you need five initiatives to successfully implement your strategy and achieve your goals and objectives – and you have the resources to do it – then decide on five. The purpose is to be successful and deliver results. No one will celebrate you for having followed the OGSM rules and having limited yourself to 2-3 initiatives if you fail to implement your strategy (spoiler alert: there are no rules). 

    The reason why I go with 2-3 is to force choices and to make trade-offs. More often than not, we tend to throw more resources at a problem than necessary. I call this ‘tossing spaghetti against the wall’ to see which ones stick. As so often in business, try to do more with less. If you can accomplish your strategy with only 3 initiatives, then you do not need number 4. If you need more than 3 to be successful, that’s perfectly ok too.

    Conclusion

    When developing the implementation plan for your strategy, choose 2-3 initiatives per strategy. This allows sufficient focus without putting all your eggs in one basket. 

    Conducting a SWOT analysis or brainstorming are effective ways to come up with initiatives. Prioritize initiatives by analyzing cost vs. benefit or impact vs. complexity. 

    For each initiative ensure you define a caretaker, timeline, and expected deliverables. 

    Conduct four tests on your initiatives to confirm they are the right ones: check for alignment, sufficiency, clarity, and resource sufficiency. 

    I hope you find this article useful and wish you success with implementing your strategy. If you have any questions or comments, why not leave a reply below. Would love to hear from you! 

    References

    Van Eck, Marc & Leenhouts, Ellen (2014). The 1 Page Business Strategy – Streamline Your Business Plan In 4 Simple Steps. Pearson Benelux.

  • How to Set Effective Measures to Implement Your Strategy

    How to Set Effective Measures to Implement Your Strategy

    When using the OGSM methodology or developing any strategic plan, it is important to define strong measures that drive strategy implementation. This is how you turn your strategy into results.

    Measures are the M in OGSM and include key metrics and an action plan that track strategy execution and define who does what by when.

    This is where the rubber hits the road. After deciding your objective and goals and choosing your strategies, the measures move the business towards its objective and tell you whether the strategy is working in practice.

    Divide measures into key metrics and action plan

    When defining the measures for strategy execution, I have found it very helpful to think of them in terms of key metrics on the one hand and key initiatives on the other hand. Key metrics measure progress and quantify achievement. Key initiatives are the actions that drive you forward. Both are critical to success. 

    First, define your key metrics. For each of your strategies, choose 2-3 key metrics that define success for the strategy. Similar to how goals are the translation of the objective into facts & figures, the metrics translate the strategies into numbers. 

    When you wrote your strategies you applied the “what-by-how” format to indicate what needs to be done and how it will be achieved. Now define 1-2 key metrics each for the “what”-part and for the “how”-part. This ensures not only that you know when you have achieved your strategy but also if you are making progress in the right direction while taking action. 

    Similar to the goals defined earlier, use the SMART approach also for choosing your key metrics. The metrics should be specific, measurable, ambitious, realistic, and time-bound. 

    The key metrics should be linked with your goals. When you have defined your key metrics, check back whether that is the case. Delivering all the key metrics should achieve all the goals. Not more, not less.  

    Next, craft your action plan by defining key initiatives. The action plan should be a concise list of key initiatives that turns the strategies into reality.

    Write your initiatives in the “what-by-how” format which you also used when writing the strategies. This again ensures that for each action it is clear what you aim to do and how you are going to do it. For example, “identify new customers by asking existing customers for references.” 

    For each strategy, choose a maximum of 2-3 key initiatives. The point here is focus. These should be the top 2-3 initiatives that really drive the change and deliver the key metrics for the strategy. Beware of including activities that are anyway part of your day-to-day routine. 

    After you have defined your initiatives, check for clarity, feasibility, sufficiency, and alignment. The initiatives must be understandable and unambiguous. The initiatives must be realistic and the resources available or accessible. All initiatives should be sufficient to achieve the intended results of the strategy. And all chosen initiatives must be congruent with each other and not be in conflict. 

    To complete the action plan, define one concrete caretaker for each initiative and set an ambitious but realistic timeline. This is important and unfortunately often forgotten in strategic planning. By setting caretaker and timeline, you assign clear accountability to make sure the job gets done. 

    The caretaker may not be the only person working on this initiative, but this person is the one accountable that the initiative is completed. That’s why it’s important to only define one caretaker so there is no confusion about who is in the lead. It is the caretaker’s responsibility then to assemble the team and the resources needed to execute the action. 

    Finally, capture the measures in the OGSM to complete the one-page business plan. Now you are ready to drive implementation and turn your strategy into results. 

    Why separate key metrics and action plan?

    In their excellent and practical book “The 1 Page Business Strategy”, van Eck & Leenhouts split measures into a dashboard and an action plan. This is a great way to ensure that each strategy is executed by following the concrete action plan and monitoring the dashboard for progress with implementing the strategy.

    I have tried this in practice now multiple times and find the separation extremely helpful. Prior to practicing this approach, I had seen measures interpreted in different ways. Some define the M in OGSM simply as “metrics”. Others have a long list of actions. Neither one individually convinced me to purposefully execute strategies and keep up with the pace of change. You need both. 

    The key metrics on the one hand define in quantitative facts and figures what each of the chosen strategies needs to deliver. As we define key metrics for both the “what”-part and the “how”-part of a strategy, we have ongoing feedback whether we are on the right track. 

    The action plan defines who does what by when to drive implementation. This breaks each strategy down into bite-size action items that can be executed in day-to-day operations. As each action has one caretaker and a due date, clear accountability is assigned. After defining a strategy you don’t want to come back months later wondering how to implement and who should be in charge. 

    By having clearly defined metrics and a solid action plan, you can directly move the business towards executing the strategy. 

    What metrics should I choose? 

    The short answer is “measure what matters” and use as much as possible key metrics that you are already familiar with. 

    The metrics you choose should be directly linked with the purpose and the scope of the strategies and link with the achievement of the goals defined earlier. 

    These can of course be financial metrics such as sales value, units sold, profit margin etc. They are very commonly also operational metrics such as number of products launched, cycle time, yield rate, percentage of satisfied customers, or an employee engagement score. The metrics you choose highly depend on the nature of the strategy.

    So it is less important which exact metric you choose and there is no one-size-fits-all approach. It is more important that you choose a metric that measures what you are looking to achieve. It must give you clear quantifiable feedback whether you are on the right track to achieving your overall goals. 

    When defining a key metric for a strategy, I have found it useful to first look at the many metrics the business already measures to see if one does the job, before creating a new metric that the team is unfamiliar with. You probably already have many key performance indicators. I would try to avoid burdening the business with new metrics unless of course the change of course requires you to do so. 

    If you are struggling to find a suitable metric, consider simply defining “Yes/No” to indicate whether an action has been done at a given time. I’m not recommending this as a best practice. But I have been in situations where there seemed to be no single metric to really define what we wanted to measure. Instead of getting stuck, we decided to define “Yes/No” as a clear binary measure whether the activity is done and move on. 

    Avoid creating a laundry list of actions

    Have you experienced this before? You create an action plan or a to-do-list to achieve an objective and before you know it you have written down 8 or 10 detailed actions. All of a sudden your action plan looks like a laundry list. 

    When implementing strategy, the problem with a laundry list of actions is that you lose focus. You end up spending more time tracking, updating and discussing action plans than actually taking action and driving execution towards your objectives and goals. You don’t want reporting. You want progress. 

    So when defining your action plan, be selective and limit yourself to 2-3 key initiatives per strategy. These should be the must-do actions directly linked to driving execution and delivering the key metrics for the strategy. 

    Beware of the common reflex to include in the action plan day-to-day routines you do anyway. Even if they contribute in small ways to executing the strategy and moving your business towards your objective. “Processing customer orders” is essential for your business, but does not move the needle for executing your strategy. Only include those initiatives that drive change.

    Read more about my thoughts on how many initiatives to choose here.

    I’ve completed my OGSM. What’s next?

    After you have completed your strategic plan, the real work is starting: the execution. 

    All too often in my business experience I have seen wonderful strategic plans being crafted. Many of them created real euphoria in the business about a great future. And that is what a good strategic plan should do! But then after the strategy was created, it was documented, filed and everyone went back to day-to-day operations. Customers called, shipments were delayed, reality struck. Have you experienced this as well? It happens, but it drives me nuts. 

    The most important part of any strategy is its execution. It’s why the strategy was created in the first place. To set a clear direction and destination for the business and decide how to allocate its resources to get there! So now is the time to use the resources, take action, and get there. Here’s what I have found useful to implement my strategic plan. 

    When finalizing your strategic plan, decide on an approach how to implement the plan and when to check in for progress. For a 3-5 year strategy, it makes sense to check on progress once a quarter and to conduct a strategic review once per year. 

    The purpose of the quarterly reviews is to make sure the strategy is working and that you are progressing on the key initiatives towards your key metrics. 

    The purpose of the annual strategic review is to check progress towards your objective and your goals and to identify any changes in your strategic context. Review the external environment and internal environment and review the SWOT analysis. Confirm whether previous assumptions still hold or if changes in your environment require you to make changes to your strategic plan.

    For an annual operating plan with objective and goals for one year, check on progress once a month and conduct a more thorough review once per quarter. Again, you are looking for what’s working and what’s not and if adjustments are needed. 

    What if I miss my targets and don’t make progress? 

    First of all, don’t panic. This is why you conduct periodic reviews. This gives you a chance to be proactive and adjust if needed. 

    Start by finding out why you are not making progress. Diagnose whether the problem lies in the strategy or in its implementation. As you have defined key metrics for both the “what”-part of the strategy and the “how”-part, they should give you an indication where the issue is. 

    If the problem lies with the implementation, check through the action plan. Do you have the right people on the job? Are the needed resources available? Is the timeline realistic? Are there challenges the team has met that you can help overcome? This means getting into the weeds a little bit. 

    If the problem lies with the strategy itself, check whether something in the external or internal environment has changed. Were any of your assumptions inaccurate. Have customer preferences changed? Has a new competitor emerged with a better offering? Depending on the answers you find it is either time to double down or to pivot. 

    No strategic plan should ever be written in stone and pivoting means adjusting your strategic plan. Go back to some of the steps described earlier and adjust your strategies, key metrics and key initiatives in accordance with your findings. If you have a team of employees, conduct strategic pivots together with your team so that they understand what is changing and why. When it comes to strategy, few things are worse than making changes that people don’t understand. 

    When people lose clarity about the strategy, they lose engagement. And a loss of engagement means a loss in productivity. This means your objective and your goals could be at risk. 

    Proactively adjusting your strategic plan and taking your team with you allow you to stay on track to achieving your obejctive and goals.

    Conclusion

    When defining the measures for strategy execution, set up key metrics and key initiatives. Key metrics measure progress and quantify achievement. Key initiatives are the action plan that drive you forward. Define a caretaker and a timeline for each initiative to ensure accountability. 

    Capture your implementation plan in a document such as the OGSM to drive execution. 

    Determine a cadence for reviewing your progress with implementation. This allows you to double down on what’s working or to pivot when it’s not. 

    Congratulations! You have completed all four steps towards creating an OGSM for your business. Now good luck with your execution and turning your strategy into results.

    If you would like to go back to earlier articles about objectives, goals, or strategies, please refer to the respective links. Click here for a general introduction of the OGSM.

    If you enjoyed this article or have questions or comments, why don’t you leave us a reply below? Would love to hear from you!

    References

    Van Eck, Marc & Leenhouts, Ellen (2014). The 1 Page Business Strategy – Streamline Your Business Plan in 4 Simple Steps. Pearson Benelux.