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The Third Stage of Strategic Planning: Formulation

Co-Authors:

Jessica Lim, National Director Practice Management – Commercial Litigation & Construction, Borden Ladner Gervais LLP (BLG)


Katie Stowe, Principal Consultant, Impact Matters Consulting


This article sets out practical considerations to successfully complete the formulation stage of strategic planning: where firms document a strategic plan. 


As stated in the first and second articles in this series, the strategic planning process unfolds in four stages:


These stages are adaptable across various levels of a firm – from overarching organizational strategies to specific practice areas.


Approach your strategy in phases of maturity

There’s no one-size-fits-all approach to strategy formulation. Many strategy experts highlight the right and wrong ways to approach strategy. Our view is that the strategy itself and the framework it’s embedded in will not by static; they will evolve and mature year-after-year. Further, what your strategy looks like will depend on which part of the organization the strategy covers. The key is to start where your firm is at and balance theory against what’s practical and will work for your firm. This will vary by how many years your firm has been focused on strategy, your firm’s culture, and the nature of strategies your firm needs today.


Keep in mind what a strategy should be

Regardless of phase of maturity, there are four traits we consider essential to any statement you label a strategy.

  1. Methods – Address how will you achieve your goals and realize your vision.

  2. Choices – Clearly set out what you will and will not do.  

  3. Advantage – Define how you will create and sustain your unique value relative to competitors.

  4. Forward looking – Focus several steps into the future, not immediate actions or tactics to execute this year.


Zero in on the priority issues & opportunities

At a minimum, your strategy should clearly address:

  1. internal issues that are causing roadblocks to realize and sustaining your vision; and

  2. external opportunities that address client needs and that you must capitalize on to grow.


It’s common to focus heavily on internal issues and go light on the external opportunities, particularly in the earlier phases of maturity.


If you land on a more internally focused plan to start, ask probing questions to get people thinking about external opportunities. Keep in mind you may need to walk before you run, and the emphasis may shift to a more external focus over the coming years.


Make it concrete, simple and plain language

The importance of simplicity and plain language cannot be overstated. This is where many business professionals and consultants will lose their (internal) clients.


Some tips on how to achieve this:

  • Keep your draft short and to the point;

  • Use language and visuals that could be understood by a ten year old; and

  • Seek dissenting opinions to challenge and strengthen your draft.


Build out relevant strategy elements one-by-one

The core strategy elements to consider creating are set out below. This an à la carte menu to refer back to each year as you revisit your strategy and consider what changes your firm is ready for.

Where you are going

  1. Vision – What the entire organization, function or team is collectively aspiring to achieve.

  2. Mission – Your collective purpose. Your “Why.” The reason you all choose to work there each day. Watch Simon Sinek’s video on finding your “why” for some inspiration.

How you will get there

  1. Values – Behaviours all must exhibit on day-to-day basis. Values play an important role in shaping your culture, which can be a competitive advantage itself.

  2. Goals – Long-range themes that provide direction and are in close alignment with your vision.

  3. Strategic choices – The Roger Martin strategic choice cascade is an excellent framework to summarize (1) what markets you’ll compete in, (2) how you plan to gain or sustain competitive advantage, (3) what capabilities and support are essential for success (4) management systems you will need in place.

How you will operationalize

  1. OKRs (Objectives & Key Results) - OKRs are a strategic and action plan framework themselves.

    1. Objectives – Set out three to five clear and practical outcomes that must be accomplished to achieve the goals. 

    2. Key results – They explain how you will achieve your objectives. They can be objective metrics or they can be effort-based results. Ideally, you will have three to five for each objective.


  • Example Objective: Provide a superior level of client service that is unmatched by competitors. Key Results: (1) implement new client service interview program by end of year, including a satisfaction survey (2) show at least a 50% increase in satisfaction scores within 12 months, and (3) earn a on BTI’s Client Service All-Star list, which ranks top 30 firms by service score.


  1. KPIs (Key Performance Indicators) – These are one to two key data points per objective to measure your overall performance. These are metrics your firm would normally track while running the business. The will sometimes be the same as the key results.

 

  • Example Objective: Grow our class actions practice. KPIs (1) Increase revenue by X $ (2) increase # FTEs by X.


  1. Action plans – The action plans are typically timebound by nature because they are often part of a one-year plan in accordance with the firm’s annual planning and budgeting cycle. Your action plan should include the objectives, project names, key accomplishments by quarter, the one person who will take ownership and lead the project, at a minimum.


Conclusion

The formulation stage of the strategic planning process can be very satisfying as you start to see tangible results from your efforts. Keep in mind the importance of engaging stakeholders, listening to your internal clients and adapting to meet them where they are. This is the beginning of an annual cycle of continuous improvement in your strategic planning. Enjoy!


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