Many people find the ABCDE Model* to be a very useful model for understanding the flow of strategy from the beginning to the end of a cycle of strategic planning/execution activities. The model is illustrated in the nearby graphic and described below:
A – Assessment of current situation. This element involves scanning the external environment, competitive scanning, assessing the current situation; and clarifying perceptions of problems, needs, and opportunities. I provided two useful ideas for this sensing environmental context in this earlier article.
B – Baseline the gap. This element involves identifying performance gaps, and evaluating trends.
C – Components of strategy. Example components of strategy include common concepts like core competencies, values, mission, vision, metrics, goals and objectives, portfolios, and processes. Vision is the most important of the components (in formulating and executing a strategic initiative). This describes the point where managers would select and fund strategic initiatives as a ‘C’ component.
D – Delivery of component. This is the delivery of the strategic initiative, as well as other programs, projects, and operational work. As part of this, executives will formulate action plans; benefits capture plans, targets, standards, and metrics.
E – Evaluation of progress. This includes review of progress, reporting, tweaking of goals, corrective actions, and learning.
You could think of ABC as the process of strategy formulation and the DE as the strategy execution piece. (For the record, I think it is unhelpful to separate strategy formulation and execution; both require strategic thinking.)
Chartering Strategic Initiatives: Steps C & D
The process of identifying and chartering a strategic initiative falls somewhere in the C or D area, depending on the organization. The process is this: the executive team considers the gap between the current state and future state and develops answers to this question, “What are the few critical programs that allow us to close our most important performance gaps? The answer is to charter one or more strategic initiatives focused on achieving each critical outcome.
The strategy team then selects and funds the strategic initiatives.
The “Story Arc” and Story Telling
Through the ABCDE model, you can position four important questions in the organization’s narrative arc:
- Where is the organization at? As I wrote in tip #2 on backstory (see top of page for link), you have to know the background of the strategic initiative.
- Where does it want to be? The vision statement is a crucial tool that needs to be understood and agreed by others. Consult this article on socializing vision statements for some useful advice.
- How will the strategic initiative team close the performance gap? The short answer is, “We will close the performance gap by applying resources and provide program leadership.”
- How will the strategic initiative team measure and report its benefits? The short answer is, “We will identify the vital metrics of most importance to strategic stakeholders and communicate them per our program governance strategy.”
Storytelling is a valuable strategic leadership tool. Stories – in their simplest form – involve a beginning, a set of activities, and a conclusion.
When organizations “set strategy,” they start (the beginning of the story) with strategic inputs, perform some activities, and conclude with some sort of learning.
Here is an example script for telling the strategic initiative story. You should be able to find all elements of the ABCDE model in it:
My organization found its financial performance slipping versus expectations, due to changes in the external environment that affect the entire industry. The organization developed a strategic intent that went beyond survival, to thriving. The changes involve creating a more coherent value proposition that will cause redesign of the elements of the business model. Accordingly, executives chartered and resourced this strategic initiative to close the performance gap. Our strategic initiative will incrementally provide benefits that support the balanced score card metrics. We plan to complete delivery of targeted benefits in 24 months, and close the program.
Notice how this script does not belabor projects or deliverables, and instead focuses on strategic context and delivery of benefits to stakeholders. Does this suggest an idea you can use?
* Thanks to Matt Evans for sharing the ABCDE model.
- Use the As-Is-&-To-Be Table to Clarify Strategic Initiative Vision (leadingstrategicinitiatives.wordpress.com)
- Why Your Organization Will Perform Better With Fewer Strategic Initiatives: Six Bits Evidence (leadingstrategicinitiatives.wordpress.com)
- Identify Performance Gaps and Get Out of the Rut of Solutioneering (leadingstrategicinitiatives.wordpress.com)