This article explains strategy validation

CEOs regard the “correct strategy” as the #1 success factor for strategic initiatives. This article will help you identify and assure achievement of the desired strategic initiative outcomes.

Many stakeholders are involved in strategy formulation, many of whom are involved in the process of creating, editing, presenting, revising, and approving documents. These documents become inputs to the strategic initiative program team. There is much ambiguity, which can be handled by discourse. However, “talking it through” does not mitigate the risk is that someone will misinterpret something.

Misinterpretation Mistake #1 – Simplifying Transformative Change into Incremental Change

Transformative strategies are those that involve a major change in the direction of the company.  An example is the recent combination of Hasbro (toy company) with the Discovery Channel (media) to retool the “Discovery Kids” channel into “The Hub.” This new cable TV channel creates programming in part based on Hasbro products like The Transformers (Hasbro paid $300 million for a 50 percent stake in the channel). 

Now, what would happen if people just treated this investment like another project?  You’d get the status quo. Creating and socializing a case for change – a vision – is an important leadership issue. Transformative change is risky, abstract, and difficult.  This need for transformative change might appear as grandiose statements in the strategy documents.

It is easy for those in the down the organizational pyramid to under-respond to an ambitious vision, and interpreting it as an incremental change.  Thus, some leadership is needed.

Board of Directors fire CEOs because of their failure with strategic initiatives. In one recent study, half of board members said that poor performance in their change initiative was a factor:

“Most pointed to a failure on the CEO’s part to properly motivate employees and managers, and more specifically, to adequately sell the need to change course.

Misinterpretation Mistake #2 – Building a too-large change initiative

A second mistake is when a leader over commits the organization to a big transformation effort when the underlying need is making incremental performance improvements. 

A Director of Purchasing at a global energy company made such a mistake, and it ended his career. Steadily promoted through a 25-year career, he found himself managing a hundred-person organization responsible for nearly a billion of dollars of annual spend.  He decided to create an e-procurement initiative, supported by expensive new software requiring the support of a large team of external consultants.  The scope of this change was more than the organization wanted, and the Director was demoted.

Validation: Getting it Right

Consider the related challenge of translating text from English to another language. It is a common practice for one translator to translate the document and having a second person translate back into English and comparing the twice-translated text to the original.  A yes answer to the question, “Was the meaning preserved?” means that we have a valid translation. 

Strategy documents are more complicated than language translation. We have a valid – or correct — strategy if we have:

1. Matched a distinct problem or an opportunity with an effective solution.
2. Assured that the selected solution is adequately resourced and structured for implementation.

  

 A strong, logical coupling of a distinct problem/opportunity with a distinct solution improves your confidence. Here are two examples that should give you an idea of how it works.  The first describes the relationship between a solution and a problem, and the second describes a solution and its relationship to an opportunity.

Example of a solution coupled with a problem. In a product description, “IBM InfoSphere FastTrack helps speed time to value for strategic initiatives by enabling the translation of business requirements into completed data integration projects that may solve complex business problems.” Notice the solution, benefits, and problem solved.

Example of a solution coupled with an opportunity.  In a press release, “United Bank Limited announces strategic initiatives in the Middle East and network expansion in new territories” because there “exists immense business opportunities in Kazakhstan including the banking sector.”

You now have a logical-but-simple validation tool: Evaluating the relationship of the solution to either a problem or an opportunity.  The validation question is this:

Are the concepts in the strategy document coupled to either a problem or opportunity statement?

You can not assume that each and every stakeholder will agree with the coupling of proposed solution to problem or opportunity.  Thus, an important leadership role is to meet and work with important stakeholders. If they understand and agree (with each other), you have a solid framework for developing and strengthening alignment.  You have achieved validation

If there is disagreement, you have some useful insights about the issues that the implementation team will have to manage.

Why is it important to validate strategy? What else should be considered?

• Interpreting Strategy Documents: More Insights and a Valuable Tip! (leadingstrategicinitiatives.wordpress.com)
• Strategy is a Boundary-Spanning Activity (leadingstrategicinitiatives.wordpress.com)

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• Strategy is a Boundary-Spanning Activity (leadingstrategicinitiatives.wordpress.com)