In my first post I talked about strategy management and how it is continual, dynamic and iterative with four key “gears” – Thinking, Planning, Execution, Tracking – that interactive with each other. In this and the next posts I will talk about each of the gears beginning the Thinking gear.
The Thinking Gear in Strategy Management
The Thinking Gear involves the continual assessment of the strategic context (internal & external) in which your organization operates to understand the critical implications to your organization. It is about turning data into knowledge by asking three questions like: What do I need? How do I get it? What do I do with it?
- Data identification – What do I need?
In a world that inundates us with information, the difficulty is knowing what information is important and what is just noise. The key is to ask why is this information important to our organization? What question are we trying to answer?
- Data collection & validation – How do I get it?
Once you are clear on what your data needs are, you need to collect and validate it – as the saying goes “garbage in = garbage out”. The key question here is what is the most effective way to collect the information we need and how often? Some data will be readily available and some not which may mean relying on anecdotal data. This is not a bad thing as some anecdotal (i.e. gut instinct) can be quite powerful (note: Malcolm Gladwell’s book Blink provides an excellent overview on power and weaknesses of gut instinct). The other key question is how often we need to be looking at the data. Some require constant monitoring while other data may require only quarterly or even yearly checks.
- Analysis – What do I do with it?
This is the step that turns the data into knowledge by pulling out the critical implications for the organization – getting to the “So what?”. For instance, data may indicate that your competitors have a cheaper source of raw materials than you. Using a SWOT analysis you would identify this as a weakness and pull out the critical implication that you probably can’t have operational excellence as a value proposition (i.e. compete on price) because your competitor will always be able to undercut you. The other point to note is that there is no one right way to analyze data. There are many different tools (SWOT, Porter’s Five Forces, McKinsey’s Portfolio of Initiatives, spreadsheets, etc) and like a good mechanic knowing which one to use in which situation makes the job much easier.
What do you Think About The Thinking Gear of Strategy Management?
Stay tuned for future blogs on the last three gears. In the mean time I would love to hear your thoughts, comments and experiences on strategy management.