Jeff Standridge:
Hey guys, welcome to another season and another episode of the Innovation Junkies Podcast. My name’s Jeff Standridge.
Jeff Amerine:
Hey, it’s Jeff Amerine here. Now, what is it, season three? I lose track.
Jeff Standridge:
It’s either three or eight; I can’t remember.
Jeff Amerine:
Is this the one where John Dutton gets shot five times? You know, oh wait, that’s Yellowstone. That’s a different deal.
Jeff Standridge:
Yeah, different one, different one. Hey, good to see you, man. And really excited about what we’re gonna be doing over the course of this season. We’re gonna be really spending some time, four or five episodes at a time, talking about major elements of business growth and business success. And today, we’re gonna start, and over the course of the next three or four episodes, four or five episodes, something like that, till we get our fill of it, we’re gonna talk about strategy. The importance of strategy, how strategy affects organizational performance, and organizational dynamics. Maybe in another episode, we’ll talk about how do you align your business strategy and your organizational strategy. We’re gonna spend some time at some point talking about strategic planning versus execution and how do you make sure that you’re executing against your strategy. And then we’re gonna probably sum it up by talking about where does leadership fit into this whole concept or strategy, how does that sound?
Jeff Amerine:
No, that sounds great. That sounds great. And, you know, I depart with what the guys some years back from 37signals said that you know, that strategy wasn’t important, that you just had to go do things. I think strategy is really important. And so, why don’t you define it for us? What’s the definition, and why is it important, Jeff?
Jeff Standridge:
Yeah, great, great. You know, so I don’t know if I have a good, hard, and fast, you know, textbook definition of strategy, but I really define strategy as knowing who you are and knowing where you’re going. And those being kind of the two fundamental or foundational elements of strategy is who are we as an organization? And where are we going over a defined period of time, three years, four years, five years? And the reason that’s important is, if we don’t know who we are, then we run the risk of trying to be all things to all people, which is a recipe for going broke, number one. And if we don’t know where we’re going, then we run the risk of being distracted by every shiny object that presents itself, which is also a recipe for going broke. So that’s how to define it.
Jeff Amerine:
Yeah, I couldn’t agree more. And sometimes, people get kind of lost in the differentiation between strategic planning from day-to-day operations. How would you differentiate between those two?
Jeff Standridge:
Well, and even before we do that, you know, I struggle with the phrase strategic planning because it has such a bad rap.
Jeff Amerine:
Yeah.
Jeff Standridge:
I think we’ve even talked before on an episode that the prototypical strategic planning process engages everyone in the organization and makes an attempt to articulate everything that the organization is already doing so that no one gets their feelings hurt or feels that they’re not engaged in strategic activity. And the fact of the matter is everyone can’t be engaged in the highest level of strategic activity. And then what happens is they’ve got this binder that’s three to six inches thick that goes on a shelf, and it sits on the shelf for the next 11 and a half months. And then two weeks before the end of the year, they go, let’s see how we’ve done against our strategy. And so they’ve been guessing the entire year versus having a clear, crisp, concise strategy that answers the question, who are we, where are we going, and how are we gonna get there? That gets into the actual execution component or the day-to-day operational component. And using those together every single week, every single month, every single quarter to make sure that the organization is progressing down the path to success that it has planned for itself. That make sense?
Jeff Amerine:
Now it absolutely does. And it’s, and that connection between the strategy, which is tied to some other elements we’ll talk about in a minute, things like mission, vision, values, but that connection is really important. And the fact that it’s, it’s not just window dressing, and it’s something that is going to inform what you do tactically day to day.
Jeff Standridge:
That’s right. You know, the other thing that I like to talk about is, you know, when you think about these common elements or critical elements of strategic planning, we really focus on answering ten major questions for an organization. And those ten questions really fall under that, those kind of three overarching questions that we just talked about. Who are we, where are we going, and how do we intend to get there? You know, who are we, why do we exist? That’s our mission. Why were we created? Why were we put on this earth? And why does our organization exist? That’s mission. What behavior is expected from everyone in the organization? Those are our core values or our shared values. And we’ve been pretty direct about our belief on core values before that if you’re not willing to hire, fire, coach, train, and compensate against them, then they’re probably not really core values. They’re just nice words on a piece of paper. And then that third question is, what do our clients expect from us? We use that to define our brand promise. So who are we, which is our mission, why we exist, what behavior is expected from everyone in the organization, and then what do our clients expect from us or our brand promise?
Jeff Amerine:
And a vision is another key important part of that as well, right?
Jeff Standridge:
Well, that gets to the next question, where are we going? So who are we, which is mission, core values, and brand promise. Then we answer the next three questions, which really revolve around this overarching question of where are we going? And that’s our vision. So where are we going and when will we arrive? Our long-term targets are what are the things that we must accomplish for that vision to become a reality? Sometimes those are called strategic objectives, we call them long-term targets. And then what must we accomplish over the next 12 months to get… a proportional way down the path. In other words, if it’s a three-year strategic plan, we gotta get a third of the way there in 12 months. If it’s a five-year strategic plan, we gotta get 20% of the way there. So that second question of where are we going really breaks down into those three questions of what’s our vision, what are our long-term targets, and what are our short-term goals? Where are we going, when will we get there, what do we have to accomplish in the same timeframe to get there, and what do we have to accomplish in the next 12 months? So those.
Jeff Amerine:
And make sure to-
Jeff Standridge:
Those three questions really make up the essence of what we would call a strategy or a strategic plan.
Jeff Amerine:
Absolutely. And as part of that, you typically will evaluate various different strategic alternatives. It’s not always as clear-cut. I mean, it requires some trade-off analysis and different things to think about really, what are you going to try to do? And that all comes out during the discussion around the long-term targets, the short-term, what you’re going to accomplish within the next 12 months, those 90-day rocks, et cetera.
Jeff Standridge:
Yeah, and finally, you’re right, that’s a good segue into the last element of kind of operational or day-to-day planning. And that’s the real third overarching question of how are we gonna get there? So we’ve answered, who are we? We’ve answered, where are we going? Now we ask the question of how are we gonna get there? And there are four kind of breakdowns, if you will, of that overarching question. And one of those is what must we accomplish as a team and individually over the next 90 days, Geno Wickman and Stephen Covey would call those rocks. We call them quarterly priorities. What are the critical measures that we must review weekly in order to maintain the pulse of the organization? Those are called KPIs, and those are usually arranged into what we sometimes refer to as a balanced scorecard. What are the obstacles that stand in our way? So we anticipate the issues that could potentially derail us, and then we constantly work to solve and re-identify new issues as they arise. And then that final question is, how will we ensure 100% accountability? And that really revolves around the meeting cadence and the review process that we execute on a weekly basis to make sure we’re tracking against our plan success. So who are we, where are we going, how are we gonna get there? That’s really the overarching definition of strategy and the interaction of strategy and operational performance.
Jeff Amerine:
And it’s good stuff. And there’s other things that come out in that in terms of where you fit in the competitive landscape so you know what your positioning is. I mean, there’s a variety of different things that come into play as you’re going through that process that are, it’s really a useful exercise. And most organizations, how often should they go through this type of exercise?
Jeff Standridge:
Well, as you know, we refer to ours as the work we do as a strategic growth system. And a system is something that is ongoing. And so our experience is that many organizations do a strategic plan every three and five years, and they don’t revisit again for two and a half to four and a half years. And our process, as you know, has execution planning wrapped around it. And so we’re revisiting it every quarter in terms of the quarterly priorities. But then we’re doing a real deep review every year. How did we do on the last year’s 12-month targets, and let’s revalidate, is our vision still correct and tuned or our long-term targets still tuned? Do we need to refine or revalidate those? And then what are our new 12-month goals for the coming year? And so it’s really a system that happens. I like to suggest. A strategic plan is three years minimum to probably five years out maximum. So somewhere three, four, or five years. But then we are revalidating it and refining it on an annual basis.
Jeff Amerine:
Yeah, and it’s tied to your daily and weekly activities by virtue of the key performance indicators and the meeting cadence that holds everyone accountable to make sure that you don’t get lost. You don’t get back to firefighting and other things that are fundamentally sort of oppositional in some ways to fulfilling the targets on your strategy.
Jeff Standridge:
Yeah, we like to say that this plan is sacrosanct, and the definition of sacrosanct is too important or valuable to be interfered with. And so if you create this plan and your process is sacrosanct, that means we’re gonna meet at the same time every week for the same amount of time. We’re gonna start on time, we’re gonna end on time. We’re gonna review the same agenda items every single week. We’re gonna resolve issues every single week. And if someone is out or two people are out, The meeting is going to continue in their absence because it is sacrosanct, too important or valuable to be interfered with.
Jeff Amerine:
Man, you probably got an A in Latin when you took it, didn’t you?
Jeff Standridge:
Pig Latin. Ig-pay-atin-lay.
Jeff Amerine:
Sacrosanct is the word of the day for this session.
Jeff Standridge:
That’s right. Now there’s one other thing, and I know we need to land this plane–
Jeff Amerine:
Sure, absolutely.
Jeff Standridge:
Is that a good strategic plan is not a substitute for leadership judgment. And that’s something that we really try to drive home. You know, what happens when it’s done well and when it’s done right is let’s say you’re the leader of the organization, you’ve helped through the assistance of an outside consultant or within your own team to create a really robust strategic growth plan and an execution plan and cadence around that. And then an opportunity presents itself. And the first thing you want to do is ask yourself the question, how does this map against our strategic plan? Does this fit within who we said we are and where we said we’re going as an organization? And if the answer is yes, then the next steps are easy. If the answer is no, then the next step could be, then let’s ignore it. Then let’s put it aside because it’s a potential distraction. Or the answer might be no. But we didn’t anticipate the changes in the market or the changes in the landscape or the competitive landscape when we created our plan. So we may need to adapt our plan and go ahead and pursue this opportunity. But the point is a good quality strategic growth plan gives leadership the framework against which to make those data-based evidence-informed decisions.
Jeff Amerine:
Yeah, and the strategic growth system helps you take the best elements of strategic planning, tie it to a solid execution process with a regular cadence, and also have the built-in agility to be able to change things if new information arises as you’re going through the course of the planning period or the execution period during the course of the year, two years or three years.
Jeff Standridge:
That’s right. So if you want to learn more about the strategic growth system that Innovation Junkie brings to the table, check us out at innovationjunkie.com, and you can always give Jeff or me a direct outreach as well. Anything else for you?
Jeff Amerine:
No, it sounds like a good place to land the plane and say see you next time.
Jeff Standridge:
All right, we’ll see you next time. Thanks for joining another episode of the Innovation Junkies Podcast.
Jeff Amerine:
Very good.