Strategy frameworks are numerous. There is one for any scenario and there’s a chance that selecting one may actually overwhelm someone new to the field. That’s why I have rounded up the most effecitively used strategy frameworks from among them to help you select the one that best suits your purpose.
What Is the Strategic Framework?
A strategic framework is a structured method used to define how a project or initiative supports the key objectives of stakeholders. At the highest level each strategic planning process can be broken down into four components:
- Business objective. What will the project or initiative achieve? Answers the ‘What’ we are doing
- Approach. How will that achievement be realised? Answers the ‘How’ we will do it
- Measurement. How will achievement be measured and reported? Answers the question of ‘how do we measure progress’
- Target. What is the forecasted improvement that will define success? Answers ‘how do we know we have arrived’
To ensure success, the strategic framework must be based on the organization’s mission, vision, and goals (MVG). The mission statement explains the purpose of the organization, why the organization exists. The vision statement describes what the organisation aspires to be; it describes the “future state” organisation. Goals articulate what needs to be achieved by when, but do not describe how those goals will be achieved.
That’s where a strategic framework comes in. The strategic framework addresses how a project or initiative will help the organisation achieve its MVG.
Strategic Planning Model
A strategic planning model is actually a collective term for a number of elements that contribute to the strategic planning process. The core components of a strategic planning model typically include:
- The concept model for the strategic planning process (Hoshin Kanri, OKRs etc)
- Frameworks provide the basic structure underlying business probelm (Profitability, growth etc)
- The governance to help you manage and track your strategy.
A strategic planning model refers to the overall structure that you apply to your strategic planning process. It roughly describes the various components and how they interact with one another. A strategic planning model functions much the same way, in that it describes each of the elements of a coherent strategy – what they do, how they fit together and in what order.
A strategic planning framework refers to the conceptual approach you will bring to populating your strategic plan. These are approaches on how to solve strategic planning processes. Apply the most relevant framework here. That means that regardless of which strategic planning model you choose, you can apply any number of frameworks to help you actually come up with your goals!
Another way to put it would be to say that strategic planning models provide the high-level structure – whilst strategic planning frameworks provide design principles for the detail within our strategic plans. In other words, you should always start by selecting your strategic planning model and then move onto to selecting your strategic planning framework. You could even mix and match multiple different frameworks into your model – i.e. you could start by doing a SWOT Analysis, and then apply McKinsey’s 3 Horizons of Innovation on top.
The goal here is not to steer you to a particular strategic planning model, as your situation is unique, instead these options are here to give you perspective on how you can approach your planning before you dive into the detail.
Essentially, there are three parts to any good strategic planning model:
Model refers to the different components of your strategic plan and how they all fit together. For example your structure may start with a Vision Statement, then flow into Values, Focus Areas and any number of Goal levels.
Frameworks are essentially problem-solving methodologies that you can apply to help you come up with your goals, as well as categorise your goals to ensure they’re balanced and will meet your needs.
Governance refers to how you’ll go about actually tracking and reporting on the goal elements of your strategy.
Strategic Planning models
This strategic planning model is the traditional strategic planning process, simple enough to understand, and has the benefit of also being easy to implement when it comes to the actual execution of your strategy.
Here’s a quick look:
Let’s dive into two of the key elements of the Linear Strategic Planning Model – structure and governance.
The structure elements of this strategic model are as follows:
- Identify your Vision Statement – this is the statement(s) that describes why the organisation exists, i.e. its basic purpose. The vision statement can evolve over the years
- Define your Values – describe the way in which you want your organisation to behave as it strives towards its Vision.
- Craft your Focus Areas – these articulate the key areas that you’ll be focusing your efforts on to help deliver you Vision.
- Create your Objectives – your strategic objectives define more specifically the outcomes you want to achieve under each of your Focus Areas.
- Define your KPIs – each of your Objectives should contain at least one or two KPIs to help you measure whether or not you’re close to reaching your desired outcomes (Objectives).
- Specify your Projects – these are one of the most critical elements in your strategic planning model, as they state exactly what actions you will take to deliver against your Objectives.
The governance elements are:
- Monthly Strategic Updates – these apply only to Objectives and require the owner to provide a narrative update on the overall progress towards the Objective.
- Project Updates – these are ad hoc updates made against the Project level of the plan and include general updates and progress.
- KPI Exceptions – these are required when KPIs are outside of their tolerance level and explain the difference and any actions being taken to address the gap.
When you combine the goal and the governance elements of this strategic planning model, you get a comprehensive set of tools that you can use not just for creating your plan, but also executing it.
Hoshin Kanri is a strategic planning model used by organisations who want to drive a consistent focus throughout many levels of their structure. As such, it’s well suited to large organisations with different layers of management including at least ‘top level’ executive management, ‘middle managers’ and ‘front line’ staff.
Let’s dive into the detail of the Hoshin strategic planning model with a quick visual:
Let’s dive into the structure elements of the Hoshin Kanri strategy model:
- The first level of the Hoshin Kanri strategic planning model refers to our vision – a distant horizon that will guide everything that sits beneath.
- We then move onto our 3-5 Year Strategies – these are high-level summaries of what we want to achieve (both qualitatively and quantitatively).
- Beneath that, we will define Annual Objectives, which will be split between different departments.
- Finally we have our Action Items – specific things we are going to do to reach our Annual Objectives
Now let’s take a look at the governance elements of this strategy model:
- Monthly Reviews – these are done against the Annual Objectives and require the owners of the goals to provide descriptive updates of progress.
- Annual Reviews – these are also done against the Annual Objectives, however, happen at the end of the time period and encompass a decision point as to whether to mark the Annual Objective as complete or roll it over into another year.
There are actually quite a few different ways to implement the Hoshin Kanri strategic planning model – the above is simplified but covers most of the core elements.
Thee Objectives & Key Results (OKR) strategic planning model was popularised by Intel and more recently Google. It focuses on quarterly sets of ‘OKRs’ which are set and reviewed by every management level in the organisation. The OKR strategic planning model looks something like this:
As with the Linear Strategic Planning Model and Hoshin Kanri – the OKR strategy model is made up of two key elements being goals and governance. The structure looks like this:
- Objectives – These describe the outcome that you are looking for in the current quarter (remember, OKRs are designed to evolve each quarter).
- Key Results – These are specific measures that describe your progress towards your Objective in numerical terms.
- ToDos – these are small ‘tasks’ that sit against each of your Key Results that when completed, should take you closer towards achieving that Key Result.
Governance is a critical component in the OKR strategic planning model. The typical governance on OKRs includes:
- Weekly Check-Ins – Each Key Result should have a weekly check-in which covers your confidence level in the achievement of that OKR as well as remediation steps and general progress updates.
- Quarterly Review – For each Objective, a formal quarterly review should be undertaken where that OKR is given a ‘score’ (usually from 0 to 1) and a decision is made on what to do with that OKR in the next quarter.
Frameworks
Use these Frameworks to provide a structure and workflow for your strategic planning model:
- Profitability Framework
- Revenue Growth Framework
- Market entry Framework
- M&A Framework
- Competitive response Framework
- Valuation Framework
- 4C Framework
- 4P Framework
Choosing the Right Strategic Planning Model
In all honesty, the examples of strategic planning models that we’ve picked have quite a lot in common. That’s for a good reason – the best strategic planning models are simple, contain all the right elements, and combine goal setting with governance to give you a strategic planning model that will serve you well when it comes to execution.
As such, you can’t really go wrong with any of the strategic planning model examples we’ve outlined here. We’ve made no secret of the fact that we think that the Linear Strategic Planning Model is arguably the best (that’s model number 1 above). But ultimately the choice is yours.