Note from Art: this post was prompted based on my general rankling at the annual migration of corporate teams to strategy offsites.  There are more effective ways to get organizations focused and moving than this traditionally dysfunctional, low-outcome event, and the process that I outline below is one of those.

Both consultants and clients are all too guilty of massacring the strategy process inside organizations. Clients often treat strategy as an “event” with the expectation that there will be some meetings, some form of Ah-Ha type enlightenment and then some new initiatives. Involvement is grudging and political.

Consultants are often all-too-happy to enable the “strategy as event” process by facilitating a series of naval-gazing and Hubble-viewing sessions that while in isolation are appropriate, don’t really do much to improve anything about the organization’s ability to create value for customers and stakeholders.

An alternative to the tired approaches that start with retreats and end with lengthy power-point decks and feelings of relief that we can now get back to work, is to skip the S.W.O.T. and jump into the middle of the organization’s processes around activity/project/investment selection.

Now I have to offer a quick caveat for all of the process purists that will rake me over the coals for talking about strategic issues without the appropriate amount of market scanning, forces assessment and capabilities/mission/vision fit scrutiny. I get it and I’ll get there…just in different order than starting from the painful beginning.

How Do We Know What Investments Are Right?

At any point in time a firm faces a variety of core activity and investment choices. These can include infrastructure investments, new product/service development opportunities and potential new partnering arrangements. Invariably, each option has its own advocates and of course every advocate views his/her program as a must-do. Many firms default on making a tough call here because they lack the necessary strategic filters and they simply line the projects up.

One approach that I’ve both observed and ultimately used to great success has been to challenge teams to attack the selection process by creating a mechanism to evaluate options in as close of an apples to apples comparison as possible. This “Strategic Choice Analysis” can be implemented quickly and serve as a means of both near-term and long-term improvement for decision-making.  The short form on the process:

Establish core criteria about What’s Important:

Key stakeholders (does not have to be senior management…can be project teams or functional teams, depending upon how decentralized decision making is within the firm) work to establish the core criteria by which activity/investment choices must be scrutinized. Examples might include: directly improves the customer’s experience; impacts near-term sales; fits with our vision of the future; adversely impacts competitors to our benefit; reduces costs; critical to our long-term vision.

The process of vetting and reducing to 5 or 6 absolutely core criteria for evaluating and comparing choices is difficult at best.

If the team is taking things seriously, the criteria will be hotly debated with questions raised about importance to customers, impact on costs and revenues and impact on competitors. I advise using an external facilitator for this process.

The great news is you will find that deciding on “what is important” drives widespread discussion about the hard questions of performance and impact. It also begins the process of creating filters on “what not to do,” something that is often missing from a firm’s strategic discussions. Last and not least, establishing the criteria and the next step, creating weightings for each criterion beg tough questions and drive relevant data gathering as part of the fleshing out process.

Establish Weightings for Each Criterion:

Once a manageable number of criteria have been established, the painful but important process of weighting begins. Each criterion must be evaluated in isolation for its relative importance to the firm and ultimately to investment selection. The use of an objective facilitator will shave days off of the debate. I use a simple 1-5 scale, and of course, there is some subjectivity in defining the relative difference between a 3 or a 4, but that is healthy discussion, as long as it is resolved, captured and a mechanism created for understanding it.

Evaluate Investment Choices Against Each Criterion

The fun continues, but the dividends are huge as teams begin for the first time looking at an investment choice against the established criteria. If done right, the criteria are great equalizers, where infrastructure improvements and new product investments are compared and evaluated against what is most important to the firm. We already weighted the overall criterion based on relevance to the firm (1-5 for this macro weighting), now each project must be rated according to its fit for each criterion. I use a 1-10 rating scale here, and again, there is some significant background work to get people on the same page about the meanings of the relative rankings.

Compare Investment Options:

At the end of the day, you should end up with a series of projects or investment choices that have been evaluated and ranked for each criterion. A simple math exercise…multiply the criterion ranking (the 1-5 number) times the project/criterion rating (the 1-10) number, sum the numbers for each project and compare.

A Health Warning and Some Encouragement

There is no magical number, you should not blindly trust the output and remember that the process is highly subjective. However, it is less subjective than endless debate or the political decision-making that guides many choices.

The first few times through are rugged, but the process demands discussion of the relevant strategic topics. Does this project really help our customers or our ability to serve customers or beat competitors? Does it do it better than other alternatives where we could invest our time and money? Does it fit with our view of the future? Does it take into account the prevailing market forces? All of these are the questions that I want my teams debating, and we got there without saying S.W.O.T. even once.

The Bottom Line:

Get your team talking about the right topics and get them focused on assessing and comparing based on the criteria that are the most important to your success. Skip the summer strategy offsite and start the dialogue on determining what’s truly important, and you’ll find yourself and your organization moving and working the right things faster than you might imagine.

And remember that this is a process that screams for continuous improvement. You’ll get better, the strategic awareness will improve and the teams will make process improvements every time through it.