Many of my own personal management frameworks were imprinted into my brain during my years at Procter & Gamble. One of the most fundamental is that plans should flow from strategies. It was right then. It’s still right. But it’s theoretically elegant and practically useless without the enablers required for success including human capabilities.
A more complete value creation framework geared for success includes these components:
- Purpose (mission, vision, values and guiding principles – including the core nature of business and culture)
- Overarching strategy and posture
- Strategic priorities
- Enablers and human capabilities
For example, a medical practice’s
- Purpose was to help their patients have healthy, productive lives.
- Their overarching strategy was to serve more of their patients’ needs.
- One of their ensuing strategic priorities was to fix broken ankles.
- That required an enabling X-ray machine and the capability to use it.
- So, they built plans to acquire an X-ray machine and hire the required people before offering the services to their patients.
Purpose gets at what matters and why and includes the mission (why), vision (what), values and guiding principles (how), one of which is the core nature of the business: design, produce, deliver, service.
The overarching strategy and posture drive choices around the creation and allocation of resources to the right place in the right way at the right time over time in order to:
- Win by being: Predominant/top 1%; Superior/top 10%, Strong/top 25%
- Not lose by being: Above average/competitive, Good enough/scaled, or
- Not do by: Outsourcing or not doing at all.
Strategic priorities are things directly increasing customer impact, revenue, and profitability, focused on either:
Driving Customer Impact and Profitable Commercial Growth
- Product/service development, pricing, marketing, business development (markets, partners, etc,) increase sales to existing and new customers
Enhancing Operational Rigor & Accountability
- Supply chain, production, distribution, service optimization
Enablers and Capabilities are force multipliers to overcome obstacles and make possible and improve the things directly increasing customer impact, revenue, and profitability, including things like:
- Brand positioning and marketing materials, collateral, tools (including websites, etc.)
- Data/Technology/IT/Security infrastructure
- Operational infrastructure including procurement and supply chain
- Organizational/HR infrastructure
- Financial Reporting/Tax/Accounting/Compliance infrastructure
- New Product Development infrastructure
Systems & Processes
- Enabling commercial growth and operational rigor
Balance Sheet & Cash Flows
- Deferred maintenance and modernization investments
- Growth oriented capital spending
- Back office: finance, tax
Mergers & Acquisitions
- Bolting on to foundational platform
- Senior Leadership (Commercial, Operations, Tech/IT, Finance, HR, Legal, R&D, M&A)
- Middle Management
- Individual and team strengths including project management/transformation
Understand that this is a simplifying framework. You can go into excruciating depth into the details of much of this. But, having a simplifying framework helps everyone understand how things fit, so they can ratchet up their best current thinking together.
The CEO has to own the vision and culture. So, start with their going-in hypothesis.
Then have the most senior leadership team turn that hypothesis into an understandable description of 1) purpose, 2) overarching strategy and posture, 3) strategic priorities.
Then give the next level of managers clarity on direction, resources, bounded authority, and accountability to flesh out the enablers and capabilities, and craft detailed plans.
Those plans should include sequenced actions/initiatives, resources, measures of impact, milestones/timing, who and how people will be called to account to ensure flawless execution, and linkages and interdependencies.
Phasing matters. Just as there are right and wrong places and right and wrong ways to allocate resources, there are also right and wrong times.
Everyone wants to increase impact, revenue, and profitability. But, in some cases, if you move too fast, you break the system. Make sure you shore up your foundational enablers and capabilities to enhance execution of the strategic priorities that depend on them in the right order at the right time. Step by step down the path to success.