Use StrategyTrees to Visualize Effective Strategic Planning

Why StrategyTree?

12Faces has developed the concept of StrategyTrees.
It is our approach to solving the problems of creating and implementing a strategy.

StrategyTrees refers to our planning framework.  In our minds;

• This is a way for you to “visualize” your entire strategy as a tree showing how all the parts of the “tree” are interconnected
• It also shows how parts of the tree are dependent on other parts
• You can’t have a leaf without a branch and a branch can’t survive without leaves to feed it
• The principal goal of the business is the tree’s root ball
• The mainstream strategy is the trunk of the tree
• Various branches carry the sub goals and directions of the Strategic Plan
• Twigs and individual leaves are the detailed layers in the Strategic Plan.

The tree analogy gives a strong mental impression, or visualization,  when you develop your strategy according to these principles.

Setting the Destination or Goal

Step 1 in any Strategic Plan:
Decide on the purpose of the plan; the goals or the destinations that it is to achieve.

These goals can vary depending on the nature of the Strategic Plan and the nature of your business.

The setting of the goal, or the destination, that we are aiming for, is an important first step. All the rest of the strategic planning exercise falls out under that

Read more for a compete introduction to GamePlan Destinations

When setting goals, keep in mind the SMART attributes of a worthwhile set of goals.  How to do Goal Setting for Business

There are no right and wrong goals.

There are only whatever goals suit you at a point in time. The goals will relate to the particular element of strategy that your business is trying to develop.

Critical Success Factors (CSF)

If Goals are the Root Ball of your business, it then follows that the Critical Success Factors are the Major Branches off the trunk of the “Tree”.

Critical Success Factors (CSF) are the things that must be done, or at least considered, to give you a decent probability of achieving your chosen goals.

The CSF can be anything that seems to be “Mission Critical” to achieve those goals. They will vary from strategy to strategy.

Ask yourself, what are the “Mission Critical” things to achieve your goals?  What do you have to cover in your Strategic Planning process to achieve your goals?
These are your CSF.
Another way to look at them is, if any of them fail, the strategic plan fails; or is partially crippled.

Examples:

Any Strategic Plan that has budgetary implications will typically have, at least, the following 3 CSF:

• Revenue:
  The raising of sufficient funds to execute whatever the Strategy is.

• Cost of Goods Sold (COGS):
  The costs directly related to achieving the necessary Revenue.
  These costs go up and down with the amount of Revenue raised.
  Also known as Variable Costs.
  An efficient operation aims to minimise these costs.

• Overhead Expenses (OE):
  Those expenses that are necessary for the operation to function.
  These costs don’t move very much with the amount of Revenue generated.
  If they do, they move in fairly large blocks at a time.
  OE include permanent staff, rent of premises, costs of utilities (electricity and water), other stable costs.
  They are also known as Fixed Costs.

Other CSF’s that may be relevant include;

• Investment:
  The funds available to support, grow or restructure.
  A determinant of the Return on Investment (ROI), a metric used to measure the efficiency of a for-profit enterprise.

• Target population:
  Who is the target client and what is the promise you are making to them.
  Example:
  A NFP homeless shelter will be targeting the homeless.
  The promise might be “always a hot meal available”.

• Support services:
  These are, what might be called, ‘enablers”.
  They don’t move towards the Goals themselves but facilitate other CSFs.
  The goals are more likely to be reached.
  Typical examples are HR and IT.

More CSF’s can be added at any time as your understanding improves.

At any time, Critical Success Factors (CSF) are the things that must be addressed.
They are “Mission Critical” to the strategy.

Necessary Conditions (NC)

For each of the CSF’s, there will be one or more “Necessary Conditions” (NC). These are the things that are necessary for the CSF’s to be achieved.

Example:

Under the Revenue CSF, you might think that it is necessary to have the following NC’s:

• A sales funnel to raise the necessary funds
• A product range which we sell to raise the Revenue
• A cashflow system to ensure that the money from Sales is realised. This would include things like Accounts Receivable and Accounts Payable.
• A pricing mechanism designed to position you in the minds of the consumers at the price point you want

Each and every one of these Necessary Conditions (and quite possibly others) have to get their necessary share of the enterprise’s attention.
This will ensure that the CSF of Revenue is fully addressed.

This means, for the Revenue CSF of the set of Critical Success Factors (CSF) to be successful, you must achieve your Necessary Conditions (NC).

The Strategic Planning team will give your Necessary Conditions greater or lesser importance. 

There is no limitation to the number of Necessary Conditions that you have in the system.

Successful CSF’s rely upon you listing all Necessary Conditions (NC). Leaving any of the NC’s out at this stage invites you to overlook their role (no matter how significant) in the pursuit of the enterprise’s goal.

Key Success Factors (KSF)

For each of the ‘Necessary Conditions’ (NC’s), there will be one or more activities that will be important in making sure that the NC’s are met.

Example:

• The Sales Funnel NC is necessary for the Revenue CSF.
• It will have several KSF’s that follow the normal sequence of a Sales Funnel.

These are:

• Lead Generation:
  A system to get people to express some form of interest in what your enterprise has to sell.
  Example: Use press or other media advertising as a way of getting people to become aware of your business. The hope is this will lead them to begin to buy from your business.
• Lead Qualification:
  Of the ‘Leads Generated’, a percentage will pursue the possibility of buying product from your business. Many of these will need some method of encouraging them.
  For example, when they give you their email address on a website to get some type of free product.  You then repeat market to their email address encouraging them to buy your product

• Sales Conversion:
  Once people have ‘Qualified’ above, the more active sales process begins.
  The aim of the active sales process is to convert the customer into making a decision to buy.

• Retention:
  Once you have a ‘Sales Conversion’ continue to promote to these customers.
  Having purchased once, encourage the customer to make additional purchases in the future.

• Advocacy:
  If you can make customers very happy, encourage them to tell their friends and colleagues.
  These referrals are invaluable in any business context.

Recapping to this point;

• the generation of Revenue NC is a Critical Success Factor (CSF) in achieving your goal of increasing growth.
• each the Revenue CSF is “parent” to several “child” Necessary Conditions (NC) necessary to generate Revenue. In this example, one NC is a Sales Funnel
• In turn, the “parent” Sales Funnel NC has 5 stages required to make it work.  These “children” of the NC,  and “grandchildren” of the CSF are the  five stages in a funnel, or the 5  Key Success Factors (KSFs).

This shows you how the branches, and some of the sub-branches and twigs, are put together.

Projects

The Projects layer in the StrategyTree is still strategic.

Projects are necessary in order for the Key Success Factor’s to feed the Necessary Conditions to achieve the Critical Success Factors and ultimately the business Goals.

We call these Projects because there will be quite a few of them and many of them will not have a very long life. Projects are a way of fleshing out the various activities that will need to be undertaken. They are completed as one small stage of a larger process.

The Strategic Plan itself may have a life of several years, but the Projects may have a much shorter life serving their immediate KSF parents.

Example:

Let’s continue with the Revenue/Sales Funnel/Lead Generation KSF branch example above.
You decide to have some Projects associated with building an effective website to generate leads.

This might include individual Projects aimed at:

• Designing an attractive website.
• Taking out Adwords to promote the website in Google searches.
• Paying strict attention to the Search Engine Optimisation (SEO) of the website.
• Adding various participation and involvement tools to the website. Encourage people to provide their email address in return for a “freebie”.

In their own right, each of these Projects may not take very much time.

It is easy to see how Projects are, in fact:

• ‘Mission Critical’ to their parent KSF’s.
• Which are in turn ‘Mission Critical’ to their parent NC’s.
• Which in turn are ‘Mission Critical’ to their parent CSF’s.

AND

• Ultimately to the Goals of the organisation.

Tasks

For each Project, there will be some specific Tasks to be undertaken.

Example:

For the “designing our website” Project for the KSF of Lead Generation, we have the following tasks:

• Design the menu structure of the proposed website.
• Block out text to fall under each of the menus in that structure.
• Consider the “look and feel” of the site, including such things as colour scheme, font, speed etc.
• Consider Search Engine Optimisation (SEO) by careful use of key phrases in headings and on pages. Search Engines will develop an understanding of what is to be done on a page. Also consider meta tags.

Because of their very short lifespan, you may decide not to include Tasks in your StrategyTree system.  They are not particularly “strategic” but rather “tactical” in nature.

Alternatively, Tasks can be managed by either ‘Kanban‘ or our GamePlan and Sprint systems which are much better tools for managing of “tactical” tasks.  As read Take Advantage of Agile/Scrum/Kanban to Increase Productivity