Random Thoughts from a CTO: Strategy

A Great Analysis Tool

Wed, 21 Jun 2006 21:38:46 GMT

Many of you probably know about SWOT analysis, but unless you are involved some kind of strategic planning or process improvement you may not know about it. This post is for you.

The first step with any kind of planning or improvement is to do an assessment to determine "Where you are now?". This can also be called situational analysis, and the best tool to gather the information necessary is called a SWOT analysis.

SWOT is an acronym for the four major components of this analysis:

Internal Strengths - Where are we doing well? What is working right?

Internal Weaknesses - Where are the "holes"? The weak spots?

External Opportunities - What are opportunities outside of the scope of our analysis (product, service, process, department, etc.) that we could explore in order to improve?

External Threats - What are outside influences that could have a negative impact?

How do you use this information? Let's discuss each area in more depth:

Strengths - Do our strengths align with our goals, in other words, are there strengths that don't matter? Are there strengths that we should have? Also, how do we maintain or improve upon these strengths?
Weaknesses - What do we need to do to reduce these weaknesses? Do we have the capacity or ability to do so? Can we succeed in spite of these weaknesses (in other words, focus more on the strengths)?
Opportunities - What do these opportunities cost vs. benefit? How do these opportunities align with our goals? How do these opportunities improve our strengths or reduce our weaknesses?
Threats - These are essentially your risks. How are you going to take care of these threats (reduce the risk, avoid the risk, plan for mitigation, transfer the risk)? What is the probablility of these threats happening? What would be the impact should these threats occur?

From this information you will develop action plans in order to improve and manage the strengths, reduce or eliminate weaknesses, explore the opportunities and determine mitigation plans if the threats become "real". You can apply this kind of analysis against your products, your services, your departments, your competitors, your customers, your vendors, your processes, your tools....you can even use it as a tool to evaluate individuals. By applying this technique to each of these, you should get an honest assessment of the current situation.

The more people and perspectives that you have contribute to this analysis will provide you will more to work with. It is very important that each contributor is as honest as they can be with the analysis. Many people will try to paint a picture of what things should be or can be. The goal is to identify where the situation currently stands! It is from the action lists that you create a plan of what should or can be.

Try this out the next time that you need to get a "handle on the situation" and take a SWOT at it! Let me know how it works out for you. I don't think you will be disappointed.

Strategic Planning Myths

Fri, 05 May 2006 17:45:39 GMT

Skip Reardon at Be Excellent, has a great post today regarding how management (in particular the CEO) may view strategic planning. Here is his list:

“We don’t need a strategic plan!”
Strategic planning can only be done at a resort.
“It interferes with our real jobs.”
“We can do it without any help.”
Planning will predict the future.
Planning is done when the retreat is over.
The plan is a binder on a shelf.
The plan will automatically produce results.
If the CEO says it, it will happen.
“The plan is too confidential to be shared with regular employees.”

I can account that I have heard some of these things said. Here's some others:

"Things change too fast to plan."
"Strategic planning is just too hard."
"We need to react faster than we can plan."
"Planning should only involve the executive team."

Strategic planning (and I'm talking planning not coming up with an elegant plan) is hard work, should involve the entire organization, and can help you better understand your past, present and possible future. The entire organization needs to understand this plan and stand behind it. If there is confidential information about the future, don't provide full details on execution until you are ready to act with the right people. Lastly, planning is nothing without execution. This requires discipline and a sense of intense focus. You may not be able to do that on your own. In fact, having a third party that can be a great facilitator and not "too close to the action" can help the organization see the big picture and not get off-track.

The Art of Follow-Through

Mon, 30 Jan 2006 18:24:07 GMT

Laurence Haughton, author of "It's Not What You Say..It's What You Do" (to see my review of this book, click here), has a Microsoft Live Meeting coming up next month. It's called The Art of Follow-Though and here is what is covered:

Good organizations invest heavily in strategic thinking and planning. Yet, studies show those same companies routinely fail to turn their best-laid plans into lasting successes. In The Art of Follow-Through Haughton explains what causes this critical breakdown and then shares the step-by-step process for flawless execution, providing attendees with the methods for improving follow-through at every level.

Key issues covered include:

The obstacles that trip up 66% of all managers
The building\nblocks of a flawless follow through process"
How you can make\ensure the “right” people are assigned to each critical task
How the best get\nmore “buy-in” for your company’s strategic changes and new ideas
The building blocks of a flawless follow through process
How you can make sure the “right” people are assigned to each critical task
How the best get more “buy-in” for your company’s strategic changes and new ideas

To learn more and sign up for this event (February 28th, 9:00 AM PST), go here.

A good metaphor for strategy

Wed, 28 Sep 2005 21:09:04 GMT

Dwayne over at the newly designed Genuine Curiosity has an excellent post entitled "Instructions vs. strategy". He uses a great metaphor to describe the difference and balance between strategy and instructions (which include formal processes/policies/procedures):

Imagine that a giant labyrinth is before you.

If someone gives you a set of directions to get through the maze, you’ll do fine in that maze but your directions are useless in the next labyrinth. And, if you lose the map, you’re in big trouble.
In contrast, if someone gives you a strategy like “Keep your right hand on the right wall and follow that wall until you get to the exit.” you might take a bit longer to get through, but that principle will work on any labyrinth.

Read more in his post. I have to agree with Dwayne that companies dive quickly into the details and create a lot of formality in the form of heavy processes, policies etc. In today's fast paced and ever changing world, companies can get bogged down in "red tape" and forget about the big picture.

A strategy is that big picture. If the strategy is clear, measurable and relevant, it should provide the general guidelines that drive decisions and actions from the people in the organization. By being relevant, it will need to be reviewed and updated often to reflect the current state of the organization as well as the outside world - customers, competitors and partnerships.

As Dwayne mentions at the end, you can't have a strategy without some process just like you can't have a bunch of process without any kind of strategy. The trick is to determine the proper level of detail for both for the company to be "agile" - flexible, lean and responsive.

Lately, I have been doing a lot of thinking about my organization and moving towards a lean, agile organization and how strategy and process fit into it. Dwayne has confirmed some of that thinking in this post and I appreciate him for that!

You will see in many of my posts in the near future that I will spend around strategy and agile/lean thinking from a software engineering perspective. Though some will talk about software development, there will be a lot of concepts that should translate well in other industries.