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Frameworks

Creating Your VUCA Strategic Plan

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“Without goals and plans to reach them, you are like a ship that has set sail with no destination.” – Fitzhugh Dodson

Introduction

The first half of 2020 has certainly proven that we live in a fast-moving and extremely unpredictable world. For leaders of organizations it important to note that these characteristics are not going away, in fact they seem to be accelerating.

I have adopted the military term “VUCA” as the best description for this new operating environment – It is an acronym, standing for: Volatile, Uncertain, Complex, and Ambiguous. It is also the philosophical foundation for the VUCA Strategic Planning framework, which is designed to be an agile approach for strategic planning that not only accommodates uncertainty, but also embraces it.

In the context of managing organizations, leaders need to consider these uncertain VUCA internal and external factors when they set long-term goals and develop strategies to achieve them. This process culminates in the creation of a VUCA Strategic Plan for the organization.

Definition of a Strategic Plan

In simple terms, a plan can be defined as a diagram or list of steps, with details of timing and resources, that will be used to achieve an objective, overcome a challenge, or accomplish some specific task.

A VUCA Strategic Plan is a complete contingent plan of action that an organization uses to achieve its long-term goals in the market. It lists out the various possible situations a business is likely to find itself in and specifies the strategy and set of actions that it should take in each of the situations in order to achieve success.

I have heard it said that a strategic plan can be thought of as a very structured approach to problem solving. At a macro level, there are three vital components: (1) Thoughtful diagnosis that defines or explains the challenge or opportunity; (2) A guiding policy, or strategy, for dealing with the defined challenge; and (3) An action plan designed to carry out the strategy.

When done well, the strategic plan serves as a blueprint, which codifies the planning foundation and strategy decisions made by the leaders of the organization, and the roadmap for moving forward. In addition to summarizing the Core Ideology, Envisioned Future, Situational Awareness, and Strategy, it should detail a comprehensive action plan for the team that brings the organization closer to achieving its long-term goals. It is essentially articulating the “who” and “what” and “where” and “when” for the organization to take action.

It also serves as a vital decision-making framework for business leaders to evaluate options, consider alternatives, and select the best approach. These decisions, which occur daily throughout any organization, include everything from capital investments to operational priorities to marketing to hiring to sales approaches to how each individual manages their day. Without a strategic framework to guide these decisions, the organization will be unfocused and runs the risk of not achieving the desired results and creating confusion and dissention amongst the team.

It is important to call out that a VUCA Strategic Plan is not focused on choosing specific goals (that is the purview of leaders and boards of directors as part of the planning process) but only with how to achieve those goals once they have been identified.

VUCA Strategic Planning Framework

Here is a quick overview of the VUCA Strategic Planning framework: The Core Ideology of the organization is the planning filter that any strategy can be evaluated against, and the Envisioned Future is the definition for the desired future state. When combined with robust Situational Awareness, detailing the current state of the organization and its operating environment, your Core Ideology and Envisioned Future create the springboard for strategy development. Previous articles have described these three planning elements in much greater detail:

  • Core Ideology – Defining the mission, values, and purpose of the organization. These elements describe why the organization exists and what it stands for. They form the “true North” guideposts for making strategic decisions and are the foundation for any VUCA plan.
  • Envisioned Future – Defining a clear vision of what the organization aspires to become or achieve and your long-term goals. These elements explain the desired “future state” of the organization, and the long-term goals you and your team are working towards achieving in order to get there.
  • Situational Awareness – A thorough analysis of the environment in which the organization operates. Situational awareness involves knowing where you are (“current state”) and being aware of what is happening in your environment (internal and external perspective), in order to better understand how information, events, and one’s own actions will impact both immediate and future outcomes.

With this planning foundation in place, leaders are then ready to consider strategic options that will enable the organization to bridge the gap between the current state and the desired future state while factoring in the operating environment as revealed by the situational analysis. This is where strategy comes into play.

  • Strategy – Defining the approach that will guide individuals and teams on “how” to achieve the short-term objectives that move the organization from its starting point towards achieving its long-term goals. Strategy plays a vital role in VUCA strategic planning. It is quite literally the vehicle that will help the organization bridge the “gap” between where it is today (its current state) and where it wants to be in the future (desired future state).
  • Strategy Decision – Once a strategy has been formulated, leaders must then decide: Is it the right strategy to help the organization achieve its long-term goals? If the decision is to move ahead with executing a chosen strategy then it is time to commit, and proceed with creating a complete Strategic Plan designed to ensure the successful execution of it.

In its simplest form, a well-crafted strategy should bridge the gap between “current state” and “future state” for the organization. The strategic planning process therefore culminates in the creation of a VUCA Strategic Plan.

  • VUCA Strategic Plan – A clear time and resource based plan, that details the strategy and actions by which the organization intends to reach its Envisioned Future.

Key Elements of a VUCA Strategic Plan

Developing a logical and realistic action plan is critical for success. It should detail the high-level actions the organization is capable of taking, and the required resources, that will result in overcoming the defined challenge or achieving the desired outcome.

Key elements of a VUCA Strategic Plan include:

  • Planning Foundation – It is important to document and reinforce the Core Ideology and Envisioned Future of the organization, and clearly identify the strategic gap. Also, document the key Situational Awareness elements and analysis, covering both the internal and external perspectives, and clearly articulate the chosen strategy.
  • Objectives – One of the key components of a VUCA Strategic Plan is to create short-term objectives which contribute and drive towards the attainment of the long-term goals articulated in the Envisioned Future of the organization. Objectives are delegated and resourced, and become key drivers of activity for the team. For maximum effectiveness, objectives should be defined using the SMARTER framework.
  • Resources – In the context of strategic planning, resources are the people, money, and assets required to execute each element of the plan. Effective resource planning not only ensures the successful execution of the plan, but also establishes ownership of each task.
  • Timelines – It is important to have an estimate of how long each element of the plan should take to complete. In addition, the plan should have anticipated starting points and deadlines, and often have interim check-points identified. This will help load balance and sequence the work, but also serves as a vital management KPI to ensure plan execution is on track.

Having all of this information documented in one coherent and easily shareable plan will not only help leaders to manage the activity, but also significantly improves the chances of gaining support and adoption from employees and stakeholders. This is a critical component of successfully executing your plan.

Next Steps

Once your core VUCA Strategic Plan is developed, there are three final elements in the VUCA Strategic Planning framework designed to ensure successful execution and the achievement of the defined long-term objectives for the organization:

  • Scenarios – As the COVID-19 pandemic has so clearly demonstrated, we should always prepare for the unexpected. In the Scenarios phase of the VUCA Strategic Planning process, we seek to do that by asking “what if” questions in order to identify potential VUCA impacts that could derail the strategy or impede our ability to achieve the defined objectives. Documenting these scenarios and your potential response(s) is a vital component of every VUCA Strategic Plan.
  • Portfolio – In addition to Scenario planning, there is another important risk mitigation mechanism built in the VUCA Strategic Planning framework. The concept of Portfolio management is often deployed by large organizations who want to reduce their risk exposure by making several competing strategic bets. It is also common to find it in the startup world where organizations sometimes run multiple simultaneous experiments to see what gets the most traction. The goal is to mitigate risk of primary plan failure. The basic concept is to have a fall back position in case the primary strategy and plan blows up.
  • Management Cycle – This is the final element of the VUCA Strategic Planning framework, and the most important. I like to call it the “action phase” of strategic planning, because once the plan has been delegated to the responsible individuals and teams, this is when they take action. Once execution begins, it is also where the leaders of the organization and their teams will spend most of their time monitoring progress and making important decisions and course corrections including the continuous loop of: deciding whether to start/continue, taking action, evaluating results/feedback/inputs, and deciding whether to pivot, or stop.

Much more on these final three elements in future articles.

-Onward

Making the Strategy Decision

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“The inability to make decisions is one of the principal reasons executives fail. Deficiency in decision making ability ranks much higher than lack of specific knowledge or technical know-how as an indicator of leadership failure.” – John C. Maxwell

Leaders and their teams must make strategic decisions throughout the VUCA Strategic Planning process. Aside from the ultimate “go/no-go” execution decision, perhaps no decision is more important that the one made after a strategy has been formulated: Is it the right strategy to help the organization achieve its long-term goals, and should a strategic plan be created in order to execute the chosen strategy?

Decision-Making Defined

In psychology, decision-making is defined as a cognitive process, which results in the selection of a belief or a course of action among several possible alternative options. In a business context, decision-making is the process of identifying and evaluating alternatives to pick one best option based on the knowledge, experience, values, preferences and beliefs of the decision-maker. 

Research suggests that each of us make thousands of decisions every day, many of them sub-consciously. These decisions range from the mundane, which generally do not require much thought (for example, “White shirt or blue shirt?” or, “Do I want another cup of coffee?”) to the more complex (ex. “Should I look for a new job?” or, “Where do I want to live?”) which can be significantly more difficult to decide.

It is the same with organizations. Leaders and their teams are making decisions every day and at every level. Decision-making within the organization can range from routine operational decisions, to more complex managerial decisions, all the way up to challenging strategic decisions, which can shape the future trajectory of the organization.

The Peril of Making Strategic Decisions

The most important and difficult decisions – the strategic decisions with significant consequences for the performance of the team or the future success and viability of the organization – carry the most risk for leaders. Strategic decisions call for a thoughtful approach.

Strategic decisions are risky, and never easy. They often cause leaders the most angst because they are decisions that are both high in potential impact, but also high in terms of investment of scarce company resources. Furthermore, strategic decisions are not transactional (like a consumer selecting a box of cereal at the grocery store) but instead are complex and dynamic situations where the leader can influence the outcome by how they lead and manage the team. Adding even more complexity, their organization is likely competing with others – where picking the right strategy and doing better than rivals could mean the difference between winning and losing, between growth and bankruptcy. Adding in the additional uncertainty of a VUCA (volatile, uncertain, complex, ambiguous) environment just intensifies the risk.

This means strategic decision-makers need two vital, yet often contradictory skills: clear analysis, and the ability to take swift and bold action in the face of uncertainty.

Great Leaders are Decisive

Great leaders are decisive – they understand how to balance emotion with logic, and then effectively make decisions that positively impact their organizations and all their constituents.

Making good strategic decisions in challenging situations is always difficult because these types of decisions involve change, uncertainty, anxiety, stress, and sometimes the unfavorable or less than enthusiastic reactions of others.

Great leaders also have great situational awareness – they instinctively know when to move quickly and proceed with decision-making using whatever information is available, versus when they need to take more time and gather additional information.

Avoiding Paralysis by Analysis

Uncertainty creates an uncomfortable decision-making platform for leaders, and can lead to a phenomenon called analysis paralysis.

This is a common dynamic where decision-makers try to eliminate the uncertainty they are facing by over-analyzing the situation. Often to no avail.

The challenge with delaying a decision in order to gather more information is knowing when to stop. Many leaders mistakenly believe you cannot have too much information, but data gathering takes time and having too much data to consider can be paralyzing, and a distraction from taking a big picture view or focusing on the most important data points.

The reality is most decisions, especially the strategic ones, are made with less than perfect information. The pressure of trying to craft strategy that overcomes the uncertainty caused by a VUCA environment just ends up wasting valuable time and energy – scarce resources better spent on planning and execution.

Getting to Done

Effective strategic decision-making has another vital element: It is not just about selecting the alternative that best satisfies the business objective, it is also about making sure it is something that is implemented and actually gets done.

An unfortunate by-product of focusing too hard (and too long!) on selecting the ideal option is neglecting the opportunity cost of not taking action sooner.

Scott McNealy, co-founder of Sun Microsystems and its CEO for 22 years, was asked how he made difficult decisions and responded by saying, “It’s important to make good decisions. But I spend much less time and energy worrying about ‘making the right decision’ and much more time and energy ensuring that any decision I make turns out right.”

Merely deciding on the “best” option does not guarantee a successful outcome, just as making a poor choice does not necessarily doom the initiative to failure. It is what happens next, which determines your success.

As the immortal management theorist, Peter Drucker said, “Unless a decision has ‘degenerated into work’, it is not a decision. It is at best a good intention.”

This is the connection of decision-making into the VUCA Strategic Planning framework.

Where Does Decision Making Fit into VUCA Strategic Planning?

As a quick refresher, the Core Ideology of the organization is the planning filter that any strategy will be evaluated against, and the Envisioned Future is the definition for the desired future state. When combined with robust Situational Awareness, detailing the current state of the organization and its operating environment, your Core Ideology and Envisioned Future create the springboard for strategy development. Previous articles have described these three planning elements in detail:

  • Core Ideology – defining the mission, values, and purpose of the organization. These elements describe why the organization exists and what it stands for. They form the “true North” guideposts for making strategic decisions and are the foundation for any VUCA plan.
  • Envisioned Future – defining a clear vision of what the organization aspires to become or achieve and your long-term goals. These elements explain the desired “future state” of the organization, and the long-term goals you and your team are working towards achieving in order to get there.
  • Situational Awareness – a thorough analysis of the environment in which the organization operates. Situational awareness involves knowing where you are (“current state”) and being aware of what is happening in your environment (internal and external perspective), in order to better understand how information, events, and one’s own actions will impact both immediate and future outcomes.

With this solid planning foundation, leaders are ready to consider strategic options that will enable the organization to bridge the gap between the current state and the desired future state while factoring in the operating environment as revealed by the Situational analysis. This is where strategy comes into play:

  • Strategy – defining the approach that will guide individuals and teams on “how” to achieve the short-term objectives that move the organization from its starting point towards achieving its long-term goals. Strategy plays a vital role in VUCA strategic planning. It is quite literally the vehicle that will help the organization bridge the “gap” between where it is today (its current state) and where it wants to be in the future (desired future state).

Formulating strategy is not easy. Unfortunately, for leaders it only signals the beginning of the next phase of the VUCA Strategic Planning process – making a strategy decision:

  • Strategy Decision – once a strategy has been formulated, leaders face a significant decision: Is it the right strategy to help the organization achieve its long-term goals? If the decision is to move ahead with executing a chosen strategy then it is time to commit, and proceed with creating a complete Strategic Plan designed to ensure the successful execution of it.

Basic 5-step Decision Making Process

Making the strategy selection decision can be simplified by following a proven 5-step process:

  1. Identify the decision: The first step in making the best decision for the organization is to recognize the problem or opportunity, and decide to address it. At this stage in the VUCA Strategic Planning process, that should be straightforward to answer! Clearly, the objective is to pick a strategy.
  2. Gather information: Next, you want to gather the information you need in order to make a decision based on facts and data. If you’ve been following the VUCA Strategic Planning framework so far, this should also be in your hands at this point. You and your team will have gained solid Situational Awareness of the salient factors present in your operating environment. The Core Ideology and Envisioned Future of the organization should provide the context you need to make a decision.
  3. Identify alternatives: As part of the strategy formulation process, your team likely identified several potentially viable alternative strategies with one emerging as the preferred approach. By identifying these potential alternatives, you are ready for the next step.
  4. Weigh the evidence:In this step, you need to evaluate the feasibility, acceptability, and desirability of each alternative option. There are many sophisticated techniques to do this, but the simplest is just to consider the pros and cons of each option. Which leads us to the final step.
  5. Choose among alternatives:In this final step, you want to choose the strategy option that has the highest probability of success. When it is time to make your decision, be sure that you understand the risks involved with your chosen strategy. Sometimes a new strategy will emerge at this stage, formed by combining elements of alternative strategies.

Criteria for Evaluating Your Strategy Decision

Once you have selected your strategy, it is a good idea to do a quick evaluation before proceeding. Here are some key elements to consider:

  1. Core Ideology: The chosen strategy does not contradict the Mission and Values of the organization, and supports or enables your Purpose.
  2. Situational Awareness: You have clarity on the starting position (current state), and have considered all of the environmental (internal and external) factors that could influence the successful execution of the chosen strategy.
  3. Envisioned Future: You (and your team) still believe in the long-term goal (future state) for the organization, and that it can be achieved, or enabled by, the successful execution of the strategy.
  4. Diagnosis: The diagnosis of the challenge is reasonable, and you can defend it. This is the logical and fact-based explanation for the reason(s) behind the challenge that the organization is facing.
  5. Hypothesis: A clear and simple hypothesis on the solution to the challenge, one that the strategy could reasonably be expected to solve.
  6. Bias: A cognitive bias is a type of error in thinking that can affect our decision-making and judgement. There are many to consider, but you obviously want to avoid them when choosing your preferred strategy.

These elements provide helpful criteria for leaders to use when evaluating any considered strategy.

If, and only if, these conditions are satisfied, then you are in a good position to make the final decision and proceed with developing a VUCA Plan.

Next Steps

Once a leader has made the strategic decision on strategy, it is time to make the decision tangible by developing a plan that details the execution of the strategy leading to the achievement of your defined objective(s).

Upcoming articles will cover the details of creating a VUCA Strategic Plan, the importance of scenario analysis in strategic planning, and the value of taking a portfolio approach to managing your strategic initiatives.

-Onward

What is Your Strategy

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“Strategy can be defined as the determination of the long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.” – Alfred D Chandler, Jr.

Introduction

Formulating the strategy that an organization or team will use to achieve its envisioned future is a key component of the VUCA Strategic Planning process.

The word “strategy” has as many different meanings and interpretations as there are leaders of organizations who want to have a strategic plan. This is unfortunate because this lack of clarity and confusion often leads to disappointment and has given strategic planning an undeserved bad reputation.

The rest of this article will present a simple definition of strategy and how it fits into the VUCA strategic planning process.

Strategy Defined

In the realm of VUCA Strategic Planning, “strategy” has a central and extremely important role to play. To ensure the highest probability of success, the leaders of an organization must choose and articulate a clear strategy to follow. It will define the approach, or the “how”, that individual contributors and teams use to do their work and achieve their short-term objectives. The complete VUCA Strategic Plan is then built around the execution of the chosen strategy. Ultimately, successful execution of the strategy will propel the organization towards achieving its long-term goals.

This leads us to a simple VUCA Strategy definition: The approach that will guide the team on “how” to achieve the short-term objectives that move the organization from its current state towards achieving its long-term goals.

Where Does Strategy Fit Into VUCA Strategic Planning?

Strategy plays a vital role in VUCA Strategic Planning. It is quite literally the vehicle that will help the organization bridge the “gap” between where it is today (its current state, or sometimes referred to “as-is”) and it wants to be in the future (desired future state).

The Core Ideology of the organization is the planning filter than any strategy should be evaluated against, and the Envisioned Future is the baseline definition for the desired future state. When combined with robust Situational Awareness, which details the current state of the organization and its operating environment, your Core Ideology and Envisioned Future create the springboard for strategy development. Previous articles have described these three planning elements in greater detail:

  • Core Ideology – defining the mission, values, and purpose of the organization. These elements describe why the organization exists and what it stands for. They form the “true North” guideposts for making strategic decisions and are the foundation for any VUCA Plan. With this solid planning foundation, you will have a clear understanding of what your organization stands for and its unique strengths. This understanding provides greater clarity and a useful strategy filter for making critical business decisions that affect the future of your organization.
  • Envisioned Future – defining a clear vision for what the organization aspires to become or achieve, and your long-term goals. These elements explain the desired “future state” of the organization, and the long-term goals you and your team are working towards achieving in order to get there.
  • Situational Awareness – a thorough analysis of the environment in which the organization operates. Situational awareness involves knowing where you are (“current state”) and being aware of what is happening in your environment, in order to better understand how information, events, and one’s own actions will impact both immediate and future outcomes. This typically includes an analysis of internal and external factors with a focus on the organization, its market(s), and its customers.

In the definition of Situational Awareness above, the environment refers to everything that is going on around the individual, team, or organization. The reason we focus on important elements of the environment is to emphasize that situational awareness is ultimately about enabling an individual, team, or organization to get something done. This can be a task, a project, an initiative, or anything else that requires interaction with, and reaction to, relevant elements of the environment.

With this solid planning foundation, leaders are then ready to consider strategic options that will enable the organization to bridge the gap between the current state and the desired future state while factoring in the operating environment as revealed by the Situational analysis. This is where strategy comes into play.

  • Strategy – defining the approach that will guide individuals and teams on “how” to achieve the short-term objectives that move the organization from its starting point towards achieving its long-term goals.

As you can see, in its simplest form, a strategy should bridge the gap between “current state” and “future state” for the organization.

The Value of Strategy Frameworks

Formulating a strategy for the organization to achieve its long-term goals is a complex endeavor because it is highly situational – every organization is unique, more often than not operating in an uncertain VUCA (volatile, uncertain, complex, ambiguous) environment, and their situation is unique. The need for VUCA Strategic Planning has never been greater.

Many leaders find strategy formulation to be extremely challenging, yet intellectually stimulating at the same time. In many respects, defining strategy for the organization is the very essence of leadership!

Strategy formulation is not easy. Depending on the current state of the organization, the envisioned future, a comprehensive situational analysis, and the size/complexity of the “strategy gap” there can be any number of potential strategies and variations to consider.

Given the complexity of operating environments, marketplaces, and competitive forces, this is one of the most challenging tasks for modern business leaders. Fortunately, there are a number of established frameworks that can help us to identify the best strategy for the organization to reach its identified long-term goals.

Perhaps the simplest strategy framework is the basic “gap analysis” – a strategy designed around answering the question: “How will we get from here to where we want to be?”

There are a number of other strategy frameworks, some of these (like SWOT and PESTEL) are quite useful during the Situational Awareness phase of strategic planning. Each of these incorporate different approaches to evaluating the challenge and formulating the resulting strategy. A few of the more well-known strategy frameworks include:

  • SWOT
  • PESTEL
  • Porter’s Competitive Forces
  • McKinsey 7-S Framework
  • Pareto Analysis
  • Constraints Analysis
  • VRIO Analysis
  • BCG Matrix
  • Ansoff Growth Matrix

Future articles will explore each of these, and their application, in greater detail.

The Basic Elements of a Good Strategy

No matter what strategy framework you decide to use (if any!) there are five common elements to any good strategy:

  1. Situational Awareness: You must have clarity on the starting position (current state), and consideration of the environmental factors that could influence your success.
  2. Envisioned Future: A realistic long-term goal (future state) that can be achieved, or enabled by, the successful execution of the strategy.
  3. Diagnosis: A reasonable diagnosis of the challenge. This is the logical, and fact-based, explanation for the reason(s) behind the challenge the organization is facing.
  4. Hypothesis: A simple hypothesis on the solution to the challenge, one that the strategy could reasonably be expected to solve.
  5. Action Plan: A logical and feasible action plan, spelling out the high-level actions the organization is capable of taking that would lead to overcoming the challenge or achieving the objective.

These elements provide helpful criteria for leaders to use when evaluating any considered strategy.

Next Steps

Formulating strategy is not easy. And unfortunately, it only signals the beginning of the next phase of VUCA Strategic Planning because once a leader formulates a strategy they must make the all-important “go or no-go” decision. If the decision is to move ahead with a chosen strategy then it is time to build a complete strategic plan around it.

-Onward

Crafting SMARTER Objectives

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“Objectives are not fate; they are direction. They are not commands; they are commitments. They do not determine the future; they are the means to mobilize the resources and energies of the business for the making of the future.” – Peter F. Drucker

One of the most common challenges organizations experience when they are creating a VUCA strategic plan is around setting objectives. Simply put, most organizations (and their leaders) are just not very good at it doing this critical element.

Fortunately, there is an easy prescriptive solution that will help: the SMARTER framework for setting objectives.

Setting the Stage for VUCA Strategic Planning

Before talking about objectives, let’s review the two foundational elements required for effective VUCA strategic planning to take place:

  • Core Ideology – defining the mission, values, and purpose of the organization. These elements describe why the organization exists and what it stands for. They form the “true North” guideposts for making strategic decisions and are the foundation for any VUCA plan. With this foundational framework you will have greater clarity when making critical business decisions that impact the future of your organization.
  • Envisioned Future – defining a clear vision for what the organization aspires to become or achieve, and your long-term goals. These elements explain the desired future state of the organization, and the long-term goals you and your team are working towards achieving in order to get there.

With this foundation in place, leaders are then ready to consider strategic options. One of the key components of a VUCA strategic plan is to create short-term objectives which contribute and drive towards the attainment of the long-term goals articulated in the strategic plan.

Definition of Objectives

In strategic planning, all the elements need to fit together, and build from one to the next. In other words, your mission, values, and purpose should inspire your vision statement, which should inform your goals, which should then inform your objectives. Short-term objectives contribute to the attainment of long-term goals and fulfillment of the organization’s vision. Here’s how they fit together:

  • Vision – Your vision is an aspirational statement that is not time-bounded. In fact, your vision may never actually be attained, but rather serves as an imagined picture of the future.
  • Goals – Your goals are broader and longer-term, typically 2-5 years in timeframe. A goal is a broad and long-term desired result you want to achieve. You might use company goals to inform yearly strategies and guide the direction of all your efforts. Your strategic VUCA plan will undoubtedly have several goals.
  • Objectives – Your objectives are the short-term, tactical action items to be accomplished within the next 12-24 months max. Each of your goals will likely have multiple objectives behind them, and they become a key component of the organization’s VUCA plan. An objective defines the specific, measurable actions individual employees or teams must take to achieve an overall goal.

Note: Objectives are critically important to successful VUCA planning because it is at the objective level that the ownership of the strategic plan shifts from organizational leaders to teams and individuals.

Objectives are where the actual work gets done!

Ultimately, the objectives you assign to your teams and individuals will help them to understand exactly what you expect from them. This is where their actions influence and contribute towards the achievement of the organization’s goals.

Common Challenges for Completing Objectives

Most challenges that organizations experience around the completion of the objectives in their VUCA strategic plan can be attributed to one of three areas:

  1. Poor design. This is when objectives are poorly defined, unclear, vague, and with no metrics. This makes it difficult to manage, or monitor progress.
  2. Lack of internal buy in or support. When there is no support or agreement on the objectives, then they generally do not get done. There are many causes, including a lack of training, poor leadership, and not having the right team. This will be the subject of future articles.
  3. External impacts. As we have seen in the past few months of the pandemic, VUCA (volatility, uncertainty, complexity, ambiguity) environments have a way of derailing even the most well intended plans. It is here to stay, and something we need to account for in our planning.

This article will focus on the first, and most common, challenge – poorly designed objectives.

The Value of Clear Objectives for VUCA Planning

Clear objectives help leaders to define the target, and help teams to define the right path and determine when they have successfully achieved it.

Sometimes you will hear the expression “mission clarity” – this term is often used in reference to knowing the objectives of a “mission” or initiative or project. It is not referring to the actual mission statement of the organization. In the context of VUCA strategic planning, it means that leaders must makes sure that the assigned team or individuals have complete clarity around the objectives they have been tasked with achieving. Without this clarity, you can’t expect success.

In a VUCA environment, where unpredictable and disruptive events can happen very quickly, we need to embrace an agile approach to making decisions. In order to maintain this flexibility, it is imperative that we always “keep our eye on the prize” so to speak, knowing the ultimate objective(s) we are trying to achieve, while being flexible in the approach on how to achieve them, is the solution.

Having clarity around objectives enables business unit leaders and their teams to think creatively about how best to achieve results while considering all the inputs and realities of the situation, including making real-time pivots in the field.

Without this clarity of the end goal or objective to be achieved, no amount of strategic VUCA planning will be effective.

Clarity comes from good design. And well-designed objectives come from the SMARTER framework.

Creating SMARTER Objectives

The SMARTER framework is a proven tool I’ve used for many years to help leaders define specific objectives. It is an acronym that spells out guidelines and criteria enabling you to craft impactful and useful objectives that are: Specific, Measurable, Attainable, Relevant, Time-bound, Evaluated, and Recognized when achieved or Revisited when not:

  • Specific – An objective must be clearly defined, without any ambiguity, and as specific as possible. It is almost impossible to be too specific! It cannot be subject to any individual interpretation, and should explain exactly what is to be achieved or the outcome expected. Without this level of specificity, there is no real target, just a vague direction that often leads to failure.
  • Measurable – You need to clearly describe the criteria for successful completion of the objective, along with any related quantitative or qualitative metrics that you’ll be evaluating. This becomes the evidence that is crucial for determining if an objective is attained, and for your team to be able to provide the proof to confirm it.
  • Attainable – This criterion emphasizes the importance of setting an objective that may be challenging for your team but is nonetheless achievable. Here is where you must “get real” and carefully consider if the objective is even possible with everything you know of the environment and any existing obstacles. An important component of this for leaders is to make sure the assigned individual or team has the bandwidth, resources, training, and authority required to accomplish the objective. (Note: It is okay to set stretch objectives that may flirt with being unattainable, but if they are completely unrealistic then you will lose credibility as a leader and risk demoralizing or alienating your team.)
  • Relevant – Each objective must connect back to your organization’s Core Ideology (mission, values, and purpose) and Envisioned Future (vision and long-term goals). This linkage is vitally important because it provides the all-important “why” for the assigned team or individual to understand the importance of achieving the objective. Provided you have the right people, and have done an effective job as a leader in sharing the organizations strategic VUCA plan, then people will do whatever it takes to get there if they understand the objective and believe it is relevant. If there is misalignment, you will likely fail to reach the desired objective.
  • Time-bound – A defined deadline is an important management tool. Each objective should at the very least have a specified time-frame to get done, including a specific start- and end-date. For longer-term, or more complicated objectives, it may also make sense to include any interim or critical milestones required to accomplish it. This level of detail will help prioritize activities, and is important for your team to organize their tasks and make more detailed action plans.
  • Evaluated – Leaders have the responsibility to set challenging goals for their team but also to support them in reaching their targets by assessing the progress on a regular basis. This programmed check-in enables leaders to provide real-time input, recommendations, or coaching to overcome any obstacles. By defining specific checkpoints (typically via at a predefined frequency or critical milestones) and the related expected deliverables at that point, you have a way to measure progress and ensure successful completion. It also helps the objective owner(s) by providing them with markers to check their progress. Obviously, you do not want to wait for the objective to reach its time-limit to do deliver feedback…at that point it is too late to affect change. By following this guideline, the final evaluation of the objective will never come as a surprise to your team because the intermediate reviews have provided an opportunity for course-correction or remediation actions.
  • Recognized or Revisited – The last SMARTER criterion has two dimensions depending on the outcome! When objectives are successfully completed, they should be Recognized. When objectives are not achieved, or stall out, they should be Revisited.
  • Recognized – The successful completion of an objective has an obvious people management component: public or private praise, incentives, rewards, promotions, etc. To the extent possible these should be specified when crafting the objective. It should also include a post-mortem process to evaluate what worked well and what didn’t. This introspection will review the initiative and capture all the lessons learned so that the organization can benefit from the process and apply those lessons to future objectives.
  • Revisited – Taking another look at the objective is something we must do when the initiative is stalling out, goes sideways, appears to be failing, or has already failed. This is an opportunity to make the classic start-up “pivot” and change the approach, or change the target. When setting the objective it is important to define the indicators that would necessitate a revisit. You can also specify any known options, in priority order, as an aid to decision making.

Conclusion

Clear objective setting is of critical importance to strategic VUCA planning because it is at this level that ownership of the plan shifts from the leaders of the organization to those teams or individuals doing the actual work and responsible for successfully achieving the objective.

I hope you can see that by using the SMARTER framework to create objectives, you ensure objectives are well designed, easy to measure and manage, and ultimately get done.

-Onward

Great Strategy Requires Situational Awareness

by

“The difference between being a victim and a survivor is often a low level of situational awareness.” – Barry Eisler

With the amount of change and disruption in the world and in our current business climate, it has never been more important for leaders to be aware of their surroundings, and thoroughly understand the internal and external forces that can have an impact on their organization.

Effective strategic planning requires an honest appraisal of your starting point and operating environment. This is called “situational awareness,” and it is vital to have it before creating a VUCA strategic plan. A thorough and honest assessment of your current reality will not only help inform your strategy, but it will also help to identify potential pitfalls and alternative scenarios to consider and prepare for.

The Foundation for VUCA Strategic Planning

Before geting into the details of situational awareness, here’s a quick review of the two foundational elements that should be in place for effective VUCA strategic planning to take place:

  • Core Ideology – defining the mission, values, and purpose of the organization. These elements describe why the organization exists and what it stands for. They create a “true North” guidepost for making strategic decisions and are the foundation for any VUCA plan. With this foundational framework you will have greater clarity when making critical business decisions that impact the future of your organization.
  • Envisioned Future – defining a clear vision for what the organization aspires to become or achieve, and your long-term goals. Together, these elements explain the desired future state of the organization, and the long-term goals you and your team are working towards achieving in order to get there.

With this solid planning foundation, leaders are ready to begin thinking about their strategic options. This requires the identification and understanding of their current environment, and the ability to project that into the future.

First, Put It All on the Table

To craft an effective VUCA plan, we have to know exactly where the starting position is. You need to know your current reality. Because if you don’t know where you are, then how will you know when you get there?!

Much like sailing a ship, in order to plot a course forward we have to know where we are, where we are going, but also what the environment around us looks like.

Warning: This stage of the strategic planning process is difficult for many organizations. Not because it is inherently “hard” to do, but rather because it requires honesty and deep inquiry, something that many leaders (and their leadership teams) are just not willing or able to do.

Why do they resist? Oftentimes it is because the truth hurts. Or, because challenging sacrosanct beliefs is difficult, and may bring into question prior executive decisions. Or, because they just may not know how to go about gaining market clarity.

Please pardon the expression, but for this reason I often refer to this stage of the strategic planning process as finding and putting all the crap on the table.

It is not easy. Nor is it always fun. However, it is very necessary…and by giving it “heat and light” you can drive productive outcomes.

Gaining situational awareness helps to inform strategy, clarify your direction, and leads naturally to developing a plan.

What is Situational Awareness?

The phrase “situational awareness” comes from military aviation and is defined as “the perception of environmental elements and events with respect to time and space, the comprehension of their meaning, and the projection of their future status.” The ability to gain situational awareness quickly is essential for combat pilots if they are to survive an encounter with enemy aircraft.

Here is a strategic planning definition: Situational awareness involves knowing where you are and being aware of what is happening in your environment, in order to better understand how information, events, and one’s own actions will impact both immediate and future outcomes.

Put another way, situational awareness is the ability to identify, process, and comprehend the critical elements of information about what is occurring or is about to occur. Every leader has the responsibility to know what is happening within their organization and the world it operates in.

While gaining situational awareness sounds fairly easy in a stable and simple situation, it becomes significantly more challenging in a rapidly changing and disruptive environment because it is not a static snapshot, but rather a real-time capture of a dynamic environment. This makes situational awareness especially relevant for situations or environments characterized by a high level of volatility, uncertainty, complexity and ambiguity (VUCA).

That sure sounds like today’s business environment!

The Three Levels of Situational Awareness

In strategic planning, there are three levels of situational awareness to consider. They build on one another sequentially, and there are important elements of VUCA planning that take place in each so we need to consider them all:

  • Level 1 – Perceiving
  • Level 2 – Understanding
  • Level 3 – Predicting

Following is a quick overview of each:

Level 1 – Perceiving: Perceptions of data and the elements in the environment

The first step in gaining situational awareness is to be able to identify the state, characteristics and dynamics of all the relevant elements in your current operating environment. This is sometimes called the “as is” view.

There are two important implications. First, the individual or organization must have access to the relevant information. Second, once this access is in place, the individual or organization has to recognize it. Consequently, one of the key requirements for Level 1 situational awareness is the communication and proper visualization of data.

Gaining situational awareness for organizations often involves internal analysis of the company and an external analysis of the marketplace or economy. There are many proven analytical tools and techniques to accomplish this, such as SWOTER and PESTLE analyses, which will be covered in future articles.

However, it is not enough to be able to perceive all the factors in certain situations. One needs to learn to make sense of the connections between these elements, hence the second level of situation awareness: understanding.

Level 2 – Understanding: Comprehension of the meaning and significance of the current situation

Understanding goes beyond simple awareness of the elements that are presented. The second level of situational awareness refers to the requirement that we must properly comprehend the relevant information. Comprehension of the current situation is based on thorough analyses of all Level 1 elements. As a decision maker, one not only needs to draw a holistic picture of the situation with sufficient knowledge first level elements — but also have the ability to understand the significance of those elements in relation to each other, and to the achievement of the goal.

Depending on the specific situation, Level 2 understanding requires the right knowledge to deal with the acquired information. This is where mental models and strategic frameworks can play an important role. By taking the Level 1 information and interpreting it through a new or existing mental model, or strategic framework, we can be begin to stress-test possible approaches based on what we know.

This works because when we create a new model or update an existing one based on how we’ve interpreted the information, if something important is missing, the information is incorrect, or the information doesn’t make sense, the model fails to work. It either means we don’t have all the information we need, or the approach is not the right one.

For business planning there are many well-known strategic frameworks that can be considered depending on the situation, including internal/external considerations, vision, long-term goals, VUCA environmental factors, etc.

After this analysis, and initial consideration/formulation of strategic frameworks, we will then come to our next level of situation awareness: the ability to predict the future status based on our understanding of the current situation.

Level 3 – Predicting: Projection of future status and events

You achieve the third level of situational awareness by applying the information and insights perceived and comprehended in the first two levels. This knowledge is then used to project forward and begin to predict potential future actions or outcomes of the elements in the environment.

This level is especially important in dynamic VUCA environments, because the ultimate goal of building situational awareness is to utilize the information collected to predict the most likely potential outcomes as a result of these elements, and to then use this information for decision making.

For strategic planning we do can accomplish this through the development and consideration of scenarios. This “what if” level of planning is crucial for dynamic VUCA environments because it allows leaders and their teams to consider a range of possibilities and then think through how they will react ahead of time. This has obvious decision making and execution benefits. Much more on this in future articles.

It becomes even more important in complex systems or environments, which are characterized by many interdependencies, because it is much more difficult to predict how changes in one variable might influence those around it and the whole. As a result, we must constantly re-evaluate and adjust our mental models or strategic frameworks as we gain new information.

Situational Awareness Connects the Person (and Team) to the Environment

A key foundational concept behind situational awareness is the distinction between an individual (or a team, or an organization) and the environment they operate in. The environment refers to everything that is going on around the individual, team, or organization. The reason we focus on important elements of the environment is to emphasize that situational awareness is ultimately about enabling an individual, team, or organization to get something done. This can be a task, a project, an initiative, or anything else that requires interaction with, and reaction to, relevant elements of the environment.

Ultimately, no strategic plan ever survives contact with the market without some change.

But the true value is not in having an ironclad plan that doesn’t change, but rather in having thought through potential challenges to achieving the long-term goals of the organization, so that individuals, teams, and the organization can react quickly and decisively. This leads to the final stage of strategic planning, where a decision is made and the plan is broken down and delegated to those responsible for achieving it.

In the end, strategic planning is completely useless unless some action is taken by an individual or team.

Conclusion

There are three levels of situational awareness:

  • Level 1 – Perception of data and the elements of the current environment, ideally taking an internal and external perspective on the starting point.
  • Level 2 – Comprehension of the meaning and significance of the current situation, including some consideration/formulation of a strategy framework or mental model.
  • Level 3 – Projection of future status and events, including some prediction of potential scenarios and consideration of their likelihood and potential response.

Situational awareness is the starting point for strategic planning – Simply, it is knowing where you are, what is going on around you, and how you might react to any impacts that might prevent you from achieving your objective.

For business success you need internal perspective on your organization’s strengths and weaknesses, and external perspective on your market position and strength, how customers view you, competitive landscape, etc. It is far too common to see leadership teams developing comprehensive strategic plans without looking at what is happening outside of their organization. Furthermore, many organizations never consider potential threats or destabilizing forces, or their potential response to them.

Investing in gaining situational awareness is the solution.

Hopefully you can see that these situational awareness steps — perceiving the elements in the environment to know your starting point, understanding how the environment might impact your goal, and being able to use this information to predict future events and possible strategic responses — can help you, your team, and your organization achieve success.

Stay tuned; in an upcoming article I will discuss the value of setting “SMARTER objectives” when creating a VUCA strategic plan. This is a key ingredient to getting results.

-Onward