A Behind the Curtain Look into Stratasan’s Planning Process
By Jason Moore
As we near the end of 2018, goal setting and annual planning are top of mind for all of us. Strategic planning is a useful process for organizations of all shapes and sizes and a well-defined strategic plan is key for companies that want to thrive, grow, and remain competitive. In this post, I want to give you a peek behind the curtain into our process to help you better understand how we think about and plan for the future of our business.
Stratasan’s co-founder and CTO, Brian Dailey, introduced Good Strategy/Bad Strategy: The Difference and Why it Matters by Richard Rumelt to our executive leadership team (ELT)* in late 2017. After reading and discussing it as a group, we decided to implement this methodology to our strategic planning process. Starting this process so late in the year though meant our 2018 strategy was not completed until the year had already begun. This limited how effective our 2018 planning could be, but we still recognized that we’d landed on a good process. This year, we were motivated to start earlier and are already seeing positive synergy around our 2019 strategies as a result.
*Our ELT consists of seven individuals who run the various departments throughout the company.
What’s the difference between good and bad strategy?
As described by the book, good strategy is not about vision or goals. It is about a carefully researched and well-designed action plan designed to meet a challenge. The problem is that many leaders often substitute targets, exhortations, and slogans for strategy. Bad strategy—defined as a form of magical thinking—contains fluff, dodges problems, mistakes goals for strategy, and sets unrealistic goals.
Identifies and leverages your competitive advantages
Requires research and analysis, hard choices, decisive planning, and action
Focuses on critical issues and decides how to address them
This quote from the book further describes good strategy: “A good strategy has an essential logical structure that I call the kernel. The kernel of a strategy contains three elements: a diagnosis, a guiding policy, and coherent action. The guiding policy (GP) specifies the approach to dealing with the obstacles called out in the diagnosis. It is like a signpost, marking the direction forward but not defining the details of the trip. Coherent actions are feasible coordinated policies, resource commitments, and actions designed to carry out the guiding policy.” - Richard Rumelt
Taking cues from the book, our ELT set out to define our diagnosis, which lays out our challenges and most promising opportunities. We then created GPs that outlined our approach to addressing these opportunities and listed coherent actions for how to carry out our GPs.
As with any new process, we
identified several missteps learned many lessons as we started to implement this methodology. See below for some of our key takeaways.
The process is more effective when started earlier. This one is obvious but no less true. As mentioned before, our first attempt at executing upon this methodology didn’t fully work as we started the process too late in the year. It has been encouraging to see how starting earlier this year has spurred many conversations around new ideas and goals, months before the next year begins. We have experienced better results by determining our diagnosis and GPs in August or September and having the entire exercise complete by mid-October for the following year’s strategy.
Our founders and top leaders draft the first version of the diagnosis. Once the diagnosis draft is ready, our ELT reviews and edits it as needed. This order is important because our key leaders are most intimately familiar with the state of our business, our market, and key opportunities in our market—they are well positioned to accurately set the stage for this discussion.
Our ELT drafts the first version of our guiding policies. Once the diagnosis has been finalized, our ELT drafts GPs for the coming year. At this point, the list of GPs is longer than we would like, but they will likely be edited, combined, and deleted in the next step, when our management team reviews the GPs and adds their feedback. This broader team is a group of strategic thinkers who represent all facets of our business. By getting this group to agree upon the GPs, we ensure that there is buy-in across the company and that the needs and opinions of all teams and departments are being considered.
Finally, our management team drafts the first version of our coherent actions. This jumpstarts the process and gives the full team a starting point on coherent actions.
Communicating the guiding policies to the entire team is critical. Not surprisingly, an important step in the process is to make our entire organization aware of our progress as soon as possible. Making our team aware of our GPs before the coherent actions are set in stone leaves room for company-wide input and alignment. Ideally, this is done at a time where every team can hear from every department about how the diagnosis and GPs look to affect their focus for the next year. Our annual Town Hall, which is a time set aside for reflection and preparation for the new year, is held each October. It has become a great time for this kind of communication.
Once everyone is on the same page about our diagnosis and GPs, we then get full team input into our coherent actions. The idea here, again, is that the more we allow our entire organization to be involved, the more likely we will have buy-in from the team to execute upon the coherent actions and carry out the GPs.
Coherent actions are considered to be a living set of directives that will guide ongoing meetings. Updates, edits, and additions to our coherent actions will be pushed up from department meetings and this document will now guide the discussion in our monthly team meetings.
Guiding policies and coherent actions serve as our company list of to-dos, used for continuity and alignment. As a new experiment for our team this year, we will use this planning framework to encourage decision making communication across teams. Our goal is to create multi-directional discussions where our ELT guides conversations with our management team which trails down into departmental and one-on-one meetings. The departmental and one-on-one meetings can then inform up the ladder how our company is tracking with coherent actions and how aligned our actions are with this year’s GPs.
Following the methodology outlined above, by Q4 of 2019, our team should be focused on closing out the year in strong fashion based on our first three-quarters of execution. Simultaneously, we’ll be turning our focus on preparation for the next year of growth. This is the ideal progression for an organization looking for a systematic, measurable way to grow.
To be effective, strategic planning requires year-round activity and reliable systems for measuring progress to ensure your hard work is paying off and goals are being achieved! Our exact process will not work for every organization though, and our partner hospitals, in particular, will likely follow an entirely different model for their strategic growth plans. The key is to land on a process that suits the organization’s culture and mission—one that incorporates input from every team and is well communicated throughout the company for maximum adoption.
For more information about how our team can assist with everything from facilitating a hospital’s one-off strategy session to conducting a full strategic planning process, contact us and schedule a discovery call today.
Article by Jason Moore, Founder and CEO of Stratasan