How it all fits together.

How it usually starts

Almost no company starts in a strategy. It starts in a capability, meaning that someone can do something and reckons they can see that it could be done better than the way it’s being done today. That observation is what makes somebody dare.

Out of it grows a mission, meaning why we’re really doing this. It’s rarely formulated in a meeting, it sits in how the founder talks about the work long before anyone writes it down.

At roughly the same time a long-term goal begins to take shape, often unspoken for years. That’s the vision, meaning where we’re going to be at some point, and it’s usually bigger than anyone says out loud early on.

The distance between where you are and the vision

Then comes the uncomfortable part. We’re standing here, in our current position, and the vision is a long way off. The question becomes how we get all the way there, and that question can’t be answered in one step.

So strategic goals are set roughly halfway. They’re interim goals, close enough to be worked towards and big enough to mean something, and they’re the only thing in the picture that ties the daily business to the vision.

Only after that do the strategies take shape, meaning the choices of route for how the goals are to be reached. The order matters: strategies written before the goals exist turn into activities that sound good.

The values arrive with growth

As the company grows, a question comes up that didn’t exist when there were three of you. Why do we in particular want to do this together.

The answer is the values, meaning the smallest common denominator that holds the group together and turns a collection of people into a force pulling the same way. They aren’t invented at a workshop, they’re found, and they’re already there in how you behave when things get hard.

Everyday work is where it’s decided

Underneath all of this lies everyday work, and it consists of capabilities, processes, policies, activities and routines in large numbers. That’s where the work actually gets done.

None of those parts is finished. Each one either needs improving or needs creating, and it’s the sum of those improvements that is the movement from where you are towards the strategic goals. So the picture has no shortcut in the middle. There’s only one arrow, and it’s built out of small things.

The forces work in pairs

This is the real point of the picture, and it’s the part few people see.

Vision and capabilities give you the strategies. If you know where you’re going and what you’re genuinely good at, formulating the choices of route becomes strikingly easy. If either of those two is unclear the strategy work becomes an ordeal, and that’s nearly always why a strategy day feels like talking in circles.

The mission gives you the values. If it’s clear why the company exists, it follows by itself which behaviours belong here. Values produced without a mission turn into words anybody could have picked, and they don’t survive the first time they cost something.

All four forces press towards the same point, meaning towards the strategic goals. The capabilities from one side, the mission from the other, the values from above and the strategies from below. If they hold together they pull the same way and the improvements gain force. If they pull apart they cancel each other out, and then it makes no difference how many initiatives you launch.

A company that was built in that order

A technology company was started by a handful of people who had got to know each other through a shared interest alongside their studies, and who along the way discovered they were really sharp at the same things. There was no strategy, only a capability and a feeling that this could be done better than the way it’s being done today. The plans were ambitious from the start.

The company drew in like-minded people, and before long there was an internal expression for being one of them. Everyone knew what it meant, and nobody could quite explain it. That’s values before anybody has written them down, and that sort of culture is strong precisely because it wasn’t invented at a meeting.

Then came the challenges, and with them a number of strategic decisions that hurt. Leaving several platforms and betting everything on one. Deciding exactly what would be delivered and in what forms. So the choices of route were there, and they were the right ones.

Even so, growth stalled at thirty-odd employees, and nobody could explain why. The pieces existed separately, meaning the capability, the mission, the unspoken culture and the strategies, but they had never been set against each other and couldn’t be followed down into everyday work.

The work that followed is what’s described in parts one and two. The strategies were clarified, the processes were pared back, the structural capital was put in place and the critical success factors were defined. After that it was simply made easy to do the right thing, meaning to make the right decisions, to let the right person do the right task and to invest in the right customers. The company grew to just over double, with healthy profitability.

So what came unstuck wasn’t the ambition and it wasn’t the competence. Both were there in abundance the whole time. What was missing was that the forces had never been set against each other, and that none of them could be followed all the way down to a Tuesday.

Identify, prioritise, implement

The improvements are the engine, and they need three things in this order.

Identify. Which improvements are actually required to reach the goals. The list here will always end up longer than you think.

Prioritise. Which of them make the most difference relative to what they cost. This step is the one most often skipped, and that’s why the list never gets shorter.

Implement. Actually getting them done, which is an art all of its own and the most common place for things to founder.

Something to try

Draw the picture for your company and fill it in honestly, meaning with what’s true and not with what ought to be true.

Then ask three things. Can three people from different parts of the house write down the same vision. Can every ongoing initiative be connected to a strategic goal. And do you recognise your values in how you actually behaved the last time it got really tough.

If the answer to any of them is no, you’ve found which force isn’t pulling, and that’s the one to address before the next initiative is started.

In practice

In Genomlysningen, our review of the business, this is often the first picture we draw, since it shows where we need to look more closely. What usually turns up is not that something is missing altogether, but that the pieces exist separately and have never been set against each other.

The picture also connects to the rest of the library. The core of a strategy is about the choices of route at the bottom, and Critical success factors is about what should be preserved and what should be changed along the way. This picture is the room the others stand in.

And back to the beginning

The series began in everyday work, with the returns and the late payments, and ends in this picture. It’s no accident that it runs in that order.

The picture isn’t worth anything in itself. It becomes worth something only when every part of it can be followed downwards through process and structural capital, all the way to something a human being does on a Tuesday. If it can’t be followed that far it’s a fine document, and fine documents are exactly what most companies are already full of.

So turn it around when you’ve finished filling it in. Point at a strategic goal, follow it down through the three levels, and see whether it lands in something that really is easy to do right.