Page 69 - HBR Leader's Handbook: Make an Impact, Inspire Your Organization, and Get to the Next Level

Developing a Strategy 59

also simply explain how achieving them will reflect progress toward its
vision. (Goals are usually further broken down into specific objectives and
intermediate outcomes for executional planning; see chapter 4.)

Step 3. Understand your current situation
Once you’ve set goals tied to your unit’s or your company’s larger vision and
strategy, turn your team toward understanding the status quo. Make an
honest appraisal of your team’s existing business—current performance,
assets, capabilities, basis for competition, and so on. Then do the same for
the world in which your unit and broader company operates, looking at
how that landscape is changing (e.g., shifting consumer tastes, new com-
petitors emerging, new technology restructuring business models, etc.)
and the threats and opportunities that come with those changes. This dual
assessment will provide the starting point for developing ideas and oppor-
tunities to improve or even transform where and how you compete and
deciding on a distinctive value proposition.
You can approach the appraisal of your existing team in many ways. It
may vary depending on how well the performance of your company is
already documented and understood, and the level of analytical rigor you
feel is now needed. A radically lean effort might begin with minimal
analysis or a starter sketch that is then iteratively tested and refined, but a
few fundamental questions must nonetheless be addressed, for example,
“Who are we today and how does that fit with the external world and new
challenges?”
Other frameworks can help with such questions. Consider, for exam-
ple, Peter Drucker’s theory of the business—the often tacit assumptions of
“policies, practices, and behaviors” about how (and how well) your com-
pany operates and how well those fit today’s competitive climate. Or you
may want to analyze your business model in more detail, which includes
your key value proposition to customers; how you make money (which is
important whether you are for-profit or nonprofit); and the processes and
resources you rely on to deliver value. The current situation appraisal
should also consider aspects of talent, financial and technology resources,
culture, brand, and similar assets to bring to your strategy for winning.