By Mike Loughrin, CEO for Transformance Advisors
This is the seventh article in our series on strategy execution.
Click here to start at the beginning.
For many organizations, there are six milestones for launching strategic initiatives.
In this article, we will look at the sixth milestone.
Launch Strategic Initiatives
Following the planning retreat, the executive sponsor, for each strategic initiative, needs to pull together a team and create a business case for moving ahead. This business case will be critical in terms of documenting expectations and quantifying the expected benefits and costs.
Business Case Format
A solid format that can be used by small and medium sized organizations includes the following eight requirements.
- Current Situation: Describe the situation in terms of processes, performance gaps, business drivers, and the sense of urgency.
- Trends and Best Practices: Provide performance bench marking data concerning competitors and best in class concepts from other industries.
- Statement of Need: Describe the gap between current state and future state. Address the risks associated with not closing the gap.
- Scope: Describe the project boundaries with included and excluded components.
- Benefits: Describe the benefits with a direct link to the vision, mission, values, and strategic position.
- Cost: Describe the costs of the project broken into specific phases with milestones. Identify one-time vs. ongoing costs.
- Justification: Provide the benefit and cost analysis consistent with standard company practice such as return on investment. If appropriate, clearly state that the benefits are greater than the costs and the strategic initiative is justified.
- Organize for Success: Define the roles and responsibilities and any assumptions about specific resources required. The best people are always busy.
Depending on organizational preference, the business case could be eight slides in a PowerPoint presentation or could be a written document with attachments.
Assuming the strategic initiative is justified, the executive sponsor can then proceed by pulling the project team together for a formal launch of the initiative. At this meeting, the team will review the business case, clarify roles and responsibilities, and brainstorm to collect a list of improvement projects that will be required.
Typically, a strategic initiative will have 5 to 15 separate projects that need to be coordinated, but have different resources assigned to them. For example, an initiative to improve new product development may have one project related to a CAD/CAM system, another project focused upon determining customer needs, and a third project that improves the collection of ideas from research and development conducted by suppliers.
- A business case has been completed for each strategic initiative. An “organize for success” section identifies the project team structure and members.
- Assuming there is justification to proceed, the core team for each initiative has completed a launch meeting where they have identified what projects will be undertaken to achieve the objectives spelled out in the business case.
We have explored the six milestones required for crafting strategic initiatives that are aligned with the vision of the organization. Following this approach will deliver better defined initiatives, will create greater buy-in with the leadership team, and will provide strong momentum as the organization moves to the strategy execution phase. In addition, the decisions made on what to stop doing will free up significant resources and help refocus everyone on the challenges to be addressed.
Three key take aways for all readers:
- There is a systematic approach for strategy development and execution.
- Strategic initiatives for driving operational excellence must be integrated with the overall organizational strategy.
- The leadership team is instrumental in development of the overall strategy and committing to the strategic initiatives.