Since authoring the 2011 edition of ITIL® Service Strategy, many organizations have asked me to review their strategies. Through this work, I have learned two things: most strategies are ineffective, and the industry has moved on since 2011. In this series of articles, I’ll look at how to create and execute strategy effectively.
In this first article, I’ll look at five things that most organizations will need to change to make their strategies more effective.
David will have more to say on this subject at Service Management World.
Tactic 1: Keep Your Strategy Strategic (and readable!)
Many strategies consist of detailed descriptions of projects, activities, schedules and technical architectures. There are pages of diagrams of industry models and detailed feasibility studies, assessment findings, and recommendations.
None of these things are strategic, even if they support the strategy. They’re inputs into the strategy and detail how the strategy will be operationalized. Few people can read and understand all the documentation.
Instead, your strategy should specify where your organization is going and provide a summary of the initiatives that will enable it to get there. It will tell you who is responsible for each initiative, major milestones, how much is budgeted, and where you can find the detailed initiative plans and architectures.
Tactic 2: Design your Strategy to Be a Dashboard
If a strategy shows where the organization is going, and what initiatives it will take to get there, then it should be easy to instrument it and use it as a management tool (more about this in future articles).
Effective strategies can be displayed as a dashboard that shows:
- Progress made on each major initiative
- Whether the strategy is having the desired effect
- Whether spending is aligned to results
- Unintended consequences
Deviations are easily identified, and senior leadership can decide on quick corrective action.
Tactic 3: Link Strategies
Very few organizations have a single strategy. There’s the “Enterprise Strategy” supported by the marketing strategy, the IT strategy, the product strategy, etc.
In practice, these links get lost. For example, two division heads look at the same overall goals and come up with two different ways to achieve them. Their division strategies differ, and sometimes conflict, even if they both appear to support the overall strategy.
Organizations need to show how strategies are linked. Every executive who defines a strategy (even a simple one, like improving the service on the service desk) must be able to show how that links to the strategy above them and in other divisions, and ultimately to the enterprise strategy.
Enterprise architects play a valuable role here.
Tactic 4: Only Create a Strategy if You Have Authority
Decisions can only be made by someone who has been given the authority to make them. The same is true of strategy. One can only define a strategy for an area over which one has authority.
Many organizations delegate the task of strategic planning to a separate division (often enterprise architects), which creates the strategy, then finds itself struggling to get business leaders to follow it—even if it is endorsed by someone in the C-Suite. Since they have no authority over the business areas, the best they can do is try to influence those who do.
While it is helpful for a specialist to facilitate the strategic planning process, the executive accountable for the business area must own and drive the strategy directly.
The executive accountable for the business area must own and drive the strategy directly.
Tactic 5: Budgeting Is Not Strategy, But It Must Be Linked
The most common strategic planning practice is to define strategic plans as part of the annual budgeting process. Interestingly, research shows that the most common reason for strategies failing is the lack of budget!
The assumption is that the plan is translated into projects, and projects are in the budget. Therefore, as long as you stick to the budget, you’re achieving your strategy. Right? Wrong!
In reality, the more volatile the market, and the more agile an organization, the more likely it is that its strategy (and budget) will need to be adjusted and tuned during the year. Organizations who shelve their strategies once budgets are defined find themselves at a distinct disadvantage when reacting to changes in the market and inside their organizations.
There’s More to It
In future articles, I’ll look at how to make these five changes to write, execute, and manage strategies effectively.
David Cannon is known for crafting industry best practices for strategy and IT operations, which he uses to make organizations function more effectively and efficiently. He has led consulting practices in Forrester, Hewlett-Packard, and BMC Software, creating effective operating models that exploit both business and technology capabilities in integrated solutions. David believes that successful digital strategy is an enterprise initiative that integrates technology from multiple internal and external sources to achieve business success. He is the coauthor of the ITIL 2007 Service Operation book and the ITIL 2011 Service Strategy book, and he was awarded two lifetime achievement awards by itSMF. Follow David on Twitter @itilso.