Designing the Modern Strategy Office
Leaders designing their strategy office from scratch face a host of challenges.
These challenges often stem from a tension intrinsic to all strategic operations: vision vs. execution—the process of turning macro-trends into actionable business plans. Who will contribute to each side? How closely should CEOs steward strategy offices? How can strategy officers build bridges between strategy and execution?
Such were the questions investigated at a recent Outthinker Strategy Network forum. We spoke to seven strategy executives at the SVP and C-level who offered best practices for designing the strategy office. These were their conclusions.
3 principles when designing a strategy office:
1. Cleary define the function, and eliminate excess. Upon stepping into the chief strategy officer (CSO) role, one contributor found that the team he was leading was unfocused and spread thin. The team’s size had expanded enormously and team members were working on an array of disparate projects, many of whose value could not be traced back to overarching business objectives.
The CSO’s first course of action was to define the strategy team’s function. He did this using a combination of independent brainstorming and feedback from the broader organization. By narrowing down precisely defined goals and responsibilities, he reduced the team’s personnel by 50 percent (largely redistributing them to other dimensions of the organization) and restricted the team’s efforts to projects with well-defined value-add. This narrowed the team’s scope and allowed them to focus their efforts on projects that would have maximum impact on organizational objectives.
Not all CSOs’ methods will be so extreme. But all strategy offices benefit from clearly defined functions informed by internal analysis and external feedback.
2. Build the bridge between strategy and execution. There is a natural expertise gap between strategy teams and operations teams. Strategy teams excel at envisioning new opportunities, while operations teams have more intimate familiarity with the business and can view strategic initiatives in terms of the actual resources their execution will require.
Similar tensions may arise when a single corporation contains many individual business units. The C-suite will understand the corporation’s overarching objectives, but may not have day-to-day intimacy with each business unit.
One VP of Business Operations and Strategy advised treating these tensions as “constructive tensions.” Finding the intersection points between different realms of expertise allows strategy offices to capture the benefits from each area of the business.
3. Establish a seasonal cadence of progress checks. CSOs who designed their strategy office found consensus around a rhythm of check-ins consisting of quarterly and yearly milestones. (The cadence may vary by industry; teams in volatile industries like technology may benefit from more frequent alignment sessions.)
One CSO described a timeline starting with a “strategy season” lasting from February through May, during which major industry forces are analyzed and strategic priorities are chosen. The summer months are devoted to supporting business units through their individual strategies. The months between September and February are when the team is “hyper-innovative,” focusing on auxiliary projects whose results may impact the following year’s strategic initiatives.
Others recommended quarterly checkpoints to review the connection between strategy and execution. Key performance indicators (KPIs) must be decided in advance, and used as guiding metrics during these meetings. Sample KPIs include change in market share, performance relative to competitors, and speed of project progress.
The task of operationalizing strategy involves a good deal of iteration, during which people’s ideas will be criticized, modified, and possibly nixed in favor of more viable concepts. Particularly during the ramp-up phase, leaders should be mindful of the need to be patient and empathetic with their teams. It’s the strategy leader’s job to maintain a tone of empathy, aligning everyone around the mutual goal of identifying and implementing the most compelling concepts.