Lets focus on a few moments on strategy formulation. Now this is a huge topic, I mean what we're talking about is, how does strategy get set inside organizations? So of course there's all kinds of ways organizations can approach strategy formulations. I'm going to touch base on a few of these different approaches just to give you an idea of what the different processes are that you might try to employ as you attempt to set strategy in your organization. But this is by no means a comprehensive list of all the different ways that you could set strategy inside an organization. I want to just give you a sense of what some of these ways of approaching strategy formulation might look like. So, let's start with a formal strategic planning process or exercise. So this is, I think, the most common way that organizations engage in trying to set strategy. They have a sort of formal strategic planning session. And this might be something that comes up on an annual basis or a quarterly basis, or on some sort of a cycle where the organization has set aside time formally to sit down and say, hey let's re-look at our strategy. Are we doing the right things? Are we focused on the right things? Are we competing in the best way that we can, et cetera. So as a practical matter, this is how it sort of unfolds in a lot of organizations. The problem, the challenge is, that a lot of times this can just be sort of subsumed within the sort of annual budget cycle, right? So, when that happens it doesn't end up being so much strategic thinking and sort of strategy setting, it's more of a planning exercise. And honestly it can oftentimes be more of a budgeting exercise. So if that's what it looks like in your organization, there are some downsides to that. We know from a lot of research on this that budgeting processes can breakdown. They can turn into sort of coalitions and empire building. What you have is a bunch of different division managers, or folks that are in charge certain aspects of the organization. And often times the resources of the organization are viewed as a fixed pie. And what's sort of on paper is described as a strategic planning exercise, really just turns into sort of a dog fight over resources for next year, right? A lot of this can be dominated by making projections, right? So, we grew at4% last year in our division, so we want to budget for 5% growth this year, but it's sort of arbitrary. It's more about sort of taking care of yourself and defending against the resource allocation that might go to the other parts of the organization and that sort of thing. So, these are the things to be cautious about if your organization approaches strategy as a kind of annual or semiannual or quarterly exercise in planning and budgeting. You want to take a step back and make sure that it doesn't just sort of turn into a budgeting exercise, where everyone throughout the organization is looking out for their division, or their area's best interests, right? S let's go back and let's think about some different approaches we might take that might help you avoid that fate of just having your strategy-making process turn into just a budgeting exercise. So, here's the first one I'll talk about, it's known as the strategic war room. So, this is another military analogy. It has its roots in Winston Churchill in World War II. Where he would have specific room, specific locations that were set aside where he and his cabinet would sort of think strategically about the war effort and sort of make their plans, right? So, similarly today, it is about having a specific space set aside where there's room for visual representations. You can sort of get out of the boardroom or get out of your normal corporate office or wherever it is you're located. And go somewhere different to a place that's set aside as kind of a war room if you will. So, what are the typical elements of this approach? Well first of all, the first and maybe the primary element of this approach involves what's known as storyboards, and this might also be known as sequential thinking, or displayed thinking or visual sequencing. And what does this look like? This involves sort of putting up visual representations, of kind of your assumptions, and the strategies you think it might unfold in the organization. So you might think about this as sort of like panels in a graphic novel or in a cartoon, right? And so you need to have a lot of space in your war room to put a bunch of that stuff up on the walls. So that you can sort of sit back and look at each of those representations of actions or ideas and reflect on those things. And a lot of times the insights emerge not only from thinking about what's happening in this panel, what's happening in this scenario, but it's also about seeing what happens between the panels and between the scenarios, right? So the ha moments often times emerge from thinking about sort of the logical sequencing of events that lead from one panel or one image, one visualization to the next, right? So, this idea of storyboarding really refers to kind of the thought structure of sort of seeing how things might unfold. So, why do you do storyboarding in a strategic war room? It's to help you manage the data. It can help you sort of process all of the inputs and all of the data, and all of the things you're thinking about. It can illustrate things in way that might help you see something you didn't see before, and it can be engaging, right? So that's the storyboarding aspect of the war room and there's some other elements as well. It involves members from all across the organization ideally. So you don't just want the three or four top managers in that room. You want to pull people in from throughout the organization so that you can gain their insight. And you want to do that from the beginning, right? So involvement of a broad range of organization members, that's a big deal. It might also involve subject matter experts. This is an opportunity for you to bring in consultants or people on your board that work at other organizations. Or others from outside of your normal organizational structures and processes that might, again, see something from a different vantage point that might help you see something you didn't see before. And the point here is to gather input from diverse perspectives, all throughout and even from outside the organization. So, this approach can foster collaboration. And it allows you to sort of naturally to go through a process of iteration as you formulate your strategy with all of that input from a variety of stakeholders. So, that's sort of the approach in a nutshell of the strategic war room. And again, it's just a way of structuring the process for setting strategy in a way that might bring out some things that might be interesting or that might have been missed. The strategic war room.
