Having a strategy is absolutely critical for your organization. I’ve been guiding you through a series of articles to help facilitate your very own strategic planning conversation. We began by understanding the purpose and the strategic goals for your organization and delved deeper into the difference between strategic and operational goals.
In our most recent discussion, we talked how you can move away from a traditional SWOT analysis, where you take your strengths and weaknesses and use that constrained view to look at the world, and actually reverse that, understanding opportunities and threats in the environment and how you’re set up to capitalize on them.
Now, we’re at the most important—and most fun, interesting, and difficult part of strategic planning, which is where you actually figure out the strategy.
Strategic Planning Starts With Strategic Imperatives
At the heart of strategic planning are what I call your strategic imperatives. The term strategic imperative, for me, refers to a single imperative that, in combination with several other strategic imperatives, makes up your overall strategy.
A strategic imperative is essentially an insight into how you need to change the trajectory of your business. This includes changes in decision-making processes, shifts in guiding principles, and how these adaptations align with achieving your purpose and strategic goals within the environment in which you operate, given your current strengths and weaknesses.
By integrating all the elements that sit above the strategy on the strategy map—purpose, strategic goals, opportunities, threats, strengths, and weaknesses—we arrive at the essence, the “so what” of strategy. Our goal here is to understand:
- What we are trying to accomplish and where we are currently positioned?
- Where do we need to fundamentally change the way we make decisions?
- What will be our source of competitive advantage?
- What will we need to do next?
This set of typically four or five strategic imperatives should capture everything that matters, everything that is primary and critical to the health of your organization.
Strategic Imperatives Lead to Strategic Insights
Often, one of these imperatives will relate to your core offering. Is there a way your product or service needs to be different? Does it solve the right problem for your customers? Does emerging technology demand a shift in your approach? One of the most interesting examples of strategic insight in action is the development of the Nintendo Wii.
The gaming industry used to be very focused on speed and visual accuracy, with everything looking hyper realistic—and then Nintendo had this insight based on how the world was changing. After 9/11, people were spending more time at home. They were nesting and spending a lot more money in their living rooms. At the same time, parents were becoming concerns that games led to sedentary lifestyles and childhood obesity.
Technology advances were making gyroscopes and new user interfaces more accessible, and if you’re part of team creating strategy for Nintendo and you realize this, you start asking, “What if we could actually make our product more physical, more interactive? What if we could have it seen as a piece of exercise equipment?”
This is what led to the Wii—and to Wii Fit and Wii Sports, which transformed gaming into a physical, interactive experience.
It was a brilliant insight about how they could create competitive advantage, not by going further and increasing the realism of first-person shooters—they actually dialed back the realism—but by really redefining the product to be more interactive and physically active.
I remember buying my mother a Wii for her 75th birthday, something I wouldn’t have considered with other consoles like the Xbox. Nintendo’s insight fundamentally changed the direction of their product.
Strategic Imperatives Help You Understand What Needs to Change
Insights can significantly change the way in which you approach the market. It could be about reaching different customer segments, or making internal changes, like automating processes or changing the way the organization works together. If you can identify four or five critical areas in your organization that require a new way of thinking, a change in direction, or a new focus, you’re on your way to developing a real strategy that can engage everyone in the organization and direct collective efforts toward common goals.
I remember the strategy process of a U.S.-based technology company that was thinking about international expansion. Their initial goal was to grow with their small and medium-sized business customers, potentially expanding into new countries as their clients did. As they started to think strategically, however, they realized the enormity of becoming a fully global company. They would have to adapt their technology for multiple languages, establish global data centers, navigate European privacy standards…
For a relatively small company, the prospect of spreading resources too thinly to achieve global reach was much too daunting.
Their strategic imperative then became to be “global enough.” They recognized that if they could establish a presence in the United Kingdom and Hong Kong, they would be able to serve 80% of their potential customer base. This was the strategy that informed their recruitment, marketing, and sales. The strategic revelation was to focus on decisions that made them just “global enough” and aligning their resources and efforts with their capabilities and strategic goals.
Identifying Relevant Imperatives
At the strategic imperative level, the insights you’re looking for should answer the question, “What needs to be different?” Let’s consider a hypothetical scenario to illustrate this point.
Imagine you’re a not-for-profit organization focused on environmental initiatives. In the post-COVID world, you see that people are afraid, they’re avoiding public transportation and using their cars more, leading to increased fossil fuel consumption and heavier traffic.
Your organization’s goal is to promote environmentally friendly commuting alternatives, but as you’re seeing this, you realize that public transportation may not be the immediate focus—but cycling could be a key strategy. How can you make cycling a more viable option, though? The obvious answer is infrastructure. If you want to promote cycling, you need more bike lanes.
Then you recognize a strategic challenge: your organization has been working primarily at the national level, but so much of the infrastructure decision-making sits at the municipal level. While there is significant infrastructure funding available at the federal level, the most impactful decisions—the ones that directly create a more bicycle-friendly environment—are made at the local level.
The strategic insight that emerges is that to effectively promote bicycling, you must focus your efforts on influencing municipal decision-makers. The strategic imperative becomes “win city hall.” Every decision your organization makes must now be viewed through the lens of this imperative. How can you better influence local government? What skills does your organization have—or need to develop—to achieve this goal? You may need lobbying and advocacy at a level you’ve never done before.
Aligning with Your Purpose and Goals
This insight—the recognition that you’re here to decarbonize the commute, for example—can be extremely valuable. Maybe that’s the very purpose as an organization. And that means that your strategic coals should really be around the percentage of commutes and the number of hours of commute that can be shifted from fossil fuel-based to some kind of eco-friendly mode.
In a scenario where key decisions and necessary changes are predominantly made at the municipal level, your organization may find itself developing a strategic imperative centered on winning city hall. This level where you think about how to do things differently, how to make decisions differently, how to allocate resources differently. If you’re going to achieve your purpose and meet those strategic goals, you’re going to do it in the emerging environment, leveraging your current strengths and addressing your weaknesses.
Finding the Right Strategic Imperatives
Developing your imperatives can take a lot of work. It involves a lot of back and forth, experimentation, and fine-tuning. You may explore different things before you find the right one. But when you land on the right imperative—whether it’s becoming “global enough” or striving to “win city hall”—you’ll feel it. You can almost hear a “click” as everything falls into place and people start to rally around it. It will become very sticky. People will be talking about it in your organization, and that’s how you know your strategy is working.
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Next, we’ll discuss the final step in the strategic planning process and how you can put your money where your mouth is. Let’s talk about strategic projects.
Strategic Planning Series
How Does Strategic Planning Benefit Companies
Tips for Setting Strategic Goals
Common Mistakes in Strategic Planning
Video: You Aren’t Strategic Enough