A Strategy OS Delivers Business Success (Part 2)

This post is the second in a series describing how a Strategy OS delivers your Business Model. In Part 1, I described the elements of your Business Model. In this post, I give an overview of the Strategy OS itself that delivers that business model.

Many businesses view strategy as an event that happens as needed or maybe every one to three years.

Healthy organizations view strategy as an ongoing process that allows them to define and execute their mission in a way that grows steadily toward their vision. A Strategy Operating System (Strategy OS) links strategy creation with execution and feedback to make progress on a daily basis. This approach is fundamental for business success, so stick with me to learn how to build and flex your strategy process muscles.

The Strategy OS has 3 key activities:

  • Envision: Define the enduring properties of the business and how it will be achieved in the medium and near term. (Steps 1-4)
  • Transform: Execute the strategy on a daily, weekly, and quarterly cadence to create changes that make progress toward the company’s strategy and positioning. (Steps 5-6)
  • Adapt and Sustain: Review progress on a regular basis to asses success and improvement priorities and to understand what thematic changes are needed to grow and stay relevant. (steps 7-8)

The Steps:

This overview is a high-level introduction. I will expand steps in future posts.

1. Commit to a System:

Much like in AA, the fist steps to success are to admit you have a need and to accept that there are systems that have delivered the results you are looking to achieve. The strategic operating system that you choose must be made explicit to create buy-in, a common language, and shared accountability to making the system work.

The idea of strategy as an operating system that links planning with execution and feedback is not new. The concepts have been developed and repackaged over the years by many academics, practitioners, and writers. Each has a little different focus and different terms, but share common elements. The most important factor to success is to pick one that works for your company and people.

Agree to diligently follow it (at least among your executive team.) Publicly commit to it as your Strategy OS. Share it across the organization to create common process, language, and tools. Follow it to document, communicate, and hold each other accountable to an ongoing strategic process.

2. Define Positioning:

Positioning includes the strategy elements that should be rock solid: Mission, Values, and Vision. These guide key choices and help to give direction when uncertainty rises. When you get them right, you can carve them in stone to endure beyond anyone’s tenure in the company.

You may already have positioning statements documented for your company. If they serve you well, you may not need to modify them. But, most businesses that are just starting to implement a Strategy OS will want to revisit them to ensure they are solid touch stones for at least the next 10 years and ideally indefinitely. If you are stuck, look to other companies, brands, and people for inspiration.

To start, make sure you have a documented statement for each Positioning element as you start to implement your Strategy OS. Create your Mission, Vision and Values in a working session that allows key leaders and influencers in your company to give input. This will produce a better result than any individual can create. Test drive your positioning for a quarter and revisit whether it is serving the intent at the next quarterly meeting (see 6, Execution Rhythm.) When you have a couple quarters with no changes, it is time to start making these statements the corner stones on which the Strategy OS is built and run. Publish them widely. Refer to them when evaluating all other components of your strategy and your people. Point to them for decision guidance.

3. Tune Strategy:

Strategy in this context refers to the dictionary.com definition: “a plan of action or policy designed to achieve a major or overall aim.” In this case, the overall aim is to achieve the Positioning created in step 2.

A useful construct in creating your strategy is to organize around the major Themes that advance your Positioning. Themes are broader than plans or programs in that they offer guidance about what is needed without limiting possible plans of action or timeframes. They are destination statements describing with details what the business looks like at some future date from a variety of perspectives. Since it is difficult to envision a clear future much further out than about three years, use this as your timeframe to create destination statements describing your major next achievements. Make these statements challenging and motivational, but within the realm of possible outcomes.

These destination statements come from assessing how you can best use your business talents and unique capabilities to win given the business’ Context. SWoT analysis, competitive positioning, customer segmentation, adjacent markets, best practices, and internal gap analysis are some of the many ways to generate Theme ideas. From the universe of possible destinations, group, prioritize and focus on the top 3 to 5 (no more than 7) that can have the largest impact on success. Give them short titles that become your Themes.

Once you have your priority Themes, ensure they are well understood by giving each at least one descriptive Objective and measurable Result that demonstrates attainment of that Objective at the end of the planning horizon (similar to OKRs, but start with a longer time horizon.) This process helps make the Theme more concrete and allows the right focus of resources needed to achieve the Theme. Be flexible; as the example suggests, some Themes’ Results may be less tangible than specific measures in this planning horizon. But it should always be easy to determine whether the Result was achieved or not.

4. Annual Planning:

Annual planning, as the name suggests, involves envisioning the company one year out and setting Targets and Initiatives for the next 12 months. This step works much like the strategy exercise in step 3, but the timeframe is narrowed to one year and more detail is added to create clarity of focus for the next year about key results that will work toward the Strategy Objectives. Stay light weight. Planning can be as simple as creating Targets, Initiatives for each strategy Theme created in Step 3. Then give these a Budget that includes people and dollar allocations. This annual meeting is a special iteration of the Quarterly Strategy Refresh meeting. The format is discussed more in Step 6, Execution Rhythm.

All plans come with risks and uncertainties. Creating plans is a good time to raise known or possible Issues that could impact your ability to deliver them. The Issues list is a key tool for decision making, barrier removal, and problem solving. You might solve a couple priority issues in your annual planning. Most Issues are managed by keeping a priority list that is worked on during recurring meetings as discussed in step 6.

5. Quarterly Pulse:

People are programmed in a way that makes it difficult for them to stay on plan much past 3 months without a need to refocus on priorities. Quarterly Pulse creates the checkup and resetting that ensures efforts are still aligned and making progress toward the annual plan created in step 4 and ultimately the overall Strategy. The format is much like step 4, but this time the timeframe is narrowed to 3 months, again with more detail. Create quarterly Goals that support the annual Targets, and Rocks that support annual Initiatives. These define key results for the near-term that ensure progress on a daily and quarterly basis is contributing to deliver longer-term Objectives.

Each Rock and Goal has an owner. Each person on your executive team should have 1 to 4 in total. These are decided, tracked, and refreshed in Quarterly Strategy Refresh meetings. Their format and timing are discussed more in Step 6, Execution Rhythm.

In most companies, Budgets are set annually and only adjust if circumstances change dramatically. We continue to measure quarterly progress against the annual plan. This adds stability and commitment to planning. In more nimble companies, dollar and people changes can be made quarterly as long as revenue and margin target impacts are acceptable and people don’t feel whip lash from frequent, dramatic changes.

6. Execution Rhythm:

When used correctly, every day is a day that runs on your Strategy OS. Recurring meetings reserve time to continue to focus on Values and Mission at each level of strategy to make regular progress toward the Vision.

Execution Rhythm is created by following the bulleted fundamentals on the right of the diagram above for all meetings. These points help ensure all meetings get the attention and participation that is required to deliver value. These along with practice executing to the agenda and time management deliver strong results.

There are five key meetings every organization needs to get good at executing. They are listed on the left of the diagram above. These standing meetings focus on the key sections of your Business Model to their right. Starting from the bottom, they have increasing timeframes as you go up. They are:

Standup meetings to ensure daily coordination and commitment at a team level. Agile development teams are familiar with a 15 min standup meeting to keep progress moving. Standups allow all participants to share answers to three questions:

  1. What did I accomplish since last meeting
  2. What will I accomplish by next meeting
  3. What blocking issues do I have

These meetings create coordination, accountability, and commitment among team members and ensure continued progress.

Leadership Team meetings keep focus, accountability, and remove barriers to success on a frequent basis. This meeting can be held at any leadership level, but the executive team should be the first to adopt it. The main focus is delivering the Goals and Rocks developed at the most recent quarterly planning. Most executive teams will meet once weekly for 1.5 hours.

The first part of this meeting is similar to a standup in that it is designed to coordinate progress and surface issues. Score card review and company highlights start this activity. It then borrows from a standup meeting for coordinating more closely around quarterly Rocks. The second part of the meeting reserves time for the leadership team to work together to solve priority Issues and remove barriers.

Strategy Refresh quarterly meetings focus on ensuring the near- and medium-term strategy elements are still relevant and are on track to be delivered. This meeting primarily defines the quarterly details by assessing Goals and Rocks accomplishments from the last quarter and agreeing to those to be delivered in the upcoming quarter.

One of the quarterly meetings should expand to allow for an Annual Strategy Refresh. This is dedicated time for the executive team to revisit step 3 and renew step 4 each year. I like to time it the quarter before year end so that it can feed into annual budgeting by the end of the year. This meeting expands the regular quarterly agenda to add updating the annual planning originally created in step 4.

The Council helps ensure your company stays in touch with its Positioning that it stays relevant with evolving changes and trends in the Context in which it operates. Where other rhythm meetings are focused on execution, this meeting is focused on the Strategy OS and the Business Model itself.

ACT meetings help teams and individuals continue to grow and deliver results. These meetings are one-on-ones between employees and their managers. They should happen weekly at all levels of the organization. Mochary (pg 133-4) describes three elements that must happen in both directions at these meetings:

  • Accountability is declaring a destination (vision, objectives, results, measures); the action steps to get there (todos, rocks, initiatives); and whether those actions steps were taken (and eventually the destination achieved).
  • Coaching is declaring the current health of the entity (individual, team, department, company), both the good and the not good; and with the not good, what the issue is in detail and a proposed solution. (This is where reports can make requests for help from their manager.)
  • Transparency is declaring (to a person’s manager, peers, and reports) feedback to people on what they are doing, using the following framework: Like: “These are the specific actions that I like that you are doing.” Wish that: “These are the specific actions that I wish you would do differently.

7. Monitor:

This step focuses on checking the internal health of the organization and strategy by monitoring Results. It creates fast cycles of feedback to help steer daily activities. A company Score Card with key measures is the primary tool that ties together all the strategy elements in a way to verify progress and achievement. Completing Rocks or any action is only of value if it can eventually be measured on the score card in a way that demonstrates Results are achieved and you are working toward your Vision.

Score cards can be simple with a matrix of past scores to show trends and a color code of green, yellow, or red relative to goals to help point out needed attention.

Themes are a good organizing item to group Result measures (some call these KPIs) and track progress of related Objectives. I like to also add Rocks related to the Theme to the score card and show them color coded to indicate whether or not they are on track. Often reaching the Goal requires having a Rock complete.

Update your Score Card weekly and review it as part of the pre-work for your Leadership Meeting (Step 6.) This ensures you know whether you are getting Results from your daily and weekly actions that work toward Goals and Targets. If not, raise Issues that it highlights. Give it extra scrutiny at quarterly meetings to help ensure you are ultimately progressing to deliver the strategy Themes and your longer-term Vision.

8. Adapt and Sustain:

This step focuses on creating the feedback loop that all complex systems need to be successful. It starts by monitoring the environment or Context in which your company competes to ensure your Positioning and Strategy remain effective. As a reminder, Context impacts strategy through internal resources and capabilities relative to external trends. Your strategy must continue to update and refine how you will compete to win within an evolving Context through your product market fit, and go to market activities, and other Themes.

The most important thing leaders can do to support this step is listening to customers and employees. Support reps on sales calls. Conduct customer surveys. Check you support desk and other customer facing processes that define your business to the world. Understand their needs and ensure customers see you how you want to be seen. Similarly, find ways to get feedback from your employees. Open office hours, suggestion boxes, and management by walking around are tactics.

The next most impactful things leaders should do is to schedule time to work “on” the business away from the day-to-day “in” the business work. Many leaders I know schedule at least one hour per week for this “thinking time.” The best leaders schedule longer blocks of time weekly and schedule full day or longer blocks each quarter. Wickman (pg 214) calls these Clarity Breaks. This is not time to catchup on work tasks. Instead be alone, away from work, with a note pad, and no distractions. Focus on important questions like Positioning, Context, priorities, people, processes, products, nagging issues, emerging trends, and how you structure your own time and work. You can start with written questions from the week, or focus on what comes to you. The outcome should be ideas that can lead to expanded opportunities, accelerated success and more relevance.

Many of the ideas from customers, employees, and clarity breaks can be added as Issues for your Leadership Team meetings (Step 6) and implemented quickly. Or, they can be larger Issues to work on at the next Quarterly. The Council meeting (Step 6) is an opportunity to further develop more complex ideas from these exercises. The most important insights create a learning loop that feeds back into Step 2, Define Positioning or Step 3, Tune Strategy. In early stage companies, it can create a pivot causing major changes in Step 2. Or, more typically in established companies, it impacts the understanding of Positioning and feeds annually into Step 3 to create new Themes and clarify priorities.


Much more to come on Strategy OS. The Business Model is defined in Part 1. You can get more info on key steps in implementing you Strategy OS by starting with 7 Habits for Success.

If you would like help in creating and executing a Strategy OS, find out more about workshops I run or schedule time with me on the About page.

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