Today, we start the strategy row of fundamental practices for success. Leaders can reach their vision by adopting these 8 practices.
StrategyOS works with these fundamentals by creating a process to execute them as part of your daily work.
Now, here’s today’s article covering how to use Themes to ensure iterative work at the Plan level contribute to delivering your vision…
Themes set a 2-5 year picture of how the business will look and are used to organize strategy execution. They advance your Positioning and are powerful ideas for medium- and short-term planning and execution. These ideas create focus when considering what should be your most important next actions. They establish priority supporting Initiatives & processes, policies, Rocks, Goals, Measures, and roles.
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. They are the secrete sauce to differentiate your business.
Creating Themes
Since it is difficult to envision clear outcomes too far into the future, use two to five years as your strategic planning horizon for Theme creation. Most will find that 3 years is optimal.
Themes come from priority destination statements that describe what the business should look like within that strategic timeframe. Destination statements come from assessing how you can best use your business’ unique talents and capabilities to win in the business’ Context. Make these challenging and motivational, but within the realm of possible outcomes.
Academics have spent more time and effort describing ways to evaluate business Context than perhaps any other part of strategy. You can use techniques like SW-T analysis, competitive positioning, 5 forces analysis, customer segmentation, value chain analysis, adjacent markets, best practices, and internal gap analysis as some of the many ways to understand Context. All these can add understanding, but they are difficult to evaluate and prioritize. The truth is, you don’t need any of them.
The best way get focus on important Context topics is to talk to customers, employees, and partners. I have found brainstorming with business and thought leaders that work in the business and with customers is the most useful way to generate your destination statements.
Break Context analysis into two pieces: First, Context is impacted by external factors that are trends that can impact your business. These trends consider the topics and sources listed below; most notably, changes in Customer Preferences, Competition, and Evolution of the Industry.
Second Context is impacted by how you respond to these with your internal abilities and unique capabilities. It helps to consider a structure for these like the balanced score card model that considers financial results that are delivered by the customer value you create and internal business processes that deliver them. They are enabled by core capabilities that allow for learning and growth.
The topics or perspectives for which you create destination statements can come from any idea, issue, or insight that could most impact success in delivering your Positioning and Vision. The most important ideas inform your Destination Statements. Borrow topics from balanced score card and the right column of this table.
Or, use another strategy model from 5-Forces, or 6M to generate other topic ideas.
Every Strategy must include two specific Themes: Your “Go to Market” and “Financial” themes.
Your Go to Market Theme is how you will sell and win business. If you need a structure, borrow from what is described by Traction (pg 55-65.) The elements are:
- Ideal customer
- What makes you unique to these customers
- Proven (sales) process
- Guarantee
The Financial theme defines your revenue model and includes at least two associated Measures: Revenue/ARR and Net Margin/EBITDA/Cash Flow. As you learn key drivers of your financial results add them as leading measures to give early indication of success. SaaS companies for example generally emphasize financial drivers by including measures like average selling price, customer acquisition costs, retention rates, customer lifetime value, and average revenue per user. Service companies focus on utilization and average hourly rates.
Finally, you must ensure the company never runs out of funds to operate. Cash management and fund raising are essential parts of the Financial theme especially for early-stage companies.
Find the few key leverage points that drive your bottom-line success. Elevate these measures to the Financial Themes.
From the universe of possible destination statements, group, prioritize, and focus on the top 3 to 7 that can have the largest impact on success. Give them short titles that become your Themes.
Once you have priority Themes, ensure they are well understood. Give them descriptions that can be used to ensure broad understanding. Ensure your team understands how they support and build on each other. The strategy map format is a good way to communicate their relationships.
Give each at least one descriptive Outcome and Measure that will indicate reaching the destination. Pay special attention to the core capabilities need to support the Themes. This process helps make the Theme more concrete and allows the right focus of resources to reach the Theme and your long-term vision.
Using Themes
🌟 Capture all your Themes on your Business Model Cheat Sheet.
🌟 Document processes and policies that run your business and organize them by Theme
🌟 Ensure there are roles that support delivering each Theme.
🌟 Use your Themes and strategy map to define key Measures for your business.
🌟 Use Themes to organize your scorecard to track outcomes, measures, and goals.
🌟 Use Themes to set direction for periodic planning refreshes.
🌟 Use Themes to organize and track Initiatives that close the gap between today’s capabilities and the Theme described future.
🌟 Use Themes to organize and track iterative Rocks to move Initiatives forward each quarter.
🌟 At monthly council meetings uncover Issues, Ideas and Insights about whether teams still feel like each Theme still has good:
- Relevance: Do we still have the right business model?
- Progress: Are we making the right progress?
- Mood: Is everyone still onboard?
Please follow, share, comment, like, and reach out. Message me if I can answer any questions or help address a specific need.
Follow your Passion, find Joy in your work, and create Freedom to pursue all life’s priorities.
Horizon Line Group 
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