Most companies think they have a clear strategy.
However, what they think is a strategy is usually nothing more than a set of goals.
A real strategy requires clarity on not only what you want to achieve, but how you will choose to focus on achieving this, as well as what you choose not to do as well.
Having worked for many years at one of the world’s top strategy consulting firms, we often encountered leadership teams who were not clear on which choices they needed to make to achieve their strategy, or even which strategy was correct for their goals.
We often used a tool called the Cascade of Choices framework to help clarify the strategy.
This tool can also be useful when developing an innovation strategy.
Cascade of Choices framework
In any strategy, there are five fundamental questions which need to be answered:
- What are our goals and aspirations? Becoming concrete about how success is measured. What exactly does the company or leadership want to achieve, and over what time period?
- Where will we play? In which markets will we focus, where we know there are sufficient ideal customers for our current and future offerings. This could be segments of a market, industries or geographic markets. Important: What are the markets and customers we are choosing not to have as a focus?
- How will we win in chosen markets? What aspects of our business will enable us to get customers to purchase from us? What is it about our offering that has sufficient perceived value, and how will we convince new customers? What will we choose not to do? [Note: This is often where companies can find new ways to innovate]
- How will we configure? How will we set up the business in order to achieve success? Which structures, assets, networks, processes, KPIs and management frameworks will be used to track success?
- What priority initiatives? Where are the gaps in our current business from where we are now to how we want to configure to achieve success? Which initiatives do we choose as having a higher priority now, and which current initiatives should be stopped as they are not contributing towards the future strategy anymore? What does our project and innovation portfolio look like?
By answering all of these questions in sequence, leadership can not only identify where they want the company to go, but also what choices they need to make in order to change the company to enable this journey.
Each set of choices has an impact on those both below and above it, hence why it is known as a cascade of choices.
And by identifying the limits of a company’s current configuration and capabilities, it can also act as a sense check to see how achievable the strategy and goals are.
But most importantly, it forces the leadership to make a choice. Analysis Paralysis can kill companies by preventing them from taking action. Only by making bold, clear choices can a company move forward and innovate.
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