How to build a business – Strategy Execution Cycle

Building a Business starts with an idea, which is then converted into action.

Simple and straightforward, but not always enough to be successful. Libraries can be filled with books about how this conversion is done, and usually the terms Strategy and Management are introduced on the first page. It is not always clear what is meant by the terms, and the explaining usually involves many more terms, like mission, vision, leadership. Once you are sufficiently confused you are lucky if you can understand where the author is taking you. Bullshit Bingo is never far away.

What is a Strategy really: is it a statement, or a plan, or just a hypothesis about value creation?

And what about Management? Sometimes you are introduced to the world of let it all run it’s course, your people will know what to do, the collective will manage itself (as Ricardo Semmler does), and sometimes to give every single employee a specific responsibility and task, and constantly measure how the task is performed, with Key Performance Indicators (Robert Kaplan).

Unless you want to turn into a one-man show, it is important is to be able to share your idea with others: Why do you want to do it, what do you want to do and for whom. And how will you be successful: Can you identify what the success-factors are, decide which of the underlying activities are vital and are you able to measure if they are performed up to the standard you have set for yourself and your business?

There is no single truth of course: are we talking about a bar in Berlin, a multi-national enterprise run from the United States, or a Production Plant in China? Hardly the same thing. Where you do it matters a lot: Context is crucial.

Equally important is who you have around you. Can you inspire them and share your vision and some of your responsibilities with them, delegate some of the vital activities to them? Time to get organized.

This requires planning and probably money. Decisions are needed on what initiatives have priority are and how they are funded.

Once you are in business the execution of your idea needs constant evaluation and adjustment, just like a hypothesis needs testing and change.

We believe these are five steps that not only reflect common sense but are also universally crucial to bring a business idea to fruition. We have called this approach SCOPE. An acronym where each letter represents a stage in the process of Strategy Execution:

Strategy – Context – Organisation – Planning – Execution

For Qhuba and its clients we have taken the “buffet approach”. You will pass all the five stations, but what you use from the process and the templates depends on your needs and appetite. The full cycle looks like this:

Slide2

In the middle the basic templates for communication:

  1. The Business Blueprint, which describes the building blocks behind the idea: the values, and the vision, the words you want to own and the x-factor you think you have. In short: the success-factors
  2. The Strategy Map, which describes the value creating activities through series of cause and effect linkages, clustered per success-factor
  3. The Scorecard, which describe the objectives per activity per success-factor.

Nothing is new here, nothing is revolutionary. The Plane, the Crew with the Flight Plan and the Cockpit, if you like analogies.

The only aim is to make a clearly defined approach with unequivocal terms and definitions and some practical tools available for all.

In five short articles we will describe the five steps, as well as the three tools, and then we will go through the whole sequence for our own company.

If you like the approach you might want to do the same for yours.

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