#12 How to plan a strategy process properly

In the first episode of the new "Strategy Knowledge" format, Christian Underwood explains how to set up a strategy process properly, which factors to consider, and which questions you should answer before the process even starts.

It comes down to 12 core questions:

Which part of the company is the strategy intended for? Situation analysis: What overarching objective are you pursuing with the strategy, and what kind of strategy is it? What is the shared language in the strategy process? The time factor in the strategy process: What shelf life should the strategy have? What basis (mission statement, BHAG, etc.) is the strategy aligned to? What time horizon does the strategy process itself have? Which strategic framework (methodology) does the process follow, and what is the shared understanding of strategy? Who sponsors the strategy process? Who acts as the operational strategy process or project manager? Who needs to be involved in the strategy process and actively shape it?

Do you need an external strategy consultant or Strategy Coach? And if so, which one and when? How is the strategy process communicated?

For the exact answers to these questions, plus the tips and tricks that apply even before you start planning a strategy process, listen to the new episode #12 "Strategy Knowledge: How to plan a strategy process properly" or read the detailed show notes.

Detailed episode description:

For many people, strategy is an intimidating word, and they struggle with it. That's why, at the start of a strategy process, things often aren't called by their real name. And there are usually good reasons for that. The term is misunderstood, or it has already been used for so many things inside the company that it comes loaded with baggage. So instead you hear about repositioning, realignment, a new focus, or a strategic journey.

That's why the first conversation needs to answer the key questions for the process and reduce the risk of misunderstandings up front. Otherwise you end up with a result nobody wanted at the outset, because different terms and different language never created the clarity you needed.

In this episode, Christian brings 12 questions you should have a clear answer to before the strategy process begins:

Which part of the company is the strategy intended for? The first level covers the entire company or group of companies and leads to a corporate or group strategy. The focus here is on which markets and industries you want to operate in and which synergies emerge across the portfolio.

As a second level, Christian names a business unit or division, where a business unit strategy is developed. Here you deal with the question of how the company competes in a specific business field and which opportunities you can use to build competitive advantage.

The third level, the functional level, is where you find the company's functional strategy. Here the main focus is on how individual functions should work.

When developing the strategies described above, it helps to have an overall corporate strategy in place, with all business unit strategies aligned to it. In practice, though, you often encounter the absence of strategy at the corporate level. Even then, it's important to know where and how to deploy your resources in your own area. A suitable situation analysis, for example, can get you there. You should also consider whether the strategy applies across different countries and regions, since not every market behaves the same way. To get clear on the scope, Christian always recommends taking the perspective of the company as a whole, because this question should already be answered at that level.

Situation analysis: What overarching objective are you pursuing with the strategy, and what kind of strategy is it?

At the beginning, you should be clear about the kind of strategy you're pursuing, since different approaches carry different risks and opportunities.

If you bet everything on growth, for example, you have a growth strategy. If your thinking leans more toward the future and the company's ability to stay viable, you develop a future strategy. Examples of partial strategies would be a sustainability strategy, a digital strategy, or an innovation strategy. A wide range of factors can form the basis for this decision.

In this context, the link to the overall strategy often stays unclear. That's why many strategies exist side by side. What matters then is defining the reach of each individual strategy precisely, so you can use its strengths to the full. This can also be essential when you need to clarify what should and may genuinely be questioned.

Is the main goal of the strategy process to realign the core business? Should new, innovative business fields and business models be developed? Or should the focus be a dual approach that connects both and drives them forward in parallel, with integrated planning?

This raises key questions about the leadership team's approach. Are you taking a brownfield or a greenfield approach? What can we as a leadership team really put on the table? It gets uncomfortable when the boss talks about greenfield, a blank slate, but has in fact already planned the new factory for the existing product portfolio and isn't looking for experiments.

So this is about clear expectation management with everyone involved. There is hardly anything worse than a company's top management sitting down together, developing innovations and new business models that in the end nobody wants or implements. That leads to wrong information, unmet expectations, and ultimately major disappointment on all sides. That's why situation analyses as targeted preparation are so decisive.

What is the shared language in the strategy process?

Shared language refers to several things in the process: the label you give the strategy process, the name of the strategy itself, and the actual language the strategy process is run in.

Even before the strategy journey starts, you can think about the name of the strategy. It's a very early point in time, but the name matters. Giving the strategy a name helps you actively shape how it will be perceived and received in the end. Gathering information on this and building the relevant knowledge is part of that. So it should absolutely be factored into execution.

Strategies are often named pragmatically. In everyday corporate life you find strategies and strategy processes labeled "Strategy 2025," "Strategy 2030," and so on. Naturally, that stirs little emotion among employees and everyone else involved. One tip is to step in at this point and give the strategy a programmatic name, because you need a strong message internally and externally.

But language matters beyond the overall name, which is why this question is asked very deliberately at the start of the process: it's closely tied to the goals of the strategy. Should the strategy process be run in German or in English? Many clients are German companies or global players whose top management often includes Germans. This calls for a linguistic balancing act, because not operating in your native language can be difficult. Words and letters can make a decisive difference to the strategic direction, since they carry critical information and knowledge. Even in international top teams at group level, this is a big topic. And when colleagues join who are native English speakers, the power dynamics can shift in the strategy workshop, the strategy process, the strategic direction, and the overall wording. That's why Christian always insists on clarity beforehand and pays particular attention to it during execution. There are always ways to resolve these issues, for example through translation and adaptation. Because this is rarely about one-to-one translation; it's about fitting adaptations.

The time factor in the strategy process: What shelf life should the strategy have?

Christian's experience shows that over the past ten years, a corridor has emerged that often puts the half-life at three to five years. That's the range for the strategies developed with clients today. Parts of the strategy process, such as certain assumptions and situation analyses, still need to be reviewed at least once a year. The environment changes fast, information expires, and knowledge becomes outdated. Even so, three to five years is a good order of magnitude, because it allows the strategy to be traced through implementation and execution. Strategy needs time before the intended effect kicks in, the goal is reached, and the strategy becomes visible.

What foundation (mission statement, BHAG, etc.) is the strategy built on?

The first thing to check is whether there is a company mission statement with a vision, mission, and values, a BHAG (Big Hairy Audacious Goal), a WHY statement, or a defined purpose. All of these can serve as a guiding light or north star for the strategy. If none of them exists, you need a strategic foundation. Ideally, you define one before the strategy process even starts. A vision, mission, and BHAG are generally the better fit. Their validity horizon tends to be somewhere between ten and thirty years. Under no circumstances should you sketch this out on the side during a strategy process. Instead, set clear goals from the start. Even when a mission statement exists, it can't always be carried over one-to-one into the new strategy. In those cases, Christian uses the Impact Proposition method. It describes a target state or impact that the company wants to create. This can be a blend of many things. What matters is anchoring it above and within the target picture so that topics like value proposition, clear goal setting, and competitive focus have something to hold on to. That can give a good strategy extra strength.

What time horizon does the strategy process itself have?

This has a dramaturgical component above all. Christian also receives short-notice requests where the strategy is supposed to be finished in two weeks. He turns those down flat. In two weeks, important steps such as a sufficient situation analysis simply can't be done, and even the most sophisticated methods would fail here.

To ensure a reasonable quality of analysis, plan for four to six weeks. With a lot of strategic effort, four weeks can be enough, but if qualitative and quantitative information or data are still missing, a substantial analysis can take up to three months.

After the analysis, you need time for at least two workshops. The first workshop is held with top management and focuses on building a shared understanding of the situation analysis and the target picture. The second workshop takes place with the extended leadership team to translate the target picture into concrete fields of action with specific measures. A proven approach is to leave at least two to four weeks between the workshops so the content has time to settle.

The entire strategy process, by contrast, takes about three to twelve months. Execution shouldn't take longer than that, because otherwise so much will have changed in the meantime that you'd have to revise the strategy again before moving on to defining goals.

An important indicator for scheduling are the internal and external factors that determine when the strategy is released. These might be major industry trade shows where the new strategy is to be presented, or input from the advisory board or supervisory board. These occasions also regularly add knowledge that can strengthen the strategy. Events like these shape the strategy process considerably, set a time horizon, and make the goals of the strategy clear at every level.

Which strategic framework (methodology) does the process follow, and what is the shared understanding of strategy?

It's important to clarify up front which methodological framework you want to use. It not only provides the basis for analyzing, steering, and aligning the entire strategy process, it also helps make sure nothing gets forgotten along the way and that the shared understanding of strategy is defined. There are several well-known models and methods to draw on here. Christian works with the StrategyFrame he developed himself, which he explains in detail elsewhere. In short, it consists of three pillars: the situation analysis, the target picture, and the concrete fields of action. Only with all of these elements do you get a complete strategy, one that leverages specific strengths and bears fruit in execution.

Who sponsors the strategy process?

The classic sponsors for a corporate strategy are the CEO or managing director. In practice, a team approach has been requested a lot lately. Christian has a clear view on this: management or the executive board should be the sponsor of the strategy process. Responsibility can't be divided, and in the end there can only be one person who is ultimately accountable, even if several people have to carry the execution of the chosen strategy. Otherwise, the particular interests of individual players become too strong, weakening the process and bringing it to a halt. Concentrating accountability in one person helps create clarity and makes it possible to give clear direction when the situation demands it. Keep this in mind throughout the planning.

Who acts as the operational strategy process or project manager?

This doesn't always have to be the most experienced colleague. Young, fresh minds with a first solid network inside the company are just as suitable. But if they're too new and have no network yet, it can hurt both the timing and the substance of the strategy process, which is why planning and selection are everything here.

There's a lot of room to shape this, and Christian reports that he has seen many young colleagues deliver their first small masterpieces, apply strategic methods flawlessly, and ultimately make a decisive contribution to reaching the goals.

Who needs to be involved in the strategy and help shape it?

Co-creation is on everyone's lips, and it means more than mere involvement. Co-creation creates the feeling of having worked on the new strategy together, and execution gains far greater acceptance. But here, too, keep an eye on the right dose.

Different elements of the process call for different degrees of involvement. Not everyone needs to be in the big first strategy workshop. Christian recommends only the top management team there. Anything beyond twelve people adds limited value, because responsibility starts to blur. The extended leadership team can then be invited to the second workshop.

There are also ways to involve a wide range of people during the process. In the analysis phase, for example, qualitative interviews can capture the perspectives and expectations of internal and external stakeholders. This method offers a particularly nuanced view of the company's structures and divisions. It also surfaces information about the interpersonal dynamics among employees.

Christian is often asked whether employees outside the management team can be involved as well. The answer: it depends. A decision like that sends a symbolic signal to the existing leadership team and raises expectations among the people invited. The team dynamics of individual employees shift significantly as a result. If those expectations aren't met afterward, or weren't clearly defined beforehand, he advises against it. But if it's done well and communicated clearly, it can generate valuable input for the process and, later on, for spreading the strategy and building acceptance. Not a clear-cut answer, but a decision to weigh carefully during planning.

There's a recent article in the MIT Sloan Review on this topic: "Amazon Raised Its Minimum Wage – Will Its Rivals Do The Same?" It looks specifically at the advantages of a more open process in times of disruption. Well worth reading if you want to dig deeper.

Do you need an external strategy consultant or strategy coach? And if so, which one, and when?

Christian believes companies can handle a large part of the strategy process themselves. It's THEIR strategy, not a consultant's. The consultant's role in these strategy processes keeps changing. The armies of young consultants developing new strategies far removed from company reality still exist, but there are fewer and fewer of them. Today you more often find highly specialized boutique firms and colleagues with deep expertise who support the strategic process and its execution as facilitators or moderators. Even so, many mid-sized companies struggle with consultants. There are prejudices here, and they need to be named and resolved. Good, experienced consultants know this situation and can usually handle it well. What matters is a healthy mix of exactly what the company needs.

That said, there are areas where consultants and coaches can help and play an important role with the right expertise and know-how. You need someone who can hold up a mirror and say the things nobody internally dares to say. It also helps when you genuinely need fresh input and feel like you're just stewing in your own juices. The same applies when the company lacks internal resources in terms of time, skills and know-how (about markets, market potential and so on), especially when many projects are coming up that you can't handle internally in that form. A thorough situation analysis at the start of the company's strategy process can be very revealing, and above all it creates clarity.

How do you communicate the strategy process?

The days of secret projects are over. Christian recommends bringing teams and leaders along on the strategy journey as early as possible. Exchanging information behind closed retreat doors and having top management build the new strategy is no longer the answer, and it's only possible to a very limited degree. You can use the entire process, from analysis to setting goals, to involve everyone (to a degree) and signal that you're thinking things through. From there you can look at the company's current situation and choose your strategic communication content and channels very carefully. It doesn't have to be fully transparent, even though that's often promised and requested. The smarter approach is to convey a sense of success and progress throughout the process.

After the planning comes the focus on communicating the roadmap to the top management team. That team needs to challenge the approach critically, put its strengths to work deliberately and make a shared commitment of time and resources to the process.

Contact: Need help planning your strategy process? Send an email to christian@underwood.de.

Thanks for your interest, and see you in the next episode…

…because HOPE IS NOT A STRATEGY.