Focus: from findings to a target picture

What happens in the FOCUS step?

All the data from the situation analysis is in, analyzed and prepared as far as necessary. Now you have to reach insights and make decisions that give the company a direction.

The word focus comes from the Latin term for hearth. The step lives up to its name: this is where you have the controversial debates you could still avoid during the analysis phase.

At its core is a decision against something. Michael Porter put it in the shortest possible form: the essence of strategy is choosing what not to do. People struggle with this, because nobody likes to limit themselves up front and because a larger space of possibilities feels safer than a small one.

With limited resources, there's no way around it. It's not about one or the other, and it's not about both. It's about the one and not the other, because the other doesn't fit you or contradicts how you see yourselves.

In what sequence does the step run?

The sequence is fixed and each part builds on the one before it. Rearrange it and you'll be discussing goals before it's clear what they're supposed to answer.

The first point tends to get cut short, and it shouldn't be. Not everyone in the room was involved in the analysis, and without a shared level of information, half the room argues against numbers they're seeing for the first time.

Allow a good hour for the presentation. That sounds like a lot, and it's the hour that saves two later: every discussion in which someone questions a number they've never seen takes longer.

Present the results without your own interpretation at first. If you deliver the interpretation along with them, you create an anchor that nobody will argue against later.

Which questions take the team deeper?

Four questions have proven useful for turning findings into insights. They sound simple and they're uncomfortable to answer.

• Do your products offer value that beats the competition? What do you do better or differently?
• Where are you losing? Where is your company worse than the competition?
• Which offerings are profitable? And why those in particular?
• Where do you earn higher margins than the competition? And what exactly accounts for that?

The answers make clear what's really at stake. The decisive question is the one about causes: what explains the results you're seeing?

The second question is the least popular and the most valuable. Where are you losing? In most leadership meetings it gets answered with a reference to market conditions, and that's exactly when it pays to ask why a competitor is doing better under the same conditions.

Explicitly encourage everyone involved to question even the obvious connections. The most expensive assumptions are the ones no one ever said out loud because everybody took them for granted.

Why does this step get personal?

Because focusing means giving up certain activities, markets, or customer segments. And behind each one is a person who is responsible for it.

A "no, we won't be doing that anymore" is regularly read by managers as a decision against them personally, against their performance or against their ideas. That's human, and no amount of facilitation makes it go away.

What helps is a clear separation. Say explicitly that the decision is about the portfolio, not the person, and in the same breath say what that person's job will be going forward. Cutting something without offering a next step creates an opponent for the entire execution.

It also helps to name sunk costs openly as sunk costs. If today's infrastructure is the wrong one for the future you're planning, the investments already made in it are irrelevant to the decision. Hold on to the past and others will push you around.

What belongs in a target picture?

A target picture is more than a big goal. "We want to become number one" isn't one, because not a single decision follows from it.

It has four components, and they hang together. First, the impact promise, your why. Second, the customer value and the gains that come from it. Third, the target markets, customer segments, and your offering. Fourth, the objectives with their key results.

Each component has its own test question. For the impact promise: would someone outside the company understand what you stand for? For customer value: do customers see the difference? For target markets: is there a segment you explicitly do not serve? For objectives: will you know within a quarter whether you're making progress?

Again, the order is no accident. Only once it's clear who you create what value for can you say on which playing field you do it. And only once the playing field is set can you formulate objectives that aren't arbitrary.

In the end, the target picture has to fit on one page. Anything that needs more room hasn't been decided yet.

How long does this step take?

In our experience, Strategy Workshop I takes two and a half days. One day isn't enough, and that's the most common misjudgment in planning.

Before you start, you should be able to answer yes to three conditions: is the situation analysis complete? Are all the results prepared and available? And are the people in the room who are allowed to decide?

The third condition is the most underestimated. A workshop without the decision-makers produces recommendations. Recommendations require a second round, and by then the momentum is gone.

If any of the three answers is no, move the date. A workshop with an unfinished analysis ends with an agreement to finish the analysis, and it burns two and a half days of the most expensive calendars in the company doing it.

Also plan breaks that are longer than necessary. The decisions in this step need time to settle, and in our experience the most important conversations of the workshop happen over coffee, not in the plenary.

After the workshop comes the work on language. The formulations that emerge in the room are raw material. They get sharpened afterward, and only then go into the second workshop.