Strategy Design Sprint (English Version)
Today we will discuss how to make a Strategy Design Sprint in your organization.
I will rely on Roger L. Martin to take a methodological guide and generate strategy in organizations.
Why do I rely on Roger L. Martin? Well, he has been one of the greatest precursors of Design Thinking and one of my favorite authors in innovation and creativity. In addition, he was awarded in 2017 as the #1 “Strategic Thinker” in the world by Thinkers50, a global ranking of the most influential business thinkers.
But the main reason is that along with A.G. Lafley (former CEO of P&G) created one of the most interesting and agile business strategy methodologies I have ever seen. What do I mean by agile? It means that the methodology foresees that there may be errors in the choice of your strategy, but you will always be on time to make corrections. That is to say, it uses Design Thinking as a “minimizer” of strategic risks by experiencing certain decisions.
So I will make a combination between Design Sprint (Jake Knapp) and the methodology Playing To Win (Roger L. Martin).
The basics of Playing to Win methodology consists on answering five big questions and generate different scenarios to be tested and thus choose the one that shows a better path to success. This is the big difference between making strategy which is based on Design and the old school of management strategy (Balanced Scorecard) where there is usually only one way to reach success.
By performing this combination, we seek to quickly implement a successful strategy with touches of creativity without losing the rigor of a good strategy.
Three main ideas of this methodology
- The strategy consists on taking decisions. To win, an organization must choose to do certain things and not others.
- The strategy is to increase the chances of success, but they are not guaranteed
- The elaboration of strategies should combine rigor and creativity.
Five questions, five elections …
1. What is your winning aspiration? This has to be an aspiration based on success and not just to compete. It has to be the purpose of your organization For example; to be a company with the highest customer satisfaction.
2. Where will you play? The Organization must choose certain criteria of where it will play: customers, channels, products or services, geography and/or production phase. Something you must consider to answer this question is that you will also choose where not to play.
3. How will you win? Here you will define the way you win in the field where you chose to play. There are regularly two options: differentiation strategy (Apple) and low cost strategy (Ryan Air). But Blue Ocean Strategy mentions that there is a third way, called Value Innovation (Nintendo Wii). And it is the simultaneous pursuit of differentiation and low cost.
4. What skills must you have? Here you have to set up activity maps. These strategic skills, when performed at their top level, allow the organization to implement its options where to play and how to win.
5. What management systems do you need? These are management systems that build, support and measure a strategy. Regularly these systems are rules, processes and measures that will tell you how well the strategy is working. An example could be a CRM.
As you can see, by answering each of the 5 questions you are making choices. These elections have to be done with data and information, you can’t risk making deliberate decisions. Later we will see what kind of tools you can use.
Strategic Workshop
Having understood the methodological basis of Playing to Win, let’s give it speed by turning it into a Strategic Sprint. We have designed this strategic workshop for four days.
Pre-Strategy Design Sprint
Like any kind of Design Sprint, we have to do the planning with time in advance for 3 to 4 weeks. I think it’s the right time to block the participants agendas and make all the logistics of the workshop in the right way.
Step #1. Choose the strategic level for the participants of the team that will develop the strategy (no more than seven people, you must include a decision maker and a facilitator.
Remember that there are strategic levels. Regularly the strategies are made in cascade, this means that the strategic decisions have to start from the highest part of the organization’s ranks. Already defined corporate strategy you can begin to permeate this downwards (business units, departments, individuals, etc.).
The ideal is to start at the corporate level (regardless if your organization is 1 or 10.000 people), this might be the directors, stakeholders, partners or owners of the organization. If you belong to a department or business unit, you will have to align yourself to the current strategy (later we will see what to do if there is no corporate strategy and you are urged to implement a strategy at a lower level).
So depending on the level where you will implement the strategy, the people, who will conform your team, must be.
DAY 1 — Generates information
The purpose of this day is for the team to understand the methodology and practice it. The team will generate information for decision-making. At the end of the day the participants will have sketched their current strategy.
Agenda
- 09:00 — 09:30 Presentation of the entire team and the Facilitator
- 09:30 — 10:30 Introduction to the Methodology
- 10:30 — 13:00 PEST Analysis
- 13:00 — 14:00 Case Study Practice
- 14:00 — 15:00 Lunch
- 15:00 — 16:30 Describe your Current Strategy
Workshop and activities
Step #1. Icebreaker, I recommend you “Whatchamadrawits”, is a fast and fun game where you can make small sketches.
Step #2. To not make deliberate decisions in your strategy and not rely on hunches, perform a PEST analysis.
The PEST or PESTL is an analysis of the industry in which your organization is located. PEST is an acronym for Political, Economic, Social and Technological, you can add a L for legal. This analysis will help you to have more data, market knowledge and trends in your industry.
You can also make an analysis of the competition; their cost structures, their business models and which are the value propositions offered.
This exercise can be done between 2-4 hours and it is very important to do it with the whole team for your greater understanding.
Step #3. Make an introduction on the Playing to Win Methodology. Explain carefully the five strategic questions and how they will answer.
Step #4. Set a Study Case, have them practice by making two strategies of two different organizations (previously prepare the study case), one based on differentiation and the other based on low cost.
Step #5. Get them to describe the organization’s current strategy. Use the five strategic questions.
DAY 2 — Generation of strategic possibilities
The purpose of this day is to define your strategic challenge and generate different strategic possibilities.
Agenda
- 09:00 — 09:30 Outline of the current Business Model
- 09:30 — 10:30 PEST Review, Current Strategy and Competitive Rivalry
- 13:00 — 11:00 Opportunity Heat Map
- 11:00 — 11:30 Strategic Problem
- 11:30 — 12:00 “How Might We”
- 12:00 — 12:45 Develop Strategic Possibility #1
- 12:45 — 13:00 Art Museum
- 13:00 — 14:00 Strategic Cascade
- 14:00 — 15:00 Lunch
- 15:00 — 16:30 Develop Strategic Possibility #2
Workshop and activities
Step #1. Sketch your current business model, here I recommend you use the Business Model Canvas. In teams make a sketch of your current business model (no more than 30 minutes).
Step #2. Review your current strategy (sketched in the previous session)
Step #3. Present the results of the PEST analysis, obtained in the previous session, to the team.
Step #4. Present the analysis of the competitive rivalry, obtained in the previous session, to the team
Step #5. Opportunity Heat Map. In each of the four steps above, ask the entire team to join in the parties where they envision a greater opportunity. The votes are unlimited. You can see that there will be areas of opportunity in your own model (business model canvas and current strategy) as well as in the industry (PEST and competitive rivalry).
Step #6. The facilitator has to review where the team has issued the most votes, they can be focused on any of the nine blocks of the Business Model Canvas, your current strategy, competitive rivalry or in the industry.
Step #7. Join the entire team and recap the parts in which the team focused out loud.
Step #8. Drafting of the Strategic Problem. Each team member draws up the strategic problem that he considers the most important in a sticky note and sticks it on the wall. (You can combine two problems in a single sentence and make it a little more general)
Example: “The industry is changing due to new technological business models, there are few competitors in this new scenario but very strong”.
Step #10. Ask “How Might We” (HMW). Instead of sticking a lot into the problem, quickly try to generate interesting questions to start looking for solutions. Ask team members to generate an unlimited number of HMW´s questions about the strategic problem chosen. If you have never used this tool (HMW) I recommend you see this little tutorial from IDEO.
Step #11. Voting on questions HMW´s. Give to the team members two votes, they will share them in the most interesting HMW´s. The decision maker will review the votes and choose two HMW´s. The more different these HMWs are, the better. Example:
- “HMW immediately outstrip the technology used by the competition?”
- “HMW beat a new technology by using a new business model?”
The interesting thing here is that we will try to generate two different strategic scenarios to solve the same strategic problem.
Step # 12. Generate Strategic Possibilities. Ask to the decision-maker to choose the HMW that he considers as a better strategic possibility generator. Based on this HMW and to ask the team to individually brainstorm the strategic questions: Where will we play? and How will we win?
Step #13. Art Museum. Ask each person on the team to stick their strategic idea on the wall (I will refer to the answers of the questions as an strategic idea: where we will play and how we will win). Give them 50 minutes to review each of the ideas generated. Share a vote and ask them to choose the strategic idea that most convinces them. The decision-maker has two votes and has two choices. The first is to put the two votes in the strategic possibility that most persuades him or put a vote in two ideas and quickly make a hybrid of two strategic ideas.
Step #14. Generate the complete cascades. Already having chosen a strategic possibility complete the strategic cascade with the other three questions (remember to use the correct order of the cascade).
- What is our winning aspiration? (objective of the strategy)
- What competences do we need?
- What management systems do we need?
Step #15. Repeat steps #12 and #13, but with the questions from step #14.
Step #16. Repeat steps #12, #13, #14 and #15, but for the second HMW (remember that we had chosen two).
By the end of this moment you must have two totally different cascades, having answered each one with the five strategic questions.
DAY 3 — Identify the Hypothesis and Experiment.
The purpose of this day is to identify the most important hypothesis of your two strategic cascades and design a test for each one of them. I mean, what has to be true for your strategy to be successful.
Agenda
- 09:00–09:45 Strategic Cascades Review
- 09:45–10:00 Strategic Cascades Correction
- 10:00–11:30 Strategic Sprint Questions
- 11:30–12:00 Vote and Choice of Hypothesis
- 12:00–13:30 Design of Test Plan for Strategic Possibility #1
- 13:30–14:30 Lunch
- 14:30–16:00 Design of Test Plan for Strategic Possibility #2
Workshop and activities
Step #1. Strategic Sprint Questions. Go back and check again the two strategic cascades you made. Choose the assumptions that have to be true so that your strategy is the winner of each cascades. That is, the hypothesis that worry you the most (do this exercise separately for each of the two cascades)
I recommend that every member of the team chooses three scenarios and turns them into questions, following the format Can we….?
Example:
- Can we be able to create a new technology alone?
- Can we be able to lower our costs in order to compete in a new segment?
- Can we be able to overcome the barriers of entry of “x” industry?
- Can we be able to give customers a value that really helps solve their problems?
- Can we be able to adapt “x” or “y” capacity to our processes?
In the Playing to Win methodology, this process is called reverse engineering. This means that it is a process of asking and testing what has to be true for our strategy to be successful.
Keep in mind certain factors to create your hypothesis:
- The segments and the structure of the industry (PEST analysis will help you).
- The value that customers and channels really want and what they really give value (remember that everything that does not generate value is waste).
- The capabilities and cost structures
- The competition
Step #2. Make this process for each strategic cascade you made
Step #3. Hypothesis voting. Give to each member three votes and have them split their votes among the three questions (hypothesis) that concern them the most. Ask them to order them from greater to lesser importance. In the end the decision maker will put his vows and decide which are the 3 or 4 hypotheses to test.
Step #4. Design the test for these scenarios. When making the design of the experiments take into consideration that unlike the Design Sprint, we do the test in one day. Here it is different and the test time should match the type of experiment and the hypotheses to test
Why can’t we do it on a day like the Design Sprint?In a Design Sprint we focus on solving a specific problem, we go from the general to the particular. We were practically validating just one idea. Here we are validating a complete strategy, the work is much more extensive. We have to validate not only features or a product, we need more evidence that shows us that the strategic route will be a winner.
How much is the estimated time for testing?As I said earlier this depends on the degree of depth with which you want to perform a test. This degree of depth depends on the time and the economic resources that you have available. Remember that a test is a proof of life for your strategy.
TIPS for testing
- Start with the strategic cascade you consider more attractive.
- Use “if… then” logic”, example: if we achieve x number of prospects then we could consider this strategic possibility.
- Do the tests simultaneously (for the hypothesis of the same strategic cascade), so save time.
- If you can get the most skeptical people to do the test, it will be much better, if they are convinced with the results it will be easier to convince others.
- Create a test plan (in our next post we will show you how to do one).
- Start testing the hypothesis that concerns you the most, if it does not pass the test, it won’t be necessary to test the next.
- In my experience we try to run these experiments in 5 to 15 days tops.
Day 4 — Make decisions
The purpose of this day is to make decisions about what we are going to do. With what strategic route we will stay, what hypothesis we could verify. It is a day of presentation of results, agreements and decision-making.
We can see that between day 3 and 4 can pass up to 15 days (or more) in which we run our hypothesis testing
Agenda
- 09:00 — 09:00 Strategic Cascades and Test Plan Recap
- 09:30 — 10:15 Presentation and Discussion of Results
- 10:15 — 11:30 Strategic Choice
- 11:30 — 12:30 Next-Step Discussion
Workshop and activities
Step #1. Make a good presentation of results. If you can send the results before the presentation is a good option. So you save a little time and focus on the doubts to solve.
Step #2. Strategy Selection. There are three scenarios here
- The whole group agrees with a strategy. There is no problem here and it will be much easier to continue with the next steps.
- That in the testing similar (good) results have been observed for two or more strategic possibilities. Here you can do a number of things: a) to submit to a democratic vote and that the decision-maker, based on that vote, will decide. b). Combine cascades.
- The test has not shown good results for any of the cascades. Here you will have to return to day number two and start generating new strategic possibilities.
Step #3. Redefine the chosen cascades. Maybe the team wants to improve some of the chosen cascade, this is the time to do it.
Step #4. Make a communication plan for the new strategy. You have to do it for the whole organization.
Step #5. Get ready to build new skills and management systems. Check that new configuration of skills you need to support the new strategy.
- Green: You don’t need to do anything, you already have these skills.
- Yellow: You may have these skills in the organization moderately well or are easily adopted.
- Red: You don’t have these capabilities.
Having classified your needs you can generate action plans with managers.
Step #6. Prepare other cascades. If you started doing a corporate cascade, now you will have to permeate it to different departments or business units. This is called Strategic Alignment.
Step #7. Keep walking. Roger L. Martin advises us that we always have to be open to change if this strategy is not working. So, if the results are not expected, there are new challenges or new opportunities arising; you can make a strategic change or or we could call a pivot, you change the route, but not the goal.
I hope this long article is helpful in making a Strategy Design Sprint. Remember that the strategy is always urgent in an organization. It helps you to have a shared vision, clear and achievable goals and organizational cohesion.
Sorry for my English, I will try to get better next time.
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