Strategic Roots:
Why Goal Trees Fall Short and Processes Matter
It’s time for the ‘Strategic Tools’ column.
Pyramidal hierarchical structures are everywhere.
Animals and plants are classified in a hierarchical pyramid: from kingdom, phylum, class, order, family, genus, to species.
Organizational structures most often look like pyramids.
When you use a mind map to delve into the root cause of a problem, you employ the hierarchical approach.
The method of reasoning "from the general to the specific" appears natural to our minds.
But when it comes to strategic goals, the tool misfires. There is another approach that can be a better solution.
Fresh sandwiches and business strategy
In 2010, I was the CEO of a chain of small snack bars. Customers loved us for the chance to grab a quick and cheap bite.
We faced a strategic challenge. Our tiny bars didn’t have enough storage space. Moreover, if a sandwich spent a whole day in a fridge, it became stale.
No one likes stale sandwiches.
On the other hand, delivering fresh food to the bars several times per day was too expensive.
Customers wanted fresh sandwiches 24/7. We wanted to capitalize on it.
We needed to find a compromise between the two conflicting requirements. And we did it – on paper.
We formed a project team of logistics, IT, finance, and marketing representatives.
We cascaded the goal into lower-tier objectives. The objectives were clear, relevant, time-bound, and measurable. Everything was done by the textbook.
The team worked hard. But every time we thought the problem was solved, we discovered some small but significant nuances we had overlooked or underestimated.
A system that worked only 90% of the time wasn’t much better than no system at all.
We dug deeper and found the root cause of our problems.
Check out my new book, Red and Yellow Strategies: Flip Your Strategic Thinking and Overcome Short-termism, here.
Goals are vertical. Processes are horizontal
Imagine you’d like to lose excess weight. Your target weight, measured in kilos or pounds, is your goal.
But you don’t achieve the goal by dreaming about it, thinking of it, or even praying for it.
You do it by creating some new routines and changing the others.
You need to exercise regularly. You need to change your eating habits.
These routines, or business processes, often consist of small details not mentioned in the goal.
But when you lose weight, you, most often, do it alone.
Business tasks are different:
1. You need to synchronize and coordinate the work of many people.
2. Business processes are more complex and intricate.
Goals are vertical. If you look at a typical goal tree, you won't see many horizontal links between the goals.
Money doesn't grow on goal trees. Look for it in business processes.
Business processes are horizontal. They include many brief interactions among people within a department or between different departments.
When you set a strategic goal and cascade it into lower-tier objectives, you don't see those small nuances.
But the devil, as always, is in the details.
Pro tips
Setting and cascading strategic goals is essential. But this is not enough.
1. Make a list of all the processes, or Value Waves, that affect your strategy.
2. Rank them according to their impact on the goals.
3. Dive into the processes and visualize them using the Business Process Mapping technique or any other tool.
4. Find critical process vulnerabilities, the points where errors and failures have the maximum impact on goal achievement.
5. Build a list of changes you need to make to achieve your goals.
6. Make a list of new processes you need to create from scratch to reach your goals.
7. Don't forget the processes you should ditch or outsource to free up resources for more critical tasks.
If you need help with setting your goals and developing your Value Waves, do not hesitate to contact me.
I will take a one-week break to rest and recharge, so see you on August 13! In the meantime, you can:
1. Subscribe to my second newsletter, Strategy in Three Minutes.
2. Read old articles.
3. Buy and read my book Red and Yellow Strategies: Flip Your Strategic Thinking and Overcome Short-termism.
Read also: A $3 Billion Strategic Mistake. The True Story of a Notorious Failure
Like the story? Restack it. Follow me on Substack notes – I post daily.
Visit my website.
I often say when looking at a diagram, the ‘boxes’ aren’t the most important parts, but the lines between them. Interactions between goals, process steps, whatever, are key and they shouldn’t be minimized, but explored to their full depth.
Thanks for the article Svyatoslav - the importance of connections (and flows of information) is often under-appreciated. Considering organisations as adaptive systems rather than defined structures can help considerably!