If the Vision is your destination, the Strategy is your travel plan.
This plan describes the company’s journey towards its Vision. It must be well articulated, written and understood by all employees and discussed regularly by Management. It must connect the present to the future in a clear and obvious way. The execution of your strategy is supported by the shared Values of the organization and I have written previously on this subject. These values describe how we expect to behave on the journey. Our strategy must address such questions as:
Are our people ready?
Where are the knowledge gaps?
Is our structure appropriate?
Are our measurement systems supportive?
Around 6 to 10 key primary metrics are selected that measure our achievement of key strategic elements. The company executive group is held responsible for achieving the annual strategic objectives and these might typically be:
• Increase Inventory turns by 50%
• Improve in-full, on-time delivery to 98%
• Reduce order to delivery average to 2 days
• Improve external quality to 15 parts per mil
• Employee involvement increased100%
• Profitability – EBIT target
The primary metrics are reported and reviewed monthly on a one page “Traffic Light” report describing how your company is progressing its strategy to achieve its vision. It takes the key indicators of success and assigns a colour:
Green for on-plan, Yellow for alert, and Red for behind target.