On Strategy

One thing we constantly refer to here, and will continue to do so, is ensuring that how you use Outsourcing supports your overall organisational strategy. Here we’ll look at the application of that strategy to cascade clearly to drivers, outcomes and measures.

There are many, many scholarly articles, books and blogs on strategy out there and we feel that, whilst it is important, we didn’t want to be the ones to tell you how to develop your strategy. One of my personal favourites is Simon Wardley’s work with mapping and using the OODA loop to master strategy.

What is important is understanding how the corporate vision, and ultimately the supporting strategy, is distilled into outcomes and measures. It is important because this will help you not only better understand the use of outsourcing in support of strategy but knowing what the key measures for success are.

Previously (and elsewhere) I have written about Hoshin Kanri and the 7 step planning cycle. Hoshin Kanri is a policy management process that attempts to link the corporate strategic direction with the measures, goals and actions of those doing the work.  Or more simply, get everyone pointed in the same direction.

The 7 steps are:

1. Establish organisational vision
2. Develop strategic plan (3-5 year)
3. Develop annual objectives
4. Deploy objectives
5. Implement
6. Review progress regularly
7. Conduct an annual review

These steps are good, and there are some very detailed templates and matrices out there if you need them, but I found it easier to look at it from the simplified approach of the idea of the flow from vision through to measurable actions. Mapping the Vision to Objectives (these essentially being Business Drivers) which set the Goals (being the Outcomes you wish to achieve) that drive Actions (that need to be measurable).

Another way to look at it is, in order to attain the organisational Vision there will be a number of strategic (business) Drivers needed to attain that goal. These generally distill down into one of three key areas:

• Optimise Service Delivery
• Improve Customer Service
• Enhance Employee Experience

For each of these Drivers there must be one or more Goals with specific Outcomes that will clearly show how the Objectives will be met. These in turn will have one or more Measures to show what “good” looks like.

This is outlined in the diagram below.

What the diagram also shows that there is clear ownership of Vision by senior executives and together they work with middle management to create the Objectives (and define the Business Drivers) and finally middle management take those Objectives and work with their teams to develop specific measurable Actions; based on the agreed Goals and Outcomes that the teams execute on.

You might be saying “That’s great, but how does that support outsourcing?”. Understanding the business drivers will help identify what tools and techniques you can use to outsource. More importantly, you will know what good looks as far as specific, key measures like and these can flow, not only into outsourcing contracts, but into governance constructs and even tool selection needed for your organisation.

A lot of the time, this doesn’t happen. I’ve worked in many businesses where no one knew what the corporate vision was, let alone there being clearly communicated objectives, goals and measures.

The final piece of the puzzle is measuring these actions regularly and adjusting the objectives, goals and actions as necessarily.

So to summarise:

1. Develop strategic objectives and goals based on vision.
2. Get consensus of the objectives, goals and actions.
3. Implement what’s been agreed.
4. Measure it constantly (and review those measurements).
5. Adjust accordingly.