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Preparing for strategic business decisions an advanced art. Crafted around a set of facts, about markets and own capabilities. Characterized by a clear choice, between available options. Sets a new direction, viewed as better than the current. Leading to implementation actions, moving a business from current to state.
The scope and purpose of this template
In principle it is simple. A clear analysis followed by a decision. But likelihood of reaching a decision is low when articulating just one alternative. This template helps you to articulate four strategy decision options. Taking both impact and cost of implementation into consideration. Each with a brief summary of the pros and cons for each strategic option. A model designed to reach a decision for each topic penetrated and presented.
This template enable as a one-page strategic decision summary. Articulating the key strategic question. And 4 options with 2-3 pros and cons per alternative. Covering the grounds of the best and status quo options at the two extreme ends. Designed around the idea the real choice is between the two middle options. A second best and a least effort option Both representing a realistic path when combining both strategy impact and execution effort aspects. During a strategy review cycle you are likely to end up with a mix of second best, least effort and status quo decisions.
The Key Strategic Question
A large share of the best decision come from working with the right question. A task about identifying the key strategic question where you plan to make a choice. Early in the cycle you can work with more than one hypothesis. But as you approach a decision point the question need to be clear.
The four options you define are possible choices tied to the key strategic question.
Option A – Best Impact
The most logical ask to pave the road for a strategic decision is to ask for the best possible options. Answering questions like
- Where is the highest market growth?
- Who are the best customers?
- Where can you expect the best prices and margins?
- Which offerings are most attractive?
Implementing this strategic alternative is the most resource intensive. And to balance the potential you need to articulate highlights from the cost side of the equation:
- Which competence do we need?
- Which new offerings are in play?
- What are the risks associated with this strategy?
- What is the ballpark level of investments required?
Use this option to articulate the edge of the possible in the market. If removing your own financial and capability constraints.
Option B – Second Best
The second option address the goal to get as close to the best alternative as possible. with major reductions in required efforts. Working with questions like:
- What challenging aspects of the best option have high cost in relation to the created customer value?
- Which elements with high risk can we take out? Covering both external market development risks as well as internal execution risks.
- How can we simplify strategy implementation to match capital and execution capabilitie?
- Establishing the second best alternative as a platform for moving to the best alternative later.
Use this option to articulate a large leap without betting the farm. Make this option attractive to Executive decision makers leaning towards the best strategy.
Option C – Least Effort
Opportunity constraints can create a situation where it is more relevant how far you can move. An implementation driven option where your goal is to improve as much as you can with as little resources as possible. Penetrating questions like:
- Which amount of capital and capabilities do we have access to when addressing this strategic question?
- Which changes represent the bare minimum we need to to improve from today’s strategy?
- Which customer values are cheap to realize?
- Which initiatives give the largest internal improvements for the least efforts?
The least effort alternative is likely to have a large gap to the second best alternative as seen from an impact perspective. But it is an attractive option for an Executive decision maker with wither scarce resources. Or many urgent competing priorities to address.
Option D – Status Quo
A realistic and common choice is to not do anything at all. The result of the analysis can result in a conclusion it is best to stick to the current strategy. But a no decision is also a decision. And by articulating the no decision as an option you pave the road for making all decisions active decisions.
In scenarios where you see a decision between A, B or C is best, your work on articulating D might be as important. Penetrating questions as:
- What are the major pain points associated with maintaining status quo?
- How will the cost of choosing A, B or C later change if we maintain status quo now?
- Are there any benefits of maintaining status quo short term?
- What triggered the strategic review in the first place?
- Have we gained insights during the process making our current strategy a better than expected option.
Visualizing this writing template
It is counter intuitive to present 4 options, for a choice between 2 alternatives to reach 1 decision. But strategic decisions are about creating executive comfort. Created at the intersection about both direction/impact and required implementation efforts.
A 4-way cross road create comfort in decision maker’s minds. Putting the spotlight on viewing status quo as a decision. Avoiding decision black mail situations where one perfect option that is expensive to realize. A reality generating a no decision and maintaining status quo as default. With focus on reaching a choice between two alternatives, both better than your current strategy