Change - Strategic Facilitation

by Tony Mann

Key driver analysis

This should be used regularly in order to ensure that the organisation is monitoring the factors for change and to prevent the organisation becoming complacent.

  • Collect data about the external environment from as many sources as possible. Avoid simply examining the ‘close-in’ environment and look as widely as possible at the changes going on everywhere.
  • Sort the data into ‘themes’ that will become the key drivers (KDs), together with the underpinning influences (chart 1).
  • Plot the KDs on a likelihood/impact four-box model and identify the most significant KDs affecting the organisation’s future.
  • Write a description of each KD that can be used to explain the KD to anyone else in the organisation (chart 2):
  • Either – if the strategic goals are set and relatively immovable (in other words, constrained by legislation or charter) then go to – core capabilities and identify the core capabilities needed by the organisation to respond to the key drivers.
  • Or – if the capabilities of the organisation are defined and set (in other words: because of legal constraints, legislation, boundaries) then go to chart 4 – strategic goals. This will either be re-emphasising the existing strategic goals (BAU – business as usual) or be new transformational goals (TTB – transforming the business). Write a strate gic focus statement, which can be used to explain the business to anyone in the organisation.
  • Identify the core values that will underpin the organisation and write an ethos description that can explain the values to staff, customers and suppliers. Do not forget to identify and integrate capabilities that will be needed to support the core values.

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Stage 1: The process of identifying key drivers

Fortunately, there are a number of organisations that monitor factors and track them. They provide a method by which organisations can both identify potential drivers and even monitor these for themselves (using these services). Whichever way an organisation does it, the important thing is to be watching and assessing these factors and identifying drivers that will have an impact on the business.

Collecting the influences – 1A

The initial process involves collecting all the influences that the organisation thinks might have a bearing on its future. It is important at this stage not to be limiting and restricted, but to scour the environment as widely as possible. An influence, in this context, is anything that might affect the way the organisation goes about achieving its strategic intent. There is no size to an influence; it is the fact that it exists which is important.

This process can be done in a workshop or, better yet, as a system of activity over a number of weeks. It should involve a cross-section of the organisation. Use a simple form, such as the one below. Individuals simply insert the influence and identify the source of the information (for example, Times Newspaper 7 April). Somebody should be made responsible for collecting the data from people.

Influences

Source

Veracity
1,2,3,4

KD Group

 

 

 

 

 

 

 

 

 

 

 

 

The source matters because in an age of mass information (the internet era), it is important to assess the validity and veracity of the information.

The job of the person collecting the data is to code the data. A veracity of

  • Level 1 means it is valid and from a very reliable source
  • Level 2 means that it is from a credible source
  • Level 3 means the source is potentially suitable
  • Level 4 means the source is unproven.

Collecting the data and identifying key drivers – 1B

The process of identifying key drivers can be done by the person collecting the information, but it is better done in a workshop, facilitated by a change agent. The purpose of this event is to sort the information, collate it and identify the key drivers. To do this, the change agent should print all the influences on large labels/post-its that can be moved around and sorted. Each influence should show the veracity level on it (see example below).

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The workshop should contain a wide cross-section of people, in order to increase the level of understanding in the organisation. Their selection should be based on their ability to understand the data and to assimilate its meaning and significance. The purpose of the workshop is to

  • Sort the influences and identify key drivers (KD)
  • Determine both the impact and the likelihood of each KD.

The change agent’s role is to help the organisation manage the data and make sense of it. Depending on the number of people and the number of influences (which could easily reach 200-300), the change agent might split the workshop attendees into sub-groups and divide the data into piles for them to sort and allocate. Invariably, this will create a visual picture of the data at first, as groups sort and collate the influences.

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The change agent needs to ensure that there is a great deal of checking, challenging and assessing as the data is compiled.

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Measuring the force of the key drivers – 1C

Once the information has been sorted and the KDs have been identified, it is time to measure the significance of data. There are two key parameters for this: impact and likelihood. The impact is what it says: the potential impact on the organisation’s strategic focus and its capabilities. The likelihood is, again, what it says: the likelihood of this KD becoming a reality, a developing force.

So, for instance, some years ago now the ‘Internet’ would have been seen as a KD that was growing in both likelihood and impact. The organisations that spotted this early and took action were able to gain a strong competitive edge. Many sectors disregarded this KD. One of these was the music industry, which failed fully to recognise this until about three years ago. Now it is all but too late to combat this KD.

So the change agent initiates a discussion and debate about the impact and likelihood of each KD and offers a four-box model on which to place each KD (see below). This can also be done in a spreadsheet.

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Note

It may be prudent to get a wider audience to score the KDs. To do this, the organisation can use a simple form and send it out to people or use a more sophisticated program that allows an online questionnaire to be published and the scores to be complied from the audience.

In this way, a broader perspective can be gained, which is all part of the participative nature of change and the development of the understanding that will counter the resistance to change.

Later, the person responsible for collecting the key driver information creates a chart showing the relationship between the influences and the key drivers.

Chart 1 Impact and likelihood of KDs

KD Group

Key Driver
(Enter a short description of the KD)

Impact

Likelihood

Influences

 

KD1

The internet as a means of transacting business

4.2

4.5

  • Internet access
  • Broadband
  • Trust in internet
  • Fraud on internet

 

KD2

 

 

 

 

This table or chart is the primary source of information about the external environment and should be maintained as a key strategy document, updated and reviewed by the directors/senior management team (SMT).

Once the organisation has assembled and created the KDs and scored them, the change agent invites the organisation to set the KDs in a context.

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This involves writing a ‘story’ or a text weaving the KDs together and setting a context for the next stage. This text or story is what everyone else will hear and see in order to help them understand the factors driving the business. This story can be written down, recorded on video or even, possibly, depicted in the form of a mural.

Example

A mutual building society wanted to express the way that it wanted staff to act and behave with customers in a deliberate attempt to distinguish the organisation from ‘banks’.

Following a series of workshops in which they explored and developed the unique differences between building societies and shareholder banks, they developed a series of ‘cartoon’ characters that epitomised the new way of working for each staff role/type (for example, customer-facing staff). These characters had ‘bubbles’ with their thought patterns. These were prominently displayed and talked about in team meetings as a way of exploring the behaviours that were needed.

In parallel, the managers worked with staff groups to explore what changes would be needed to the systems and processes in order to make the desired behaviours ‘stick’ (for example, a different type of remuneration, one NOT based on sales, but on service).

Stage 2: Using the KD analysis to examine the strategic focus

The next stage is to examine the strategic scope/focus in the light of the KD analysis. In other words, the KDs provide the external stimulus for the internal strategic planning. Without this external pressure, the organisation could become moribund, lethargic and unresponsive. The consequence of that would be an organisation that loses touch with reality and becomes redundant and ineffective. The change agent therefore has to take the SMT through a systematic review of each of the crucial dimensions of the Process Iceberg® planning model (see here): strategic focus and goals, capabilities and values. Segment A, below, examines the strategic focus and goals.

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The KD context sets the scene for the review and audit of the existing strategy and capabilities of the organisation. The change agent therefore encourages the organisation to use the KDs as a stimulus to re-evaluate the strategic focus. This stage involves examining the strategic focus in the light of the KDs and the KD context.

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It is crucial to subject the strategic focus to this stringent review. As suggested earlier, the music industry has only recently begun to accept the significance of the Internet as a KD although for a long time music pundits have been saying that the industry has been in denial.

The growing economies of the developing countries, such as India and China, constitute one of the more recent KDs. Manufacturing companies are beginning to see both the risk and the potential of these economies. They can provide great opportunities: a base for production and huge markets. Conversely, their effect might be to take away jobs and threaten the economic stability of western countries.

So the change agent encourages the SMT to put their strategy under the spotlight. This is the first of a series of activities, which will eventually develop a re-configured Economics versus Values Process Iceberg®.

Auditing the strategic focus in the light of the KDs – 2A

If the organisation has a strategic focus, the change agent invites the SMT to take each of the KDs in turn and put them against the strategic focus of the organisation. If the KD will have any effect on the strategy, then this is noted (on Post-Its™) against the KD. In the example below, the Impact is assessed at 3 and the Likelihood at 3.6 out of 5.

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Activity

If there are a large number of KDs, then people will be divided into sub-groups, each reviewing a number of KDs. Each sub-group then presents its summary of the effect of their KDs on the strategy, noting whether there are any critical KDs that will derail the strategic focus.

Ultimately, the purpose of the activity is to confirm the strategic focus or to identify that it needs re-defining. If this is the first time that the SMT has done this exercise, then there may be some real shocks and the change agent will have to help the team to accept that their (beloved) strategy is under threat.

Examples

Take, for example, the situation of the charity which has begun to realise that medication is now capable of controlling the medical condition for which the charity was formed many years before. The KDs which will have revealed this most starkly would be

  • Local Authorities (because of Government policy) wanting people to be cared for in the community (not in residential homes)
  • Cost of care in homes rising considerably
  • Clients/sufferers can self-medicate without a doctor’s or nurse’s intervention.

In addition the charity may have other KDs, such people moving away from rural areas (into the cities) making it difficult to recruit and keep staff on a campus. All this may make the charity realise that its strategic focus is being eroded and is in real danger of being outdated.

Or take the example of a religious charity whose original mission was to distribute religious material to countries that forbade such material to the population. The KDs affecting this organisation might include

  • Internet access to religious material
  • Religious channels on satellite TV
  • Freer borders, allowing easier access to books and materials.

The charity would need to review its strategic purpose and see if it still had a remit.

Another example might be a company offering quick turnaround of photos. The strategic focus of such a business would have been in real jeopardy from the digital revolution and the demise of so many of these businesses stands testament to the reality that KDs should have been addressed.

If the exercise is being done on a regular basis, there will probably be minor challenges to the strategy, simply requiring an amendment to one or more of the strategic goals. But to fail to carry out this action could have serious consequences.

Defining the strategic scope/focus of the organisation – 2B

The change agent helps the SMT to review the strategic focus and align it with the KDs. The change agent may have to confront the SMT with the reality that the strategic focus is no longer valid or needs serious attention. If not, denial and groupthink may creep in, whereby everyone colludes in pretending that nothing is wrong.

Once the SMT has devised a strategic focus, this should be made into a written statement, perhaps recorded on video or even made into a story.

Activity 1

Identify the criteria for evaluating the goals. The criteria are the strict measurements that determine whether a goal is appropriate (for example, market share, ROI, revenue generation). Get the group to brain dump the potential criteria onto Post-Its™ and then invite the group to score each criterion, using dots. Select the top-scoring criteria and put them at the top of Chart 3 (below).

Activity 2

Invite the group to think about the strategic focus and to create goals that will bring the focus into reality. These goals will be the activities on which the organisation will focus their efforts. Brain dump the possible goals onto Post-Its. At this stage it is not necessary to evaluate or censor them; this will be done at the next stage. However, it is important that the goals are well articulated (not just one or two words on a Post-It). Next, cluster the goals into themes or categories (for example, international, national, local, sector). Now place them in chart 2 (below). At this point do not worry about objectives – this will come later.

Chart 2 Goals and strategic focus

Category (ID)

STRATEGIC GOALS

 

 

 

 

 

 

 

 

 

Activity 3

Now position the goals in the left-hand column of chart 3. Score the goals against the criteria, using the most appropriate scoring system (for example, yes/no, scoring out of 5) and determine the goals that have the biggest total. Also add up the scores for each of the criteria; see which criteria have the biggest impact, and average them. This will give an indication as to the most significant criteria against which the organisation will be assessed.

Highlight the goals that have scored best.

Chart 3 Measuring the strategic goals against the criteria

Goal
No

Goal

Criteria

Total

Av

SD*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

*SD = standard deviation measure

Activity 4

Now take the most important goals and create objectives for each one (see chart 4). This should be done for the different contexts (for example, departments, projects, functions). This activity can be carried out in separate workshops by the manager/leader of each of the different parts of the organisation.

Chart 4 Goals and objectives

Date:.......... Dept/Function:....................

Category (ID)

Strategic goals

 Objectives

 

 

 

 

 

 

 

 

Stage 3: Core capabilities – segment B analysis

Segment B analysis is designed to audit the internal capabilities against the external KDs and assess whether they are valid and appropriate. The object here is to refine/define the organisation’s capabilities.

If the KDs indicate that a major review of the capabilities is required, then the organisation should undertake activity 1a. If an analysis of the KDs suggests that the rate of change is significant, then the organisation, with the support of the change agent, should undertake activity 1b. The purpose is to affirm/define the core capabilities that you think the organisation will need in the future.

Activity 1a

The group reviews the core capabilities (in the Process Iceberg®); in other words the

  • Structure of the organisation
  • High-level processes.

At this stage do not worry about the systems, procedures or processes. Get the group to articulate the capabilities and write them on separate flip-chart sheets. If there are a large number of KDs, divide the room into sub-groups and get each group to audit the capabilities against a number of KDs. The groups should write comments on the flip-chart paper reflecting the impact of each KD. Each sub-group then presents its summary of the effect of the KDs on the capabilities and whether there are any

  • Critical KDs that will derail the capabilities
  • Capabilities that will be adversely affected by a KD.

Activity 1b

The group takes each of the KDs and extrapolates the

  • Structure that will be needed to respond to the KD
  • High-level processes that need to be in place to respond to the KD.
Examples

Think back to the music industry and the major KD – the internet. Any music label would need to have a structure that reflected

  • Online sales (downloads)
  • Concerts/tours by artists
  • PR and marketing.

They would need the following high-level processes: production and digitising of music into an online format.

The change agent should create several sets of cards with a KD on each one and encourage the group to articulate the capabilities forced on the organisation by the KDs and write them up on flip-chart paper, putting the appropriate KD on the paper as reference.

The group should then create a ‘capability context’ that defines the capabilities. This involves writing a story or a text weaving the KDs together and describing the context. This text or story is what everyone else will hear and see in order to help them understand the capabilities driving the business. This context can be written down, on video, in a process chart, in a Process Iceberg® or even, possibly, depicted in the form of a mural.

Activity 2 – Measuring the importance of each capability

Cluster the capabilities into common themes and give each cluster a heading/title (and a three-letter and number ID).

Invite the group to go round individually (all), in sub-groups (groups), or all together (all to one) and score each capability in the light of the impact the KDs have had. In the top left-hand corner of a capability card, put its ‘importance’ (out of 5), then put the ‘level required’ (out of 5) of this capability in the bottom right-hand corners. Then transfer the capability information to chart 5.

Chart 5 Core capabilities

Capability ID

Core capability

Importance

Levelrequired

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Activity 3 – Identifying the action required

Identify the capability-related action for each capability that needs to be done to make it become a reality. Invite the group to go round individually (all), in sub-groups (groups), or all together (all to one) and brain dump the actions required to make each capability robust and fit for purpose (in the light of the KDs). Enter this data into Chart 6.

Chart 6 Identifying capability-related actions

Capability ID

Capability

Capability-related actions

 

 

 

 

 

 

 

 

 

Stage 4 – Establishing the ethos

The values or ethos of an organisation stand in contrast to the goals and the strategic focus – see the Process Iceberg® model. The ethos needs to be explored and validated separately before it is subjected to analysis, because it is so critical to the health and well-being of an organisation. Arguably, Railtrack (in the UK) failed to take enough notice of safety and as a consequence there were a number of serious accidents. Historically, British Airways has always made safety a priority because passengers put their utmost trust in an airline when travelling. The members of the Houses of Parliament, especially MPs, lost the respect of the nation by abusing their expenses.

Identify and define the organisation’s values – 4A

Consequently, it is crucial to identify and define the values that will underpin the activities of the organisation and drive its behaviour.

Activity 1

The group go round individually (all), in sub-groups (groups), or all together (all to one) and explore what they think are the current values of the organisation. They should then write them on yellow Post-Its™

They then put a large ‘E’ in the top right-hand corner of each Post-It™ if it is an existing value; put the importance of this value in the top left-hand corner (out of 5) and put the degree to which this needs to be in place (out of 5) in the bottom right-hand corner.

Activity 2

The group go round individually (all), in sub-groups (groups), or all together (all to one) and discuss what they think the values of the organisation will need to be in the future. They write these on blue Post-Its™.

They put a large ‘F’ in the top right-hand corner of each Post-It™ if it is a future value; they put the importance of this value in the top left-hand corner (out of 5) and put the degree to which it needs to be in place (out of 5) in the bottom right-hand corner. The strategic facilitator may need to use an additional tool – personal construct psychology, the values chain – to elicit the values and the behaviours and features. The values are entered in chart 7 below.

Chart 7 Core values

CV number

Value

Need

Impact

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking the viability of the values in the face of the KDs – 4B

However, no matter how laudable the values may be in isolation, they need to be tested against the KDs to ensure that they are both realistic and appropriate. Organisations in both the private and (increasingly) the public sector are finding it impossible to maintain a final salary pension in the face of people living longer. Organisations cannot necessarily promise people a ‘career’ when the business model may need to change because of economic conditions. To simply pretend that an organisation lives by a particular value is subject to ridicule and scepticism by the workforce if it is unsustainable.

Take the values from chart 7 and put them in chart 8. Invite the group to go round individually (all), in sub-groups (groups), or all together (all to one) and tick ( ✓) or put a ( SF_37 ) against the KDs that make the value viable or not viable. Alternatively, score the values against the key drivers to reflect the degree to which they are viable. The scoring represents how realistic the value is to maintain/live out.

Chart 8 Auditing the values against the key drivers

Value No

Value

Key drivers

Total

Av

SD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

Total up (horizontally) the number of ( ✓) and ( SF_37 ) or add up the scores of the values. This will give an indication as to whether the value is sustainable in the face of the KDs. Total up (vertically) the score/number of times a KD affects the values and assess the significance of this KD.