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  • Writer's pictureMark Hefner

Climbing the Strategy Maturity Curve

Managing Strategy to Drive Member Satisfaction & Top Tier Cooperative Performance

How can you increase your Cooperative’s capabilities to develop and execute strategies that benefit Your Members?

Whether you are working on Co-op-wide strategy, member loyalty strategy, digital strategy, talent strategy or any other type of strategy, how effectively your people develop and implement strategy has a direct “cause and effect” relationship to your Co-ops performance and long-term success.

There is substantial evidence to support that claim. For example, research conducted for Harvard Business Review shows that 70% of organizations that use a formal, effective, and repeatable strategy management process outperform their peers. My experience working with electric distribution co-ops over the last 12 years is this, Co-ops who have implemented a Strategy Management System have become top tier performers as measured by member loyalty, reliability, managing distributed energy, leveraging digital technologies, reducing carbon footprint, optimizing resource allocation, improving safety, and strengthening employee engagement.

Managing strategy (developing and executing) is an important capability that has a bearing on your Co-op’s success, I doubt few would argue that point. But how good is your Co-op at managing strategy and how can you help your Co-op get better? Over the years I have been asked that question many times and have developed a “strategy management maturity curve” to help my clients assess where they are and identify the things they can do to get better.

Strategy Management Maturity Curve

There is a “cause and effect” relationship between the maturity of your Co-ops strategy management capabilities and sustained high performance of the Co-op. Deeper levels of strategy management capabilities and the resulting improvements in performance come from moving up to higher levels on the strategy management maturity curve.

Below are the four levels of Strategy Management Maturity followed by a description of the full list of capabilities at each level of maturity.

Levels of Maturity Level 1-Learning

• Senior leaders and managers are actively learning about strategy management.

• First attempts to develop and manage strategy have been planned or completed.

• Multiple unintegrated, often competing disciplines are used to plan strategy and strategic initiatives.

• A consistent approach to strategy execution is not in place.

• Linkage of objectives, initiatives, and Co-op budget to strategy is weak.

• Strategic initiatives often take longer than expected or never get completed.

• Only a few people have solid project management and change management skills.

• Leadership requirements to succeed with strategy are not broadly understood.

• Co-op-wide commitment to strategy is sporadically driven.

• There is little acknowledged distinction between managing operations and managing strategy.

• The culture protects the status quo, is not supportive of new strategies or change.

• More intangible outcomes from strategy such as cultural change, mindset shifts, or behavior change are largely ignored/not included as part of the Co-op’s strategic plan.

Level 2-Developing

• Senior leaders commit to utilize a proven process to develop and execute strategy.

• Increased focus on achieving better business performance from strategy management.

• Board directors are supportive of improving strategy management capabilities.

• Leadership and leaderships skills for managing strategy are developed.

• Basic project management/change agent skills are developed to create common language, frameworks, and processes for managing strategy.

• A common set of principles, processes, methods, and tools are available to manage strategy.

• Leaders recognize the importance of aligning culture with strategy and identify areas to make the culture more receptive to change.

• Measures and targets are established for each strategic objective in strategic plans.

• Performance gaps are identified for each strategic objective and strategic initiatives are identified to close those gaps.

• Strategic initiatives are managed from a business results/objectives achievement perspective.

• Strategy scorecards are developed and used to monitor and track strategy execution.

• Risk framework introduced to encourage early identification and mitigation of execution risks.

• Strategy management accountabilities and governance process established.

• Improvements in key business metrics are beginning to be realized.

Level 3-Integrating

• All strategies are planned from a performance improvement/realization of results focused perspective.

• Strategies include integration with Budgeting, HR, Training, and Culture.

• Leaders have developed a deep understanding of their roles as “change sponsors” and are demonstrating strong leadership/sponsorship for their strategy and strategic initiatives.

• Leadership development for strategy management skills extended to managers at all levels.

• Change Agents/project managers understand their roles well enough to integrate strategic planning and strategy execution with other methodologies/processes used within the Co-op.

• Budget includes funding for strategic initiatives planned within the next fiscal year (Stratex). • Strategic objectives and initiatives cascade down and across the Co-op.

• Departments/functions have aligned their priorities to enable strategy execution.

• Departments/functions have scorecards to monitor their strategic alignment and enablement.

• Strategy, objectives, and initiatives are included in internal and member communications.

• Execution risk management incorporated into the strategy governance process.

• Strategy governance process integrated with overall Co-op Board Governance.

• Improvements in key business performance metrics move the Co-op towards top tier rankings relative to the performance of their peers.

Level 4-Sustaining

• Strategy management has become a systematic repeatable process across the Co-op.

• Strategies and strategic initiatives at any level require clear intent on realization of business outcomes and results focus.

• Strategy, Leadership development, and culture management are linked together.

• Leaders up, down, and across the Co-op are effective at managing strategy at their level.

• An advanced group of project managers/business analysts have been deployed and develop “change agent” skills in others throughout the Co- op.

• Adaptive strategy processes have been added to the mix to increase agility and responsiveness.

• HR, IT, Finance, and annual business planning linked to and enables overall Co-op strategy.

• Personal goals of all employees linked to Co-op strategies.

• Co-op employees and members understand the Co-op’s strategy and how they impact or are impacted by it.

• Strategy and Culture training is part of on-boarding and all supervisory/management and technical training.

• The Co-op culture has shifted, becoming a more accountable, nimble/agile organization.

• Leaders and project managers practice “red is good” mindset, consistently surfacing execution risks early and taking mitigating action to keep strategic initiatives on track to deliver realization goals on time and within budget.

• Strategy management has become part of the cultural DNA of the Co-op.

• Co-op is recognized as a leader and high-performance organization ranked in the top 10% of all NRECA co-ops against key business performance metrics.

So where does your Co-op land on the maturity curve? Below is a quick assessment you can use to identify where your Co-op is on the curve. The results of the assessment should be used to plan actions that move your Co-op up the curve to produce higher levels of business performance and member satisfaction.

The Strategy Management Maturity Assessment

The following are 10 statements about Strategy Management. For each statement indicate on a continuum of 1-6 if you strongly disagree (1) or strongly agree (6).

Example: At my Co-op we always do the right thing for members?

1 2 3 4 5 6

Strongly Disagree Strongly Agree

1. At my Co-op the Board and Senior Staff understand the distinction between managing operations and managing strategy. (1-6)

2. Our CEO and Senior Staff are committed to using proven methods to manage strategy to drive improved performance. (1-6)

3. We have adequate numbers of project managers who are very experienced in planning and managing strategic initiatives to achieve the expected results. (1-6)

4. At my Co-op we have a strategy management process that has become part of how we lead and manage the business. (1-6)

5. We systematically align our Co-op’s department’s plans and objectives with our overall strategy. (1-6)

6. My Co-op regularly invests in building strategy management capabilities. (1- 6)

7. We have shifted our culture to be more open and adaptable to change necessary to execute our strategy. (1-6)

8. We proactively use an execution risk framework and process to elevate and mitigate risks to implementing our strategy/strategic initiatives successfully. (1-6)

9. Managing our culture and developing future leaders is part of our strategy, not a separate activity. (1-6)

10.Our strategy and supporting strategic initiatives routinely achieve the business outcomes we planned for, on time and within budget. (1-6)

Scoring: Add up your total score for all 10 questions and see where your score falls in the table below

Maturity Levels

Score Ranges

Level 1- Learning 10-15

Level 2- Developing 16-30

Level 3- Integrating 31-45

Level 4- Sustaining 46-60

Assessing where your Co-op falls on the Strategy Management Maturity Curve, discussing it with your Senior Staff and developing a work plan to move up the curve is the first step towards increasing your Co-op’s capabilities that will lead to the outcome of improved performance and member satisfaction. Power Navigation All Rights Reserved 2023

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