How can you increase your Cooperative’s capabilities to develop and execute strategies?
Whether you are working on Co-op-wide strategy, member loyalty strategy, digital 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 shared in a Harvard Business Review article by Kaplan and Norton, show that 70% of organizations that use a formal, effective and repeatable strategy management process out perform their peers at gaining member loyalty, growing revenues, improving margins, optimizing resource allocation, reducing cycle times, managing risk and strengthening employee commitment.
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
I have learned over the years that there is a “cause and effect” relationship between task maturity and sustained high performance. Deeper levels of strategy management capabilities and the resulting improvements in performance come from moving up to higher levels on the maturity curve. Below are the four levels of Strategy Management Maturity with a list of the capabilities (or lack of) within an organization you would expect to see at each level on the maturity curve.
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 changes
A consistent approach to strategy execution is not in place
Linkage of objectives, initiatives, and budget to strategy is weak
Strategic initiatives often take longer and deliver less than expected
Only a few people have solid project and change management skills, use leading practices
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 strategy 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, process, 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 achieved
Level 3 -Integrating
All strategies are planned from a performance improvement/results focused perspective
Strategies include integration of/with Budgeting, HR, Lean, Training and Culture
Leaders have developed a deep understanding of their roles as “change sponsors” and are demonstrating strong leadership/sponsorship for their strategy
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 are cascaded 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 to higher rankings relative to the performance of their peers
Level 4 -Sustaining
Strategy management has become a systematic repeatable process across the Co-op
Strategies at any level require clear intent on business outcomes and results focus
Leadership development, culture management and strategy 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 have been developed 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-ops 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 nimble/agile organization
Leaders and project managers practice “red is good” mindset, consistently raise execution risks early and take mitigating action to keep on track
Strategy management has become part of the cultural DNA of the Co-op and Board of Directors
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 fall on the maturity curve? Below is a quick assessment you can use to identify where on the curve your Co-op falls and begin to plan the actions you can take to move your Co-op up the curve to produce higher levels of business performance and member satisfaction.
Following are 10 statements about strategy management. For each statement indicate on a continuum of 1-6 if you strongly disagree (1), disagree, agree or strongly agree(6)
Example: At my Co-op we always do the right thing for members?
1 2 3 4 5 6
Strongly Strongly
Disagree Agree
At my Co-op the Board and Senior Staff understand the distinction between managing operations and managing strategy? (1-6)
Our CEO and Senior Staff are committed to using proven methods to manage strategy to drive improved performance? (1-6)
We have adequate numbers of project managers who are very experienced in planning and managing strategic initiatives to achieve expected results? (1-6)
At my Co-op we have a strategy management process that has become part of how we lead and manage the business? (1-6)
We systematically align our Co-op’s departments plans and objectives with our overall strategy? (1-6)
My Co-op regularly invests in building strategy management capabilities? (1-6)
We have shifted our culture to be more open and adaptable to change necessary to execute our strategy? (1-6)
We proactively use an execution risk framework and process to elevate and mitigate risks to implementing our strategy successfully? (1-6)
Managing our culture and developing future leaders is part of our strategy, not a separate activity? (1-6)
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 categories below:
Maturity Levels Score Ranges
Level 1- Learning 6-15
Level 2- Developing 16-30
Level 3- Integrating 31-45
Level 4- Sustaining 45-60
Assessing where your Co-op falls on the Strategy Management Maturity Curve and discussing it with your Senior Staff and Board Directors is the first step towards increasing your Co-op’s capabilities that lead to improved performance and member satisfaction.
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