Business and supporting strategies

What is a business strategy?

A business strategy describes: the business direction for the future (short and medium term as minimum; ideally covering longer term as well) in terms of a vision, strategic themes and a portfolio of planned changes to which every programme and project contributes.

Why is it important?

You must be able to think strategically about your organisation's business direction and future plans. If there is no business strategy, you will be at risk of:

lack of ownership by the business of its programmes of change
missed opportunities to exploit new ways of working for business benefit
lack of coherence in HR planning
lack of coherence in investment in workplace, infrastructure and IS-related projects
inability to share assets, information and electronic service delivery with others
inflexibility when faced with changes in the business and its environment.

In today's business environment, there will be periods of major change, often change that cannot be forecast; thus your approach to strategic thinking must produce robust results to cope with uncertainty. The business strategy helps to ensure that plans for investment in business change (including IS/IT and workspace) are integrated with the business strategy and support the business, whatever the changes ahead. It provides a clarity of purpose, common understanding and a framework for detailed planning; it gives the organisation a focus on the strategic developments it should be pursuing and a view of the future towards which it is moving.

Key factors for success

Critical success factors for a business strategy are:

there must be continuous involvement of business management from the outset
where strategic partners are involved in service delivery, there must be a shared understanding of the benefits to be derived from the combined strategies
there must be a willingness to think strategically, and receptiveness to new ideas
throughout strategy formulation there must be evaluation of the potential for new ways of working to enable change (for example, providing new opportunities for service delivery) - or for current assets to block progress (for example, existing workspace on infrastructure that cannot be enhanced cost-effectively).

The business strategy must be maintained continually, in line with changes in the business and its environment. It should be formally reviewed at least annually as part of the business planning round; it provides the context for progress reporting on strategic themes.

The business strategy must always show progress against plans to date, to enable planners to determine the current business environment and the impact that specific change programmes and projects will have on the organisation as a whole.

Who is involved?

The business strategy is a senior management responsibility; it must be owned and managed by the business. The people involved in strategy formulation, monitoring and review include:

business managers with responsibility for the strategic management of business change in the organisation
advisers on business, IT and workspace management issues
staff responsible for assisting with development and review of supporting strategies for HR, IT and workspace management.

Other parties with an interest in the business strategy, and who may provide inputs to its strategic management could include:

in-house providers of services, and those directing external suppliers and service providers
service providers; they will need to have an understanding of what will be expected of them as consultants advising on strategy study teams and/or as providers of services.

Principles

Strategic decisions about the business of the organisation, its products and services, and its overall functions and organisation. These strategic decisions will include:

how will new ways of working contribute to the support and development of the organisation's business functions, and to the development and delivery of its products and services?
what changes and developments are required in HR, IT and current workspace in the organisation, and in the organisational arrangements for their management?
how will new ways of working, including the supporting information technology and workspace, be developed or acquired by the organisation?
how will new services be managed and delivered, internally and externally, to ensure that the business benefits are realised?

The strategy is separated from detailed plans. It is made up of:

a strategy statement describing the themes
a list of candidates for action ('shopping list' for implementation)
a high level plan - profiles for action made up of selections from the 'shopping list'.

Strategic issues
You must be able to identify the strategic issues facing the organisation - those issues it must address if it is to meet its business objectives. These might include social inclusion, for example, or environmental issues. The responses to strategic issues will be incorporated in the themes of the business strategy. There is not necessarily a one-to-one relationship between strategic issues and the themes of the business strategy, since themes will be chosen as the basis for programmes of business change, and one such programme may address several strategic issues.

Strategic themes
The themes of the strategy express the areas to be addressed if your investments in new ways of working are to make the most effective contribution to the success of the business. Themes are usually described in terms of significant changes or developments required in, for example:

training or staff in radically different skills
exploitation of high-potential technology
external communications and interworking
managing the information resources of the organisation
sourcing and procurement issues
services offered to customers or the public
design and exploitation of workspace.

The relationship between strategic issues and strategic themes for the strategy, and the way in which strategic themes are progressed through programmes of change, are illustrated in Figure 4.

Detailed plans, schedules and resource costings will be produced as part of programme and project management activities (Programme and Project management).

Figure 4: Strategic issues and programmes of business change

Identifying strategic issues
You must play an active role in the identification of strategic issues, and in confirming that the business strategy adequately addresses the issues facing the organisation.

You will need to deploy 'strategic thinking' to answer these questions effectively. The characteristics of strategic thinking can be summarised as:

an ability to see the 'whole picture' - looking across all parts of the organisation and its business, and its relationships with others; understanding the connections between them, both now and in various possible futures
creativity - thinking outside existing boundaries and constraints; identifying and questioning the assumptions upon which the existing business organisation and operations are based
scenario generation and evaluation - consideration of many possible futures for the organisation, through formulation and responses to 'What if?'questions
ability to deal with ambiguity and uncertainty
identification of strategic issues - the strategy will be driven by your perception of the challenges and opportunities facing the organisation (the issues), and your strategic response to them (the strategic themes).

The business strategy - the agenda for change - should be kept under regular review, and updated when necessary. In identifying the strategic themes for the strategy, you should be aware of the risks involved (Managing risk).

Processes

The strategy cycle is made up of the following stages:

preparation: planning and scoping
strategy study or strategy review: radical thinking; identification of strategic themes and strategy definition
high-level planning: identifying candidates for action
programmes of business change
continuous strategic management: regular review of the strategic themes (with a direct link across the cycle to changes in high-level plans)
review of goals and intended outcomes, leading to a new study.

See also the Strategy Management workbook for step-by-step approach to this topic.

Table 5 summarises the stages of strategy formulation.

Stage

Activities

Products

Comments

Preparation

boundaries - what is in and what is out? Single business area,
whole organisation, infrastructure?
scope - what topics?
study plan development
validate Terms of Reference

boundaries: organisational view of strategy
initial view of scope: topics to be addressed in strategy
initial view of business environment
preliminary interview list
outline study plan
validated TORs.

Essential to have thorough planning - successful outcome of study depends on this

Focus on where to find information, who to tell, who to confirm

Information gathering

look at: documented information, including previous strategies, business aims and objectives, existing tactical plans and contracts;
what people say in interviews, focus groups etc.; current initiatives;
perceptions of where the organisation is now
carry out business analysis
assess current workspace, information, organisation/management and policies and strategies
identify strategic issues - what must the business address?

business drivers, priorities
strategic issues
models of the business
information about processes
assessments of current position, risks and scope for change
assumptions and the business scope

What is possible?
Strategic thinking about the scope for change, following information gathering and analysis: early thinking about strategic issues, opportunities, collaboration with others, partnerships etc.

FIRST CHECKPOINT WITH MANAGEMENT the business scope and requirements (baseline for problems, issues and the scope for change)

Stage	Activities	Products	Comments
Identifying the direction for the future	identify strategic themes - what will scope the future direction? identify candidates for action - radical thinking, brainstorming the options In parallel: define IS architectures - process, data develop and confirm overall vision for the future	definition of themes candidate projects for each theme options for implementation broad architecture and standards vision statement	Divergent thinking: Radical questions: how can we do things differently? In-depth considerations of the need to work together and share information/processes with other organisations in and outside the sector. Focus on business change: will existing IS and workspace be an enabler or a blocker? Addressing the need to cope with uncertainty.

SECOND CHECKPOINT WITH MANAGEMENT outcome of strategic thinking: themes and initiatives; proposed strategic vision

Stage	Activities	Products	Comments
High level planning: mapping out the future	strategy realisation: high level plans strategy definition planning for organisation, management and policies	High level plans for action: strategic, ongoing, other recommended way forward strategy statement plans and policies for organisation, management and policies; sourcing, IT architecture and standards	How? Convergent thinking High level planning for business change Strategy statement separated from plans Changes in organisation, management and policies for delivering new ways of working

THIRD CHECKPOINT WITH MANAGEMENT strategic recommendations for the way forward

Stage	Activities	Products	Comments
Progressing the strategy	detailed planning estimates, business case benefits assessment Implementing plans: programme management Ongoing strategic management: taking strategic decisions, updating the strategy and themes, updating plans as required	study report profiles linked to programmes of change programme definition(s) business case(s)	Detailed planning

Further information:

Cabinet Office guidance on business planning: your delivery strategy

Business change briefing: Identifying direction for the future

Business change briefing: Strategic management

For workspace aspects, see also: Workspace management briefing; Achieving excellence. For the HR aspects see also Skills and competencies.

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