The Art of the One-Page Strategy - · PDF fileThis research note is restricted to the personal use of [email protected]. This research note is restricted to the

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G00281842

The Art of the One-Page StrategyPublished: 13 July 2015

Analyst(s): Heather Colella

Strategy can be an art or a science. Most CIOs and IT leaders experiencemore personal and organizational success when they demonstrate how ITcontributes to business success using an artful approach to strategydevelopment.

Key Findings■ Business strategy is at the heart of every enterprise, but when a traditional approach to IT

strategic planning is used, the business community often disengages from the process,because traditional approaches to IT strategic planning tend to be too lengthy and technical.

■ Most enterprises separate the planning processes for business strategy and IT strategy,creating a need for processes that "align" IT strategy to business strategy — creatinginefficiencies in the strategic planning process.

■ CIOs and IT leaders tend to report the facts when developing an IT strategy, and storytelling isnot commonly a technique in the IT executive's toolbox, but needs to be for better businessengagement.

RecommendationsCIOs and IT leaders:

■ Be bold. Learn how to create a strategic business conversation and picture of the businessmodel that can be used to create a collaboration across all aspects of the business, frommarketing to operations to HR to finance to IT.

■ Avoid the need for "alignment" processes by telling a business story and talking about businesssuccess 100% of the time.

■ Learn the enterprise story from business stakeholders, including customers. Use these storiesto create a picture of the business model. This business model will serve as a foundation forconversation with business colleagues and the IT organization to use for implementation of thebusiness direction.



Table of Contents

Analysis..................................................................................................................................................2

The Art of a One-Page Strategy........................................................................................................4

Establish Context and Create Focus........................................................................................... 4

Examples of One-Page Strategies.............................................................................................. 6

Choose an Approach................................................................................................................11

Answer Key Questions for a Rich Story.....................................................................................12

Commit It to Paper................................................................................................................... 13

Tips and Tricks......................................................................................................................... 13

Frequently Asked Questions........................................................................................................... 14

Gartner Recommended Reading.......................................................................................................... 15

List of Tables

Table 1. Refine the Approach................................................................................................................13

List of Figures

Figure 1. The Science to Creating an IT Strategy.................................................................................... 3

Figure 2. Model for Strategic Differentiation.............................................................................................5

Figure 3. Use Strategy as a Lens for Operations..................................................................................... 6

Figure 4. Southwest Airlines Was Formed on a Napkin........................................................................... 7

Figure 5. IT Moves From Delivering Value for Money to Creating Value-Added Solutions.........................8

Figure 6. Tie Process Steps or Maturity Levels to Outcomes.................................................................. 9

Figure 7. ABC Company Goes Global.................................................................................................. 10

Figure 8. One-Page Strategy Sketch.................................................................................................... 11

AnalysisCorporate results are derived from small pockets of excellence, and one of those pockets ofexcellence is strategy. Draw a triangle on a page; at the top of that triangle is the relatively smallnumber of companies that are great at creating, articulating and executing strategy in a manner thatmaximizes results. That excellence pays off in terms of higher revenue and greater net income forthe enterprise.

Most enterprises invest substantial time and energy into robust IT strategy documents that Gartnerrefers to as "WORN" (written once, read never) — an oxymoron, since they never are used enough

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to become worn. In addition to volume, another reason these documents are rarely used has to dowith the topic itself. As pervasive as technology is in our day-to-day lives, the reality is that IT is stillperceived as a black hole to its business stakeholders, whose eyes begin to glaze over the secondthey see such a large strategy document. They begin to disengage as they open it up to read it. Thislimits the usefulness of hundreds, if not thousands, of hours invested in creating the document. Thefact is, without the buy-in of all business leaders, the IT strategy has no business value.

There is a science to developing an IT strategy. Gartner's strategy template in "IT Strategy: A CIOSuccess Kit" guides users to create a document approximately 20 pages in the categories shown inFigure 1.

Figure 1. The Science to Creating an IT Strategy

Source: Gartner (July 2015)

But there is also an art to developing a strategy, and this research focuses on the art of creating aone-page strategy.

Refer to Figure 1 above, and reflect on the following: If a CIO is to do one thing, and nothing else, itis to create context for the enterprise, and to use that context to articulate the contribution of IT tobusiness success and capabilities. To create context, they answer three key questions:

1. What do we need to do to "win" in the marketplace?

2. What new business capabilities are required to achieve success?

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3. How will IT contribute to that success?

CIOs and IT leaders can play a significant role in starting that conversation, and this research isdesigned to teach the reader how to facilitate that conversation.

The Art of a One-Page Strategy

Establish Context and Create Focus

The Value Disciplines model and research by Michael Treacy and Fred Wiersema found thatcompanies that can clearly articulate how they win in the marketplace — how they achieve their

competitiveness — are more successful than those that cannot.1 There are three approaches to

market differentiation highlighted in Figure 2:

■ Customer intimacy. These companies make their money by being customer-centric.Everything they do, every product they offer and every service they deliver is about thecustomer. Retailer Nordstrom's has just such a reputation. The folklore of stories includes awoman who wanted to return car tires. She was told by the salesperson that Nordstrom's didnot sell tires, but the salesperson took the return anyway.

■ Operational excellence. The research defines "operational excellence" as companies thatprovide reasonable quality at a very low price. The focus of these companies is to drive costsout of core processes (business and IT), in order to deliver that price competitiveness for whichtheir customers are looking. Walmart is an example of a company that competes on price.

■ Product leadership. Product leaders have an eye on the future. They are able to accuratelypredict and create consumer demand. Apple is a product leader. Every move Apple makesinvolves product innovation and shaping consumer demand. Steve Jobs taught us to craveproducts we didn't even know could exist!




Figure 2. Model for Strategic Differentiation


The Treacy and Wiersema research found that companies that focus on one of these strategicapproaches are more profitable than companies using two or more strategic approaches in themarketplace.

It is easy for some companies in some industries to assume there is only one approach tocompetitive success. For example, in the transportation industry, it is logical to select operationalexcellence as the core business strategy, because without cost-effective transportation, a customeris unhappy and will leave for another competitor without pause. It is true that all companies in thisindustry have to meet a minimum standard to even be in the industry, but assume there are twocompanies within this industry. Company A wants operational excellence to be the differentiator,and Company B maintains that customer intimacy is its focus. While both have to meet a minimumstandard for moving materials, in the case of Company B, it might go further and look to understandits customers' customers, and to develop products and services that make its customers morecompetitive. It is a powerful interpretation of the business strategy, and an example of how focus inone area can deliver different results.

The value of knowing how a company competes in the marketplace is that it helps focus theenterprise, and it acts as a lens for all other activities. Figure 3 illustrates how a strategic approachis used to help create this lens. Assume that Enterprise A wins in the marketplace by placing itsemphasis on customers. That means it can divide its business processes and supportingapplications into two categories: those that differentiate the enterprise and those that do not. Higherlevels of investment can then be made in those processes that will "move the needle" for thecustomer — and subsequently for the business — and for all other processes. They can beconsidered a commodity to be supported at a level that is "good enough."




Figure 3. Use Strategy as a Lens for Operations


Likewise, it is now easier to see how this lens changes, depending on how a company differentiatesitself within the marketplace. A company that is a product leader will focus on very differentactivities from a company that chooses to be customer-centric or operationally excellent. Now it isalso easier to understand how performance can be higher if a company focuses on one approach tomarket differentiation. Investments and resources can now be more concentrated in a smaller set ofactivities, making it easier to reach mastery performance versus spreading limited resources thinlyacross a myriad of activities and achieving mediocre performance at best.

For those in the public sector, when reflecting on this model, think about a strategic approach interms of the mission of the agency. Replace the "how we win" model with that mission. In mostcases, public-sector organizations benefit by focusing on efficiently delivering their services to theenterprise, but not always, the activities of warfare are an example of where differentiation is critical.

Think about your company: Do you know what competitive approach it uses to win in themarketplace? Does the executive team understand what truly differentiates the enterprise in themarketplace? Likely there are many opinions, but no true agreement across the executive suite.Imagine how helpful it will be to facilitate that conversation about how value is created for theenterprise. That conversation can help begin to create a strategic mindset for the entire enterprise.

Examples of One-Page Strategies

Five examples of a one-page strategy follow for a sense for what a target outcome looks like.

The first example is the U.S. airline carrier Southwest Airlines. In 1967, over a few drinks, Rollin Kingand Herb Kelleher created a vision of a low-cost commuter airline moving passengers across three




cities in Texas (see Figure 4). From that vision, an industry was born for low-cost air transportation.2

Germanwings and EasyJet airlines are just two other companies that follow a lost-cost deliverymodel started by Southwest Airlines.

Figure 4. Southwest Airlines Was Formed on a Napkin

Source: Southwest Airlines

Figure 5 shows the strategy for a leading IT services company in Europe. This company designs,builds and operates IT systems and services for large-scale clients in both the public and privatesectors. After 30 days on the job, their new CIO shared a picture of the strategy he wouldimplement over the next three to six years.




Figure 5. IT Moves From Delivering Value for Money to Creating Value-Added Solutions


In the words of this CIO, the strategy was outlined as follows:

■ "On the bottom layer of the triangle is service and cost. That's the foundation," he says. "ITdelivers service and good value for the money. We had little investment for years before Iarrived, so I spent Year 1 on this layer, including putting a team in place that could manage it. Ofcourse, this work continues to be critical and will always be subject to a continuousimprovement program."

■ "The middle layer involves removing duplication and complexity, both from IT and businessprocess. We centralized IT and introduced standards. I spent Years 2 and 3 on this layer, andwork will continue in some areas for some time — but the direction is clear and stable anddelivering real value both for our business areas as well as for IT."

■ "The top layer is where we create and deliver value-added solutions — system and processdevelopment work aimed at growing the business. We could only work here when we had theother two layers under control. I have been able to spend the last year and a half here, workingon change management. We would have moved up the triangle faster if the core had originallybeen in place." To grow the business in this top layer is where the enterprise would expect tosee the development of new products and services or growth strategies designed to attract newcustomers — anything that would provide enterprise growth.




Because IT didn't have much business credibility when this CIO arrived, it was important for the CIOto build an "inside-out" IT-business strategy by starting the story purely from an IT perspective. Oneof his key messages was: Once he got his house in order, he would partner with his businesscolleagues to fix the other issues he found during his assessment. He would work with them tooptimize business and IT processes so they could build a strong foundation for business growth.Most one-page strategies focus solely on the business and not on IT, but in this case an "IT first"strategy was necessary.

The third example of a one-page strategy started as just that — an example of how a companycould represent its growth strategy in a series of steps, shown over time (see Figure 6). An attendeeat a workshop at Gartner Symposium/ITxpo 2013 in Orlando, Florida, saw this example, andthought: "I report to the CFO and have an upcoming meeting with the executive team for the firsttime since I have been with the company. This is similar to what our company is looking to achieve."He adapted the picture to the specifics of his company. As a result of his ability to demonstrate thebusiness context within which IT contributes to business value, he was given a permanent seat atthe executive table and his reporting structure was shifted from the CFO to the CEO — a powerfulpicture on many levels for this CIO!

Figure 6. Tie Process Steps or Maturity Levels to Outcomes





The fourth example started in a similar manner: It was an example used at a workshop at GartnerSymposium/ITxpo 2013 in Orlando. In this case, the CIO attending the workshop was presenting tothe board of directors the week after returning from the event. He adapted the picture to thespecifics of his company's growth story (see Figure 7). As a result of his ability to clearly articulatethe corporate strategy and IT's contribution to that strategy, he now regularly participates in boardmeetings and IT is a permanent agenda item for the meetings.

Figure 7. ABC Company Goes Global


The fifth and final example is a sketch drawn up while talking to a client (see Figure 8). The businesswas clear about how success was measured. The idea was to create a dashboard at the top of thepicture using the business measures of success. Underneath that scorecard would be thecapabilities required to achieve this business success. In this case, the business executives neededsome education about the IT investment model. Like many business associates, they assumed thatevery dollar invested in IT would result in at least a dollar of new business capability. Yet the realityis, there are components of that dollar that need to be understood. Using Gartner IT Key MetricsData, we know that 68% of every dollar goes for "run the business activities," leaving only 32%available for growth and transformation initiatives, including enhancements to the existingapplications portfolio (see "IT Key Metrics Data 2015: Executive Summary"). This CIO was intendingto weave that point of education into the story so her business colleagues would begin tounderstand the role they play in the investment/governance process.




Figure 8. One-Page Strategy Sketch


The adage "A picture is worth 1,000 words" is true. More powerful is the ability to tell a story. If apicture is worth 1,000 words, then a metaphor is worth 1,000 pictures. Let's explore how to developthat business story and metaphor.

Choose an Approach

After establishing context and choosing a model for strategic differentiation, the next step indeveloping a one-page strategy is to choose an approach for creating the picture. There is no rightor wrong answer, and the approach chosen may change the further into the process you get. That isokay. The thought process that goes into this is very important, and will serve you well when peopleask, "So why did you choose this approach?" To choose an approach, select one of the following:

■ Look at your strategy through the eyes of your internal stakeholders.

■ Tell your story from the point of view of your customers/clients.

■ Use a process view of the enterprise to highlight the vision.




■ Begin with a picture of the business you are in — for example, the product you make or thestore from which you sell your products, and identify the capabilities that the enterprise needs inthe marketplace to win.

To help select an approach, use the following tips:

■ CEOs and other key leaders often have a mantra that helps them quickly and effectivelycommunicate their vision and create focus for the enterprise and investors. For example, in the1980s, Ford Motor Company promoted the vision "Quality Is Job 1." This mantra implied thatprocess was more important than anything else the company could focus on, and thatdesigning processes that efficiently produced high-quality cars was key to success. What arethe mantras your key leaders use, and what story do they help tell?

■ How does the enterprise tend to talk about itself? Does it refer to people ("Our employees arethe most important asset of the company.")? Does it talk about process ("Quality Is Job 1.")?Does it talk about the product ("Innovation is the core of the enterprise with the introduction ofthree to six new products annually.")? If process talk is common, then selecting a processapproach might be appropriate. Likewise, if people refer to clients and internal stakeholders,then use that perspective. Finally, if the product is king, then use a product approach.

■ Use the results from the Treacy and Wiersema model for strategic differentiation to determine anapproach. If the enterprise approaches the marketplace from a customer perspective, then oneof the first two approaches above are likely appropriate. If the company is focused onoperational excellence, then a process view — focusing on and improving the top five to sevencore business processes — is more appropriate. If the company is a product leader, then apicture of the business — the store from which products are sold — might serve as the basis forthe approach.

Answer Key Questions for a Rich Story

After selecting an approach, answer the corresponding questions in Table 1 to help refine the"story." Look for what does work, what can be leveraged going forward and what does not work.




Table 1. Refine the Approach

Approach Key Questions Examples

Internalstakeholders

If you were to tell a story from astakeholder perspective, what wouldstakeholders say?

Executives: "How can we determine our strengths if wedon't know our revenue and profits by product?"Customer service: "It takes me 10 minutes to boot up mysystem every morning. How am I supposed to helpcustomers if I can't get online immediately?"Users: "I love how this works; I wish other areas workedthis well, specifically ...."

Customers/clients

If you were to tell a story from acustomer or client perspective, whatwould they be saying about yourcompany?

Customers: "Every time I call in, I'm on hold forever."Customers: "I'm sick of the arrogance of customerservice."Customers: "I know the product better than the productfolks!"Customers: "I love how they call me by my first name, Ifeel as though they know me personally."

Processes What end-to-end issues exist with thecurrent process? How do you know?What works well with the processtoday? How do you know?When the process is "perfect," whatwill happen?

Minimal process handoffsDecisions made in a single stepCustomers served as close to "immediate" as possible

Capabilities What are the capabilities the enterpriseneeds to be more competitive (win) inthe marketplace?

Examples: The ability to cross-sell products and servicesand the ability to launch new products monthly


Commit It to Paper

Now the fun begins: Draw a picture, keeping the following tips in mind:

■ Expect the process to be iterative.

■ Use the stories told by your business peers to lead you toward a base picture.

■ Imperfection is perfect. The purpose is to create something that will help initiate a conversation.The fifth example shown above is a good example of a strategy ready to be used to facilitate aconversation in an organization. The strategy will refine over time, and through the processpeople will understand, contribute and commit to the business strategy more easily.

Tips and Tricks

Consider the following tips and tricks when developing your one-page strategy:

■ Most people are better editors than creators. Resist the urge to create the perfect picture. ITprofessionals have a tendency to strive for perfection, and it makes sense when developing an




application or warding off intrusions into the environment. When working with business peersand trying to engage them in sharing a vision, "good enough" is in fact good enough, and is theright starting point. If you've made the picture "perfect," then business peers do not feel theneed to contribute by making their mark, yet making their mark is exactly what you want themto do.

■ While developing the picture, consider enlisting the help of the public relationships or corporatecommunications organizations.

■ Once the one-page strategy is complete, resist the urge to laminate it. Lamination impliessomething is done and static. Great strategy is an ongoing conversation and is adjusted asconditions change, be they financial, competitive or in the marketplace.

■ Use this picture as a starter for every conversation about strategy, every success to date andevery change that has taken place. The more truly worn the document is, the better. It takestime for people to internalize a message, in part because so much comes at us each day. Usinga consistent picture to show vision, progress and next steps will help people really understandwhat the strategy is and what their role in achieving it is.

■ Develop a library of "stories" to help bring the vision to life. Talk to various stakeholders, listento the stories they tell and document them. Think about your strategy from various perspectives— customers, employees, business executives and investors — and project what they wouldsay. Document these stories as well. Use these stories to help people fully internalize thestrategy.

■ Build context around the one-page strategy. Your strategy is in response to the environment: themarket, competitors and a deep understanding about how the company will win in themarketplace. Use this context in a manner in which, when your conversation is done, peopleconclude, "That strategy makes sense given the conditions our business is experiencing."

Frequently Asked Questions

Gartner analysts take hundreds — sometimes thousands — of inquiries each year on IT strategy.The following are the three most frequently asked questions on this topic:

Q: How do I get started when the enterprise does not have a documented business strategy oris not clear about its strategy?

A: If an enterprise does not have a documented business strategy or is not clear about itsstrategy, then consider using industry measures as a de facto strategy. Ask yourself: "What arethe basic capabilities that need to go right in order for any company in this industry to besuccessful?" That will offer a starting point for a picture and a conversation.

Q: What should I develop: a business strategy or an IT strategy?

A: In most cases, develop a representation of the business story, because within that story IT'scontribution is implied. The only time a CIO would lead with the IT story would be in the case ofthe second example above: IT didn't have the credibility to talk about business, they needed to




build a strong repeatable IT core first before they could talk to what the business needed toaccomplish.

Q: What do I do when the enterprise chooses multiple approaches to winning in themarketplace (for example, product and customer)?

A: Share the Treacy and Wiersema research findings that companies that focus on oneapproach to competitiveness are rewarded with higher revenues and profits. If that is notconvincing, then share the perspective in Figure 3, which demonstrates how a strategicapproach can be used to focus an organization. If that is not successful, then accept thecompany for where it is in its maturity, and use the multipronged approach to competitivenessas the lens. Over time when it becomes clear how each investment dollar is diluted when takinga multipronged approach to success, the enterprise will be ready for more focus.

Most companies, when talking about strategy, use the word as a noun, yet great strategy is a verb.In looking at a definition of "strategy," we see "a systematic plan of action to achieve a goal." Thatplan of action is not static. It is very dynamic, and so is great strategy. Continue to lead withstrategy in every conversation, and use the strategy developed here during regular meetings toreassess the marketplace, customer changes and the enterprise's competitive stance.

Gartner Recommended ReadingSome documents may not be available as part of your current Gartner subscription.

"Effective Communications: IT Strategy"

"Improve Your IT Strategy by Using the 'Counterstrategy' Test"

"Effective Communications: Lead Through Storytelling"

Evidence

1 M. Treacy and F. Wiersema, "The Discipline of Market Leaders: Choose Your Customers, NarrowYour Focus, Dominate Your Market," Basic Books, 1997.

2 D. Roam, "Southwest Airlines Keeps Up the Napkin Spirit," The Back of the Napkin Blog, 19 April2008.


http://digitalroam.typepad.com/digital_roam/2008/04/southwest-airli.html



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The Art of the One-Page Strategy - · PDF fileThis research note is restricted to the personal use of [email protected]. This research note is restricted to the