Making Strategy Happen
Does your practice have an effective strategic plan? Robert Peake of Management for Design outlines the importance of strategy, and suggests some ways to get started.
Not all architectural practices need a business plan, a strategic plan, strategic objectives, or a clear direction. Those businesses with a compelling design proposition or unique market expertise don’t need it. Does it help? Yes. Is it necessary? No. These practices are successful because of their unique and compelling value proposition, which clearly differentiates them from the normal. Think Gehry, think Richard Meier, think ARM!
But most businesses – and I mean 95% – are not in this situation. Many like to think they are but, in our experience, the market doesn’t see it this way. So what’s the solution to elevate your business above the performance of your competitor?
It’s no secret that many architectural businesses are superficial in their planning, concentrating on the design, fees, schedules and day-to-day deliverables rather than defining exciting, attainable objectives for the future that will motivate the key people and lead to high achievement.
Our research shows that up to 70% of architectural businesses do minimal or no strategic planning. Of the remaining 30%, only one in three achieve clear and sustainable change in their business, which leads to new markets, new locations, new client sectors, new design approaches, new ways of working or improved leadership.
In our experience, five critical elements need to be in place to make strategy happen:
- Leadership needs to drive the process
- A level of excitement
- It has to be concise with definitive timeframes
- It needs to be flexible
- Consider execution before you the start
I will discuss these more later, but first, how and why do you develop a strategic plan?
Why develop a strategic plan in the first place?
The key reason for developing a strategic plan is to position your business to create and sustain an advantage in an increasingly competitive environment. Success, of course, is subjective and will mean different things to different people – it could include more interesting projects, more engaging clients, more talented people, more revenue, more profit or more innovation. Each business needs to work this out for itself and the strategic planning process should clarify these clear objectives for the future. An effective plan points to specific results to be achieved and establishes a course of action for achieving them.
Where should you start? Take a look at your business. Does there seem to be a lack of focus on where the company is headed? Does everyone clearly understand the goals for the business? Strategically, how will the business achieve those goals? Is your current planning horizon longer than one year? Are you developing annual business/operating plans without a strategic plan in place? Your strategy is your opportunity to develop and deliver on an integrated set of choices.
Why does it matter? Arguably, the leading cause of business failure is the lack of a well-implemented strategy. And if the leadership of the business is not aligned with where the business is heading, it will wander aimlessly, with priorities changing constantly and key people confused about their own contribution and priorities.
Planning to fail
Given this, why do so many businesses lack a clear strategy? And why do the majority of those who do fail to execute it? The fundamental problem is leadership. More often than not the practice leaders are engaged in the here and now – the current and next project; the current and next client etc. Yet, at the same time, they bemoan the lack of quality documentation or don’t understand why they’re not attracting and retaining great people.
Secondly, the pathway to leadership in an architectural practice is typically through design or client relationship talent. It’s not business acumen that gets them there! This means that, typically, leaders of design practices don’t have the inherent discipline and capability that enables effective strategy development and execution.
We talk to many leaders who fall victim to the gap between promises they’ve made and results their practices delivered. They frequently tell us they have a problem with accountability – people aren’t doing the things they’re supposed to do to implement a plan. They desperately want to make changes of some kind, but what do they need to change? They don’t know – and if they do they don’t know how to make it happen.
Even when the strategy process has been attempted typically busy leaders delegate the operational side of business, while they focus on the perceived “design and client” issues. This is completely wrong. Execution is not just words, documents and tactics – it is a discipline and a system. The leadership of the business must be deeply engaged in it.
The building blocks of success
Level of excitement
There is so much methodology and advice around strategy that sometimes you need something that will get you and your people excited and will make things happen. In order for a strategy to gain traction, and to engage the people within the business, there needs to be level of anticipation in your objectives and plans. It can’t all be about improving the profit margin or making more effective use of your technology, or fixing up your communications collateral. Obviously these can be important initiatives but if you want to engage people there needs to be an element of excitement amongst the leadership and the people. Think about it. What would that be for your business? – Creating a landmark in the city? Establishing a presence in a new location? Aiming for market leadership in a new sector? Becoming expert in a new work type?
Strategic objectives should stretch the limits of your business capabilities, making them exciting to achieve, without being impossible to accomplish.
Leadership
Leadership can’t delegate strategy development and execution – leaders need to step up. A business can only make things happen, drive change, and deliver strategic objectives if the leaderships’ heart and soul are immersed in the business. The leadership needs to be in charge of getting things done by running the three core processes – setting the strategic direction and priorities, engaging the right people, and regularly monitoring progress.
Only a leader can ask the tough questions that everyone needs to answer, then manage the process of debating the information and making the right trade-offs. And only the leader/s who is intimately engaged in the business can know enough to have the comprehensive view.
What exactly does a leader who is in charge of execution do? How does he or she avoid being a micro manager, and getting caught up in the details of running the business? Briefly, the core elements are:
- Knowing and challenging your people
- Being realistic
- Keeping to clear and actionable goals
- Following up and creating energy
- Rewarding those that contribute
- Knowing yourself and setting the example
Flexibility
Unforeseen change in business naturally occur so you also need to allow for flexibility in your plans.
It’s more effective to continually review and develop the businesses and align your strategic objectives rather than talking and debating the new office in Asia or the new documentation standards. Get on with things. Take small steps, assign smaller goals, communicate your successes, analyse your weaknesses, adapt your approach, seek out business partners that can assist – make things happen, measure their success or otherwise. I can guarantee that others are. If you’re not, then remember our industry is too competitive and too dynamic for you to sit back and wait!!
And when you find yourself at the top don’t rest – the best businesses find ways to do great things even better.
Concise with definitive timeframes
Your strategy is not a business plan – they are two different things. You don’t need to document your strengths and weaknesses, you don’t need to define your brand and you don’t need a comprehensive set of numbers. Don’t create something that will sit in the bottom drawer and requires endless revisions to make it live.
Start with the big picture – what does your business need to look like to thrive in the marketplace in three years? Then action these into ambitious but realistic milestones of three and twelve months, assign responsibilities and tasks to individuals, build in realistic timeframes, targets and measurement criteria to assess progress. With the right people and methodology it’s possible to develop a strategic plan, with a plan for execution, in one day.
Consider execution at the start
We have seen strategic plans not being implemented over and over. In order to avoid this you need to have a plan and process in place for executing your strategy. You need to consider and involve those people that will contribute to making it happen at the early planning stages. They need to take ownership and be part of the process from the start.
How will you reward those people that make it happen? Is that ownership, becoming a Director, profit share, heading up a new office? I can guarantee that even if you aren’t thinking about this, your key people are. Work out what system you will use to track progress – How you will keep people up to date? Where you will keep the key documents? Is your strategy going to be shared with everyone in the business or just the highlights? How much time will the leadership dedicate to follow up and follow through and where is this time going to come from? How often will you meet to review progress? What support will you need? What will prevent the day to day getting in the way? How much time and resources are you prepared to invest? Don’t commence the planning process until you have thought through these issues and put in place the systems to ensure you deliver on your plans. Don’t let strategy become planning!
Robert Peake is a director of Management for Design, and a member of the ACA – Vic/Tas Committee.