Chartering New Waters in Strategic Thinking

How do you drive out the strategy for your organisation? Is it through brainstorming? Is it a bit more tokenistic and a matter of retrofitting existing activities to defined goals? Or do you have a specific framework for coming up with new ideas for how to achieve success?

The Policy Charter, which we’re discussing today, is another framework developed by Ronald G. Ross and his colleague Gladys Lam, and does the third of these things. It is all about driving out the tactics and policies that an organisation wants to pursue in meeting defined business goals. If you are really interested, the best place to go is Ronald G. Ross, “Becoming Strategy-Driven:  The Policy Charter,” Business Rules Journal, Vol. 10, No. 6 (June 2009), URL: which is what this post is based on, but I am going to have a go at summarizing it myself because I think it fits quite neatly into the broader model that I’m exploring through this blog.

So, what exactly is a Policy Charter? Here I need to be a bit careful around my language to make the distinction between technique and output without creating a whole lot of ambiguity.

The Policy Charter approach is essentially a way of generating and defining strategy. It is envisaged that this would generally occur through a facilitated workshop with the key stakeholders and by mapping out on a whiteboard (or other medium) the tactics and policies required to achieve the set goals. It assumes that goals have already been defined, but it also assumes that there is some leeway in what can be done within the organisation.

It also provides a framework for identifying and addressing risks to the achievement of your vision. I’m in two minds about this. On the one hand, it would nice if strategy could be all optimistic and be about looking forward and up to what your organisation wants to do! But I think (sadly) it would be naive to go full steam ahead without keeping a close eye on risks – both to maintaining the current state of the organisation as well as to achieving its goals. So risks are probably an essential part of developing strategy. It’s not something I’ve talked about too much (or at all!) so far in this blog though.

Before we go too much further, it’s probably worth clarifying what some of the key terms mean in the context of a Policy Charter.
·         A tactic can be defined as a course of action that can be followed to meet or contribute to achieving a business goal.
·         A risk can be defined as an exposure arising in day-to-day business activity that can prevent or complicate achievement of a business goal.
·         A policy can be defined as guidance indicating how a tactic should be followed in order to achieve a business goal. This is not the definition of policy that I’ve used previously and it comes from quite a different angle. I have previously defined policy as more along the lines of “a statement of organisational intent that is documented in an internal facing document which guides the behaviour of an organisation’s staff and volunteers for a specific aspect of the organisation”. If you think about it, it’s the same thing.

A Policy Charter itself, is the output from one of these sessions. It is a visual representation of which activities have been agreed upon and which goal/s they contribute towards. There is a fairly specific way for a policy charter to be set out, but I think – as with most tools and techniques – that there should be room to adapt it to meet your purposes.

Here’s a picture to illustrate what a policy charter can look like:

Mini policy charter

I love this diagram, but I it doesn’t help you much as an example of what tactics, policies and risks you might come up with. Let’s go back to Wally’s Sweetstuff’s franchise for a practical example.

These might be the goals, tactics, policies and risks that you would have on your policy charter:

Goal – Make $50,000 profit a month

Tactics – Publicise the fact that you have the largest range of fruit chews in the country through newsletter and Facebook page

Policies – Issue newsletter once a month. Ask every customer if they want to receive the newsletter. Post on Facebook every day.

Risk – Competitor develops larger range

Policies – Keep a current inventory of fruit chews in stock, check competitors stock once a month.

So how do I think this should be applied? I think this is a great way of initially thinking about what needs to occur to achieve the ends desired by the organisation and the fact that it links policies and goals together is a revelation – in fact the policy charter is one of the widely applicable concepts that actually sparked the passion behind my blog.

And I’ll be thinking a bit more about risk over the next week or two, because I feel that it is something that I have previously skipped over. I do like seeing it in the policy charter but I’m not sure how important risks are in strategy relative to goals, constraints and everything else we need to think about.

But at the end of the day, the policy charter technique has the same limitation as any strategy development technique – it is not about implementation. Of course, this is fine – that’s not what it’s supposed to do – but just remember. You can plan all you want but to make it achieve something you then need to embed it into ongoing procedures.

What do you think?

What do you think about the policy charter technique? And do you think risks should be less, equally or more important than goals in developing strategy?

What do you think?