Peeling the Onion: VaPGO model of strategy formulation
Management Strategy is a topic of evergreen interest and debate since the beginning of modern management with F. W. Taylor’s famous monograph published in 1911. Outsiders usually want to know the strategy of an organisation and the plan to achieve what it aims at. They are not as interested in the process of finding out why the strategy came to be so.
It may seem that just by creating a ‘strategic’ plan periodically an organisation’s job is done. That feels intuitive and deceptively simple. The reality is far from it. The practice of leadership and management has also bought into this intuitive logic. It has come to a stage where even good leaders and managers confuse strategy with periodic planning and budgeting. As Prof. Roger Martin, dean of Rotman School of Management pointed out in his recent blog, “…strategy is a singular thing; there is one strategy for a given business — not a set of strategies.”
I think that is true. It is a thought process we need to move to. The important questions they need to ask and seek answers to are:
- Why form a strategy?
- Which fundamental basis informs strategy formulation?
- How to define parameters of success of strategy?
Peeling the onion
Thinking about these questions, I imagined it to be like peeling an onion to expose the layers inside. Given the objectives that an organisation (or individual) can grasp in a shorter term, what are the goals it is trying to achieve in the medium to longer term? If those are the goals, what is the core set of principles – ethics – that are driving the endeavour to achieve them? What is the one value(s) it is trying to create? This gave birth to the VaPGO model.
The VaPGO model
I call this model VaPGO for the sake of simplicity (VaPGO = Values, Principles, Goals, Objectives). This is the outside in perspective. I think it is more useful. Organisations do not disclose their strategic objectives often. However they do talk more openly about their values, culture, and principles etc. It could be called, by the same logic applied in opposite direction the OGPVa model.
If the users of this model are clear about the principles and want to arrive at the value(s) they want to deliver, they could begin from inside out. Alternatively, if they know shorter term objectives and wish to have a stable strategic framework for the longer term, they may follow it outside in.
VaPGO model follows a simple 5-step question and answer structure. Here are the steps:
Step 1: Which behaviours, practices, habits etc. would we like to encourage and discourage?
This should be as exhaustive a list as possible. Take your time to gather all the things that you, as an organisation or individual, would encourage and discourage within your sphere of influence. You may or may not have actually done these but you would encourage/discourage nevertheless. They range from offering bring-your-own-device to wasteful use of water and electricity on office premises to procrastination etc.
Step 2: Why do we wish to encourage and discourage these things?
This why may not be as trivial as one may think on the face of it. The answer can’t be merely ‘because we don’t like / like these things’. Please think twice before providing a superficial answer. One answer may form the reason for a group of encouraged/discouraged things.
Step 3.1. What are our/my priorities based on the things we encourage/discourage?
These are the things you do not just encourage/discourage but would want to make sure are done/not done.
Answer them in the order of preference – a list with the most important first, followed by the second priority, and
Step 3.2. Which of these priorities are non-negotiable goals that the organisation (or individual) must
achieve in order to justify the reason for its existence?
Step 4: What are the main 2-3 motivations that are driving these goals?
The motive(s) behind these goals are the value(s) that the organisation is trying to create. These values define how the organisation wants to be measured.
Please note that here I refer to ‘value’ as instrumental (or extrinsic) value, as it is known in the study of philosophy.
Step 5: What are the things that we cannot compromise on even if that means sacrificing or delaying achievement of one or more of the goals listed in Step 3.2 above?
The rules that must be followed while striving to deliver on the values form your ethic (normative ethics). It is the core set of principles that guide judgements of the rightness and wrongness of actions taken.
Answers – preferably as single words or terms – to all steps in respective concentric circles for your fundamental strategic organisational make up.
- Ethics inform the vision (organisational or individual) – what you are and will be known for
- Values inform the mission – what you have set out to create through a life time
- Goals inform the periodic plans – measurable landmarks of strategic success in the medium to long term.
- Objectives inform measurement – specific and measurable milestones the will let you know if you are on track
This is not an annual planning or budgeting tool although its outcomes, especially goals and objectives will certainly help guide the short (1-2 year) term planning and budgeting as well as medium term (3-5 year) corporate planning exercises.
Please try it and let me know what works and what does not seem to work in your situation. I would be glad to peel this onion again and again with your help as that is also as iterative as is VaPGO model.
Please use comments section to let me know your thoughts.
Disclaimer: The views, opinions, thoughts and ideas that I post on this blog are personal. They are, in no manner whatsoever, representative of or endorsed by any of the corporate entities that I have, do or will work with.