Writing a strategic plan can be a daunting process, even for seasoned strategy professionals. However, if you have an intimate knowledge of your business, and have a clear strategic model to follow, writing a strategic plan is actually surprisingly easy.

This guide will teach you how to write a strategic plan using a simple model that will help you to define precisely what you want to achieve and how you’re going to get there. Whether or not you’re using a strategic planning software like Cascade, or going old-school with Excel (or even pen and paper!) – simply follow the steps outlined here and you’ll have written a strategic plan to be proud of before you know it.

This article is part one of our mini series ‘How to Write a Strategic Plan’. This first article will focus on giving you a solid strategy model for your plan. Think of it as the foundation for your awesome new strategy. Subsequent parts of the series will show you how to actually create the content for your strategic plan.

You can download our free ‘How To Write a Strategic Plan’ eBook which contains all of the articles from the series…

Before creating your strategic plan, you need to decide on the structure you will use. There are literally hundreds if not thousands of ways to structure a strategic plan. You’ve likely heard of famous strategic models such as OKRs. But beyond the well-known ones, there’s also a myriad of other models ranging from extremely simple, to bewilderingly complicated.

The trouble with many of the strategic models out there, is that they work reasonably well on-paper, but when it comes to reality, they don’t actually walk you through exactly how to write a strategic plan – or at least one that is truly meaningful to your organization. Here’s just a few of the issues we see which affect many of the popular strategic models:

• They’re too complicated. People get lost in terminology rather than focusing on execution.
• They don’t scale. They work well for small organizations, but fail when you try to extend them across multiple teams.
• They’re too rigid. They force people to add layers for the sake of layers.
• They’re neither tangible nor measurable. They’re great at stating outcomes, but lousy at helping you measure success.

In this article, we’ll show you a simpler, more effective way to write a strategic plan. We call it the Cascade Strategy Model. Whilst not dis-similar to some of the most popular strategy models – we find that this approach to strategic model is simply more effective when it comes to execution than any other model we’ve tried. That holds true for small organizations right through to multinationals trying to figure out how to write a strategic plan. It’s easy to use, and it works.

The Cascade Model

To give you an idea of how a strategic plan following the Cascade Model will look once finished, we’ve created a simple diagram below. It’s fairly self-explanatory, but we’ll explore the individual components in a moment.

Think of your strategy as a flow chart that reads from top to bottom, with each step being mandatory before going down to the next. There is a reason that we called our product ‘Cascade‘ – and that is that strategy needs to not only cascade down throughout your organization but it itself needs to cascade from a Vision Statement, to Values, Focus Areas, Objectives, etc.

Most of all, the Cascade Model is designed to be execution ready – in other words, it’s been tried and tested in delivering success far beyond the strategic planning phase, it adds to an overall successful strategic management process.

Core Elements of Your Strategic Plan

Before we get into how to write a strategic plan, we first need to explore the different components of one.

Vision

Your vision statement defines where you want to get to. Do not start your strategic plan without defining your Vision Statement! Lots of articles have been written about the value of a good Vision Statement – but we’ll summarize as follows:

• Your Vision Statement is the anchor that stops you getting lost at sea.
• It will help to tunnel your strategy towards the outcomes that matter the most to your organization.
• Every single thing that you write into your plan from this point onward, will ultimately be helping you to get closer to your Vision.

One of the biggest blockers to the successful execution of a strategic plan is when it tries to achieve too much in one go. Creating a Vision Statement will help you to avoid that trap right from the start. Not only that – but a truly well written Vision Statement will provide guidance and inspiration for your people. It might even help you to attract talent and investment into your organization.

A bike manufacturing company may have a vision statement such as:

‘To be the premier bike manufacturer in the Pacific Northwest’.

This vision statement clearly articulates where the organization would like to be, and the value of the organization. If you’re ready to start creating you vision statement, check out ‘How to Write A Good Vision Statement’ – the second article in our ‘How To Write A Strategic Plan’ mini series.

Values

Unfortunately, the notion of ‘corporate values’ has been abused to the point of ridicule over the past century or so. Volkswagen’s ;corporate values include: ‘Integrity & Accountability’. When it comes to how to write a strategic plan – values represent how you’ll behave as an organization as you work towards your vision.

Too often, organizations simply throw out words that they think will sound good in a glossy marketing brochure but have little relevance to anything else. Our take on ‘Values’ is subtlety different and hopefully somewhat more pragmatic. Think of Values as the ‘enablers’ to your Vision Statement. Don’t be afraid to be honest about how you want your people to act and think.

It can be easy to become over-focused on outcomes. Outcomes matter, but if the way in which you go about achieving them is wrong, the outcomes themselves risk becoming irrelevant. Not only that – but organizations are ultimately nothing more than the sum of the people within them. The need for basic rules about how you want those people to work together is no different as to why the game of soccer needs rules. They exist to give a common purpose to your team (scoring goals), and to provide boundaries as to what people can to do achieve that purpose (no foul play).

Using the bike manufacturing example from earlier, some good values would include:

• Innovative
• Passionate
• Accountable
• Compassionate

These values reflect the organization’s beliefs to strive to be the leading bike manufacture – but not at any cost. How they get there is also important, and treating employees, customers and all other stakeholders with compassion and staying accountable is vitally important. When you’re ready to start creating some company values check out our guide ‘How To Create Company Values‘.

Focus Areas

Your focus areas are the high level things that you’ll be focusing your efforts towards as you strive towards your vision. Focus Areas should be tighter in definition than your Vision Statement – but not to the level of having any particular metric or deadline. Following our manufacturing example above, some good Focus Areas might include:

• Aggressive Growth
• Nation’s Best Bikes
• Modern Manufacturer
• Top Place To Work

We usually suggest creating between 3 to 5 Focus Areas. Any fewer and they will probably be too vague. Any more, and well…..I for one certainly can’t focus on more than 5 things at once!

You absolutely want your people to feel empowered to come up with innovative and creative ways to be successful. But for the same reason that you’re reading this guide right now – giving them a framework within which to do so, will be hugely helpful.

Well-written Focus Areas can themselves be inspiring and motivational. Once again, they will help to unite your organization behind a common purpose – and bring a sense of togetherness and belonging which should help to ease the tensions that can sometimes arise between teams and colleagues.

The third article in this mini-series walks through ‘How to Write Effective Focus Areas‘ in depth.

Strategic Objectives

Strategic Objectives represent what you want to accomplish – they’re reasonably high level, but should still have a deadline attached. Your Strategic Objectives should align to one or more of your Focus Areas. Typically you’ll have between 3-6 objectives for each focus area.

It’s here that for the first time in our journey we need to start being a bit more specific. How specific? Let’s take a look at an example of a well written Strategic Objective:

-Continue top line growth that outpaces the industry by 31st Dec 2020

This is too specific to be a Focus Area. Whilst it’s still very high level, it indicates what they want to accomplish, and includes a clear deadline. Both these aspects are critical to a good Strategic Objective.

To be honest – your Strategic Objectives are the heart and soul of your plan – without them, you have no plan!

More helpfully perhaps, the reason they’re important as distinct to your Projects (see below) is that jumping straight into Actions is a sure-fire way to either (a) miss opportunities or (b) lose the connection between your Actions and your Vision Statement.

If you’re ready to start creating your strategic objectives, check out article 5 of this mini-series – ‘How To Write Strategic Objectives‘.

Projects

Projects describe what you will do to accomplish your objectives. They must be extremely specific and contain a deadline and a clear articulation of your actions. Your projects should align to at least one of your strategic objectives and describe how you will actually achieve your strategic objective. Typically you will create multiple projects for each Strategic Objective.

Let’s take a look at an example of a well written project continuing on with our bike manufacturing company. Using the strategic objective from above –

‘Continue top line growth that outpaces the industry by 31st Dec 2020′

A good project that would link to this could be –

‘Expand into the fixed gear market by 31st December 2020’

This is much more specific than the objective it links to, and it clearly details what you will do to achieve the objective.

Projects are the layer of the strategic plan that outline the tangible actions that people in the organization will take to actually achieve outcomes. Another common problem area for strategic plans, is that they never quite get down to the detail of what you’re actually going to do. It’s way too easy to simply state ‘we need to grow our business’ – without concrete projects, those plans will sit forevermore within their PowerPoint templates, never to see the light of day after their initial creation / review. Learn more about writing effective projects here.

KPIs

KPI’s are how you will measure progress towards your strategic objectives. They’re measurable values that show your organization’s progress towards achieving key business objectives. KPIs should be developed to contribute to achieving a specific goal or objective. If they’re not developed with a specific objective in mind, they run the risk of stealing attention, time, and money from KPIs that actually help to achieve strategic objectives. You’ll ideally want to include a mixture of both leading and lagging KPIs for each of your objectives.

Key performance indicators are a form of communication in an organization. They allow you to determine whether you’re behind, on track, ahead, or have achieved your objectives. They inform business leaders of their organization’s progress towards reaching key business objectives. KPIs are able to provide this information because they actually track the most important performance measures, which can be taken together to represent how successful you are in achieving an objective.

If you’re ready to start creating KPIs, check out the 6th article in this mini-series ‘How to Write KPIs – 4 Step Approach’

Let’s take a look at a real-life example of how this all fits together:

Here’s a quick info graphic to help you remember how everything connects and why each element is critical to creating an effective strategic plan:

To summarize:

Vision – where you want to get to.

Values – how you’ll behave on the journey.

Focus Areas – what you’ll be focusing on to help you progress.

Objectives – what you want to achieve.

Projects – how you’ll achieve them.

KPIs – how you’ll measure success.

This simple approach for how to write a strategic plan avoids confusing jargon, and has elements that the whole organization can both get behind and understand.

Scaling the Cascade Strategic Framework

One of the issues we highlighted with other strategic models is that they often fail to effectively describe how to scale the model across multiple teams, or through multiple layers of the organization. In other words, how to effectively cascade the strategic model throughout your organization.

In an ideal world, you want to have a maximum of 2 layers of detail underneath each of your focus areas. That means, you’ll have a focus area – followed by a layer of objectives – followed by projects and KPIs on the same layer as each other, directly underneath the objectives.

This works well for a single team, but if you want to implement a strategic plan across multiple teams (let’s say for example you have a HR team, under which is a Recruitment team), what do you do?

Depending on how much time you want to invest in strategic planning, there are two approaches that you can take:

Option 1: Create aligned cascading objectives

This approach involves simply adding lower level objectives that link to your higher level objectives, like this:

For each lower level objective, you simply repeat the Objective – Project – KPI structure as follows:

You can keep doing this as many times as you like, but do be aware that if you have a lot of layers, your strategic plan can get quite messy. Furthermore, the owners of the objectives towards the ‘bottom’ of the plan are managing things that are very far ‘downstream’ from the focus areas they link to. That could create an engagement problem with people struggling to really understand how they contribute to the top levels of the strategic plan.

Because of these challenges, this approach is best suited to smaller organizations who only need to add a couple of extra layers of objectives to their plan to get down to the level of detail they want.

Option 2: Created aligned / nested strategic plans

This approach involves creating a network of aligned strategic plans for each team within your organization. Each plan contains a set of focus areas, one single layer of objectives, each with its own set of projects and KPIs. Something like this:

The key to making this successful is to ensure that the objectives of each of your lower level strategic plans, links directly to the objectives in the plan above it. Doing so ensures that you maintain alignment throughout your organization, but still allows you to cascade your strategy as deep as you want, across a near-infinite number of people.

The other major benefit to this approach is that typically you’ll see much higher levels of engagement in the strategy throughout your organization, as objective owners will be able to clearly see the links between the objectives they own and the focus areas of their ‘nearest’ strategic plan.BOOK A DEMO

How To Write a Strategic Plan – Conclusion

Let’s take a quick look at how adopting the Cascade Strategic Framework solves the most common issues that people encounter with writing a strategic plan:

• Not too complicated. Terminology is simple to understand and the linkages are clear, without ever deviating from the objectives – project – KPI ‘triangle’.
• Scales easily. By linking objectives (either in a single plan, or across multiple nested strategic plans) the model scales infinitely without losing clarity or focus.
  
• Extremely flexible. The model balances the flexibly of linked layers with the minimum requirement of always having an outcome (the objectives), an action (the projects) and a measure (the KPIs).
• Tangible & measurable. By incorporating KPIs directly in the model, you’re forced to think clearly about what success looks like and you’ll always have a relevant set of KPIs to track for your strategy.

When it comes to the question of how to write a strategic plan – you’d be pretty hard pushed to find a better starting point. The Cascade Strategy Model is inspired by the best models out there already (we like OKRs a lot for example) but is simple, effective and proven to work in organizations large and small.

Whilst strategic planning is an important part of striving towards success – it’s actually only the beginning. Strategic execution is the part which most organizations struggle with. That’s why we created the Cascade Strategy Model. It’s the culmination of thousands of experiences implementing strategy with our clients (large and small) and we think it’s quite simply the best way to structure your strategic plan – regardless of your industry or size.

If you need a hand implementing any of the above in Cascade, just drop us a line.

Let us know what you think about our take on how to write a strategic plan. Comment below or jump onto our Facebook Group to discuss it in more detail with other members of the strategy community.

by Maddy Mirkovic, on Jun 5, 2019 8:38:00 AM

Questions about KPIs are frequently heard here at Cascade, whether that be from one of our 6000+ users or 60,000+ subscribers. We noticed a lot of people struggling to find examples on the web that were the right fit for their needs. So we thought we’d put together our own 4 step approach to writing great KPIs, and share it with you. This article will walk you through our 4 simple steps to writing great KPIs as well as answer a few commonly asked questions about KPIs, such as KPI meaning, how many KPIs should you have, and what are they used for in a business.

KPI Meaning

KPI stands for Key Performance Indicator…but what does key performance indicator mean? Well, the KPI definition that we use is, a measurable value that shows the organization’s progress towards achieving key business objectives. Organizations can use Key Performance Indicators as a way to track whether their key business objectives are on track, behind, ahead, or have been achieved. 

Writing KPIs – The 4 Step Approach

Possessing knowledge on how to write KPIs is extremely valuable for any business professional. So, if you need a hand to get going, follow our 4 step approach to writing KPIs:

1. Determine strategic objectives
2. Define success
3. Decide on measurement
4. Write your SMART KPIs

NOTE: At this point, I should mention that when I use the term ‘strategic objectives’ in this article, I’m referring to the purpose of your actions. While some may argue that this should be called a goal or an initiative rather than an objective, I would argue that the terminology is not as important as the concepts they represent. As long as the concept behind each term is well understood in your organization, there is no reason to change your terminology (even if your terminology doesn’t match that of our post – as long as the concepts do).http://www.youtube.com/embed/RJDA7wLey6M

Tip: Don’t copy your KPIs straight from someone else’s list!

While there’s a wealth of KPI examples available online – scrolling through industry lists, picking out a KPI and attempting to force it into your strategy won’t do you any favors.

Why?

Well, KPIs should be developed to contribute to achieving a specific strategic objective. If they’re not developed with a specific strategic objective in mind, they run the risk of stealing attention, time, and money from KPIs that actually help to achieve strategic objectives. The best KPIs for YOUR business are designed by starting with YOUR specific business objectives. Now, this is not to say all the content available on KPI examples is useless, because it’s definitely not – it’s actually an important resource. But, looking through KPI examples shouldn’t begin till AFTER you have determined your own key strategic objectives.

Alternative vs Value-Based Decision-Making

To get a better understanding of why you should always start the KPI process by having first defined strategic objectives, consider the two potential ways of deriving your KPIs:

• Alternative-based decision-making
• Value-based decision-making

Alternative-based decision-making relies on choosing your preferred option from the alternatives offered.

Example:

Decision maker: I would like a coffee

Waiter: Sure, what milk would you like?

Decision maker: What do you have?

Waiter: We have full cream, skim, or soy milk?

Decision maker: I’ll take the full cream milk.

Value-based decision-making relies on assessing what matters most to you and then making a decision that meets your needs.

Example:

Decision maker: I would like a coffee

Waiter: Sure, what milk would you like?

Decision maker: (Considers objectives: I like a good tasting coffee, but also want to keep the fat content down because I’m watching my weight) I’ll take soy milk with one serve of artificial sweetener.

Waiter: No problem.

As you can see, the decision maker in the first example listened to the alternatives presented and then selected their preference based on the options given. However, the decision maker in the second example examined their objectives and what they really wanted from a cup of coffee first, and then made a decision which met their needs.

When writing KPIs, using the alternative based approach and scrolling through industry KPI lists will leave you with your preferred KPI from that list, but achieving that KPI won’t necessarily mean you’ve achieved your strategic objectives. On the other hand, using the value-based approach and considering your key strategic objectives first will ensure you end up with KPIs that once achieved, will mean you’ve also achieved your strategic objectives.

Your organization’s business model, industry, and even the department in which you operate will have an impact on the type of KPI you need. Luckily, we’ve devised a best practice process for how to write KPIs that will allow you to create the perfect KPIs every time.

Step 1 – Determine the Key Strategic Objectives

Before writing KPIs, you’ll first need to determine which of your organization’s strategic objectives you’re trying to gauge. If you’ve been following along our mini series “How To Write A Strategic Plan: The Cascade Model’ then you will have already defined some strategic objectives for your organization, and you’re ready to create some KPIs.

If you haven’t defined any strategic objectives (or goal) for your organization yet, check out this article first and then jump back over here to create your KPIs.

E.g. Strategic Objective: Increase the flow of the marketing pipeline.

Step 2 – Define Success

Now that you’ve identified your strategic objectives, you’ll need to begin thinking about what the success of each objective looks like. Sticking with the same example used in Step 1, if my objective is to increase the flow of the marketing pipeline, the success of this objective means increasing the number of contacts that enter the pipeline, and increasing the number of contacts that pass through the end of the pipeline and get handed over to Sales. By first defining what success looks like, deciding how you will measure the success of your objective becomes a lot easier.

When defining the success of your KPI, you will usually find there are multiple parts to the definition of your objectives success. In the example used above, we found there were two parts to achieving success of our objective –

1. Increasing the number of contacts that enter the pipeline.
2. Increasing the number of contacts that pass through the end of the pipeline and get handed over to Sales.

As mentioned earlier, this is the time when it might be useful to look through a few KPI examples to help get some inspiration for how you can define the success of your key business objectives. Again, you should avoid copying KPIs straight from a list, as, chances are, they won’t perfectly fit your strategic objectives. Instead, use the KPI examples as a way to ideate how you can measure the success of your own strategic objectives.

We’ve collated a whole bunch of KPI examples already and grouped them by the department to help give you a little inspiration:

Step 3 – Decide on measurement

Next, you’ll need to decide how you will actually measure success. Going back to our example once again, we’ve identified that the success of our objective means increasing the number of contacts that enter our pipeline AND increasing the number of contacts that pass through the end of our pipeline

Let’s start with the first part of this – Increasing the number of contacts that enter our pipeline. Contacts enter our marketing pipeline when they subscribe to our mailing list or exchange their details for content for the first time. When contacts engage in either activity, they automatically get added to our marketing automation platform as a subscriber. Using the number of new subscribers added to our marketing automation platform over a time period is an easy way for us to measure the number of contacts entering our marketing pipeline.

Now let’s look at the second part – Increasing the number of contacts that pass through the end of our marketing pipeline. Contacts pass through the end of the marketing pipeline when they’re ready to be handed over to our Sales Team. We use the term “SQL” (Sales Qualified Lead) to define a lead that has moved through the end of our marketing pipeline and is ready for our Sales Team to pick up. Our marketing automation platform adds a tag on each contact profile to identify which life-cycle stage they are in based on certain activity. Again, through our marketing automation software, we can use the number of contacts who become a SQL in a given time period to measure our success.

This is where it might be wise to start considering dashboard software to track and display your KPIs. You’ll likely use various platforms and tools across your business to measure your KPIs, but having a central location to track and view all your departmental and organizational KPIs will ensure you have a clear view of your success. Cascade’s Dashboard tool is extremely powerful and allows you to pull data from all around your business, so you can display your most important information, real time, to whoever in your organization needs it.

Step 4 – Write your KPIs

Finally, it’s time to begin actually writing your KPIs. KPIs should follow the SMART format (specific, measurable, attainable, relevant, and time-bound), to ensure your KPIs meet this criterion, we’ve devised a formula that you can follow to ensure you end up with SMART KPIs every time. The main advice here is to keep things simple. KPIs should be understood by everyone within the organization. That means no jargon (if possible), and keeping them to one sentence long.

We suggest a structure as follows:

Action Detail Value Unit Deadline

Putting it all together, our KPIs may look something like this:

Example 1

Increase new HubSpot lead profiles to 40,000 people by 31st December 2019

Example 2

Increase new SQL profiles to 20,000 people by 31st December 2019

Starting off with a verb forces you to be specific about what you’re trying to do. A metric and unit ensure your KPI is measurable and a deadline will do wonders for staying timely on your progress.

Cascade does a great job helping write KPIs this way with it’s goal designer (See screenshot below)

How Are KPIs Used in an Organization?

Key performance indicators are a communication tool for organizations. They inform business leaders of their organization’s progress towards reaching key business objectives. KPIs are able to provide this information because they actually track the most important performance measures, which can be taken together to represent how successful you are in achieving an objective. This information channel is extremely valuable as, in a well-designed strategy, an organization’s key business objectives should have a direct impact on the organization’s overall performance. Therefore, KPIs will communicate whether your activities are achieving, for example, business growth at the rate expected or not, and how much growth you’ve actually achieved.

KPIs also assist in identifying issues with organizational processes. If the progress on an objective falls behind, the key performance indicator associated with it will communicate this to business leaders as soon as the trend begins to show itself (assuming you have leading & lagging KPIs). The organization will know that something has gone wrong and an investigation is required. A strategy to mitigate the issue can then be created and implemented before it has far-reaching effects on the organization’s performance.

How Many Key Performance Indicators Do You Need?

The question of how many key performance indicators you need will vary with every company. However, we do have a framework which you can apply to help you assess how many KPIs you’ll need to implement for your organization. The number you need will depend on how many key business objectives you have in your organization. As a rule, we generally say you should have 2-3 KPIs per objective, to ensure a variety of measures without overwhelming the picture. The reason we use a minimum of 2 KPIs as a rule, is because we believe each business objective should have at least 1 leading indicator and 1 lagging indicator. This allows you to predict future performance as well as record the actual performance and compare these to the direction of your business objective.

What Are Leading and Lagging KPIs

Leading and lagging KPIs are often mentioned when it comes to strategy, but what is the difference between the two? A leading KPI indicator is a measurable factor that changes before the company starts to follow a particular pattern or trend.Leading KPIs are used to predict changes in the company and future performance, but as predictors, they cannot always accurately forecast the future. On the other hand, a lagging KPI is a measurable fact that records the actual performance of an organization.

Leading key performance indicators are often easier to influence than lagging KPIs, however, generally measuring them can prove more difficult. Lagging KPIs, on the other hand, are usually easier to measure, though much harder to influence. If you’d like to learn more about Leading and Lagging KPIs, check out this post.

KPI Reporting

Creating relevant, measurable and time-bound key performance indicators is great, but it’s only half the job done. The other half (which can often go overlooked) comes down to figuring out how to actually track and report on them appropriately and accurately. While it can be tough setting up this kind of tracking and reporting, if you don’t create an easy way to view and stay on top of progress, the KPIs aren’t going to be much use. A KPI report is a presentation which displays and communicates the current performance of an organization compared to its business objectives. It’s a tool used by management in order to analyze performance and identify issues. These reports can take many formats, including formal written reports, spreadsheets, powerpoint slides, or dashboards.

Dashboards

Creating a KPI dashboard is a great way to provide at-a-glance views of key performance indicators relevant to a specific business objective, department, or the whole organization. Now, before your eyes glaze over with boredom as another business term is introduced, dashboards are just another name for a progress report. However, what makes dashboards more powerful than your typical business report is that they’re usually hooked up to business systems so the data is automatically updated. The benefit of this is it ensures the data is always relevant, as it doesn’t rely on someone in the organization continuously updating numbers. This is just one of the many benefits of using dashboard software for your strategy report.

Dashboards also give you total visibility of your business performance instantly, display KPI progress in a visual presentation to keep reporting engaging, and save time when compared to the hours poured into creating regular reports. If you’re looking for help creating a great KPI dashboard, check out this article we wrote a little while back. We walk through how to set up a great strategy dashboard which includes all your business KPIs for an instant snapshot of your performance. We’ll also be adding more examples of key performance indicator dashboards for specific department in the coming months.

Amazon and Apple are both among the most admired companies in the world. However, feedback from employees on Glassdoor.com suggests that both have historically somewhat struggled with employee engagement – which can cause a whole range of issues. The courses of action they have taken to address this through reward and recognition have been different.

So which approach to employee rewards is right?

Apple
Apple believes especially in offering employee rewards for independent thinking. The company compensates its executives by giving them a bonus of 3 to 5 percent of salary. Last year according to media reports, Apple gave out restricted stock units to a majority of its more than 100,000 employees.

Apple also gives discounts on its range of products to further boost motivation, not to mention retail staff’s ability to sell the products. Furthermore, Apple doesn’t just reward work within the company. It also rewards volunteering. The company’s new donation-matching programme, for example, is being rolled out to all employees.

Employees say they find it rewarding that they aren’t micromanaged – a tone Steve Jobs himself set when he gave his team their mission “to create a phone that people would love so much that they would never leave the house without it.”

Perhaps Apple’s greatest achievement is that they have created a feeling that the work itself is rewarding.

‘It’s a company that when you sign on you’re getting to be a part of something larger, you’re getting to be a part of pioneers that are actually making a difference in people’s lives,’ says Business Manager John.

‘I think what Apple gives the employee is the opportunity to be part of something really, really meaningful,’ says Joel, Vice President of Human Resources.

Amazon
Amazon believes in taking a long-term approach to employee rewards. Amazon’s CEO Jeff Bezos set out his vision in the company’s first ever letter to shareholders, when the company went public back in 1997. The letter’s main point is that we can’t realise our potential as people or as companies unless we plan for the long-term. This is still the company’s philosophy today, illustrated by the fact that this letter has been included in every subsequent annual report.

While Amazon gives its employees – or Amazonians as they are known – the usual benefits, as well as discounts on Amazon purchases, the company prefers to reward employees with long-term stock options rather than cash.

Bezos explains his logic in the 1997 letter: “We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.”

Here’s the catch – stock options only turn into a reward if the employee stays more than two to five years.

Amazon is also pioneering new programmes for employees who have undertaken one year of continuous service, such as Career Choice. The company pre-pays 95% of tuition for courses that teach in-demand skills, regardless of whether those skills are relevant to a career at Amazon. Does this ‘reward’ actually encourage people to leave, rather than stay at the company?

As an article in Buzzfeed recently pointed out, “A revolving door. Churn and burn. An overwhelming need for new bodies… These are all phrases that have been used to describe Amazon’s high turnover rate and fast-and-loose corporate culture.”

Several comments on Glassdoor.com suggest a harsh corporate culture with high employee turnover. A current Senior Product Manager based in Seattle advises management to “treat employees as well as you treat your customers and you’d be better off”.

However, the same employee also states that “Amazon is an excellent place to work if you…enjoy a fast paced and rewarding career with excellent upside potential. I like it how performance is rewarded with increased responsibilities and stock based awards.”

Defining your reward & recognition strategy
Whether you believe that Apple is right, or Amazon with its longer-term approach, it is important to define your reward and recognition strategy. Nowadays it’s easier as more and more companies buy in a reward and recognition programme. If you do this, the programme should be company-branded, tailored so that it reflects internal processes and markets, flexible and easy to use.

Companies need to develop programmes to keep employees engaged and motivated so that they can help deliver the strategic goals. In this regard, we can all learn something from both Apple and Amazon – even if we decide to start with more simple steps to drive engagement.

Which approach do you think is correct? Should employers reward as successes are achieved?

What is an After Action Review? It is a technique to evaluate and capture lessons learned upon the completion of a project. It allows project team members to discover for themselves what happened, why it happened, and how to sustain strengths and improve on weaknesses. It is structured as an informal discussion with the main team members of the project.An After Action Review can also be conducted at the completion of the project or any key milestones of a project that has a long duration.It is not a critique or a complaint session. AAR maximizes learning by offering a platform for leaders and members to honestly talk about the project. It is not a full-scale evaluation report. Why conduct After Action Review? The purpose of an After Action Review is to review the project outcomes vis-à-vis the intended outcomes of a project. The AAR is the basis for learning from project success and failures. It is the starting point for improvements in future projects. Team members can identify strengths and weaknesses and determine how to improve performance in the future by focusing on the desired outcome and describing specific observations.The project team can document the lessons learned and make it available to the rest of the organization to improve decision-making. How to conduct an After Action Review?  An After Action Review can be conducted as soon as possible upon completion of project or major project milestones.Generally the following discussion questions are used to build consensus on the lessons learned:What was expected to happen?What actually happened? What went well and why?What can be improved and how?What are the lessons that can be used in the future?At the start of the AAR, the facilitator should review the purpose and sequence of the AAR to ensure that everyone understands what an AAR is and how it works. The introduction should also include some ground rules for conducting and managing the discussion.  The role of the facilitator will be explained during the introduction.Some pointers for facilitators:It is permissible to disagree. Encourage members to provide honest opinionsUse open-ended questions to guide the discussionParaphrase and summarize key discussion pointsThe focus of the AAR is on learning i.e. identifying lessons learned rather than blaming individuals for wrong decisions or performance evaluation. Mistakes or poor decisions can be translated into learning opportunities.In order for this to happen, there must be an atmosphere of trust and openness.The discussion should ensure that specific issues are revealed, both positive and negative in nature. Skillful facilitation will ensure the AAR does not gloss over mistakes or weaknesses.In some projects, other stakeholders can provide useful insights and ideas to the review process. Before the review session, the facilitator or designated team member should consult with these outside stakeholders and then summarize the input for the AAR.The lessons learned are captured on a flip chart or electronically. This is dependent on who uses the information and how it is used. Flip charts are a convenient tool to make notes visible for all participating in the review and ensures a common understanding of and agreement to what has been discussed.Electronic capturing in the intranet enables reference later on and dissemination to relevant parties who are involved in similar projects. Who should conduct an After Action Review An independent facilitator can be used to conduct the AAR. A trained independent facilitator may be able to ensure participation from everyone. The facilitator will also be able to draw out insights and issues through probing questions.While an independent AAR facilitator could maintain objectivity throughout the review, it may be useful to enlist someone who is somewhat knowledgeable about the subject or topic of the review. That would minimize the learning curve and enable technical discussions to be carried out and recorded clearly.Alternatively, a project team member could facilitate the AAR. The team leader must ensure that all background materials are considered—reports, surveys, planning documents or other input. This will ensure that the AAR is complete, thorough, and appropriate

Building Knowledge Clusters

What is a Knowledge Cluster Throughout history, organizations have grouped together in various types of cluster, to be able to be more effective. Guilds, Societies, Associations, Networks etc continue to help support and develop their members. However, since the birth of the ‘Knowledge Economy’ there has been far more emphasis on the knowledge contained, developed and applied, within the organizations. There is much more interest in different types of Knowledge Network. The Knowledge Economy, and the primary knowledge management processes, in turn, have been newly enabled, in radical and fundamentally new ways, by communication, information, and collaborative working technologies, based on the Internet and World Wide Web.   The term ‘Knowledge Cluster’ is a term given to a group that, as a result of coming together in this new way, create, innovate and disseminate new knowledge. In other words, different individuals, teams and organizations can now come together, virtually, on the Internet, to better communicate, collaborate, learn and share knowledge through the cluster. The term is used, for example, to represent a group of companies in the same industry sector e.g high technology knowledge cluster, biotechnology knowledge cluster. There are Regional Knowledge Clusters where groups of organizations come together, regardless of their size, around specific topics. Often, there is a high incidence of innovation centres linked to local Universities. At the center of the cluster, there is usually an R&D topic, and core public research institutions with high research potential. The system can also involves the participation of organizations and other groups from both inside and outside the locality or region. A Knowledge Cluster may be viewed as a type of  Community of Practice (COP). A Knowledge Cluster is a more focused COP, normally with the aim of combining knowledge resources to create new innovative products and services and/or organize and compete in new ways, to win larger business contracts. Why use this tool? There are many good reasons to form and/or join a Knowledge Cluster. But, of special importance, is the use of Knowledge Clusters for small and medium sized organizations (SME’s). This enables them to gain access to, and participate in, new knowledge networks with new knowledge resources. SME’s can now communicate, collaborate, learn, share, and apply their knowledge much faster, and at a much higher quality, than ever before. Most importantly, SME’s are able to create a Knowledge Cluster that, in many ways, can effectively compete with large Organizations. For example, small regional legal firms have formed successful national legal Knowledge Clusters. As a result of the Internet, they can maintain lower operating overheads, compared to the higher overheads of large organizations.  As a result, they are quite often more price competitive, more resource flexible, and often are able to respond and act much faster than larger organizations. But also, even very large organizations have formed collaborative knowledge clusters to produce products and services that would be impossible to produce individually. A good example of this is Airbus Industries who formed a collaborative knowledge cluster in the Aerospace Industry to build the fundamentally new Airbus 380. Furthermore, Knowledge Clusters can stimulate Regional development. More specifically for example, the Advancement Center for Science & Technology (NOASTEC) Knowledge Cluster Headquarters in Japan, highlight the strategic importance of Knowledge Clusters and refer to them as human networks that will promote beneficial feedback between the “seeds” of innovative technology possessed by public research organizations and other groups forming the core, and corporate needs for practicality. This creates a chain reaction of technical innovation, which eventually results in the creation of new industries. By expanding the regions which have this sort of system, it is possible to achieve world-class technical innovation. Migakiya Syndicate, a local consortium consisting of over forty small metal-polishing companies at countryside in Japan, is another example of Knowledge Cluster. The small companies used to produce most of the metallic western tableware in Japan, but the industry has faced serious decline over the last two decades. Managers of the companies started discussions along with representatives from the Chamber of Commerce and Industry to find the way to revive the structurally-depressed industry. They then realized that their core skills and knowledge was not manufacturing tableware but polishing anything – they had strong technical skills. Based upon the finding, they formed the knowledge cluster to market their capability of polishing, receive orders from any industries, and work together on the orders. The knowledge cluster received over 150 million yen orders in three years, and the once-declining industry achieved its revitalization through sharing and improving their core knowledge and skills. So SME’s can now both compete with larger organizations, through forming competitive knowledge clusters, and have more opportunity to join the value chain of large collaborative knowledge clusters, regionally and internationally. Thus, knowledge Clusters are considered to be the new 21st Century model for competitive knowledge driven organizations. How to use Knowledge Clusters     Step 1    Become aware of the knowledge clusters that exist in your industry sector and join them.                   Contact your local University for Knowledge Cluster initiatives.                   If none exist, then consider forming a new knowledge cluster. eg a ‘Ceramics knowledge cluster.’                  In any case, understanding key knowledge areas for the organization is one of the most critical                         successful factors.     Step 2    Become competent in participating in Web based collaborative knowledge working. Consider                             developing the competencies for effective personal and team virtual knowledge working.     Step 3    Understand, and become active in the knowledge cluster, by applying the principles of working in a                      Community of Practice. Especially, building trust relationship with other players is essential for the                      successful knowledge clusters.     Step 4    Consider knowledge clusters as a key strategic resource and competitive tool within your business                     strategy.

Ÿ What is Communities of Practice? Origin: Dr. Etienne Wenger and his team of social scientists were one of the early pioneers to establish the concept of Communities of Practice (COPs) through their study on apprenticeship as a learning model. They found that complex set of social relationships in apprenticeship that enabled learning effectively and named them Communities of Practice. COPs became one of the central focuses of knowledge management after their first book on COPs, Communities of Practice –Learning, Meaning, and Identity, was published in 1998. Since then, COPs have been played an important role in the context of KM especially for sharing common knowledge beyond formal divisions/departments, and, indeed, as a tool to break down the barriers of knowledge flow across organizations.  Definition: COPs are groups of people who share a concern or a passion for something they do, and learn how to do it better as they interact regularly. In the context of knowledge management, COPs are formed –intentionally or spontaneously- to share and create common skills, knowledge and expertise among employees.  Characteristics: COPs can exist in a division or department in an organization, across departments in an organization, or beyond boundaries of multiple organizations, depending upon its objective. COPs are usually for sharing and developing common skills, knowledge and expertise such as group of engineers working on similar problems, a network of surgeons exploring novel techniques, or a gathering of first-time managers helping each other. There are also some COPs that focus on generating new knowledge and innovation. The size of COPs varies from 2-3 people to thousands of people, and members of expertise could be either homogeneous or heterogeneous. For example, a COP for effective/efficient problem solving on a certain technological domain would have engineers in the same area, whereas a COP for improving quality of a certain product would have members from various areas such as developers, marketers, and maintenance staff. The following three elements are crucial when one designs COPs. ü   The domain: A community of practice is not merely a club of friends or a network of connections between people. It has an identity defined by a shared domain of interest. Membership therefore implies a commitment to the domain, and therefore a shared competence that distinguishes members from other people. The domain is not necessarily something recognized as “expertise” outside the community. They value their collective competence and learn from each other, even though few people outside the group may value or even recognize their expertise.ü   The community: In pursuing their interest in their domain, members engage in joint activities and discussions, help each other, and share information. A Platform that enables such activities is essential for a COP. It is based upon relationship of trust among members that encourage frequent interactions to share and develop common knowledge.ü   The practice: COPs are not merely a community of interest–people who like certain kinds of movies, for instance. Members of a community of practice are practitioners. They develop a shared repertoire of resources: experiences, stories, tools, ways of addressing recurring problems—in short a shared practice. This takes time and sustained interaction. It is the combination of these three elements that constitutes a community of practice. And it is by developing these three elements in parallel that one cultivates such a community. Ÿ  Why COPs for SMEs?COPs could have various reasons for SMEs to apply, but the simplest and strongest reason is probably to effectively share and develop skills and knowledge among employees without huge investment, if COPs are designed well. As described in the next chapter, COPs usually does not require significant investment; you can form a COP as long as you have a certain domain and people who have passion on the domain. This is quite appealing for SMEs who usually cannot afford expensive skill development programs for employees. Many companies have COPs in which the company encourage participants help each other; for instance, one raises his/her facing problem and then another advises or shares his/her own experience. Other COPs merely give opportunities to exchange best-practices on a common subject.In addition, relationship of trust among employees nurtured through COPs would contribute increase employee’s satisfaction and eventually retain valuable workforce that are often key issues for SMEs. You can even form COPs to share common skills and knowledge across your company: among workers at various SMEs to create Knowledge Cluster. Sometimes, COPs are also formed for accelerating innovation. In this case, people from various backgrounds get together to discuss and experiment certain ideas. Ÿ  How to nurture COPs?Because COPs are essentially gathering of people, vigor among COP particiapnts is very important. However, we cannot force people actively involve or design active communities artificially, indeed. As a practical matter, the largest reason COPs fail is lack of vigor to attract and keep participants actively involved. Many successful COPs, instead, nurture the seedbed of activities through artful and flexible design although COPs themselves are spontaneous and organic. The following step shows basic principles of designing and sustaining active COPs.  1.      Find opportunities around strong needs: COPs usually work well when strong need for sharing common interest/passion/skills/knowledge exists: for example, common technological expertise among maintenance engineers, or success/failure experiences of designing a common machine among designers. You have to find such key opportunities to connect people and share knowledge that can make a difference. In other words, this is pre-setting of the domain of the COP that attracts people with the common interest/needs. 2.      Invite passionate people and take in their thoughts: To design a good COP, you need key people (2-3 are quite enough to start) who play a role of steward in the COP. He or she is usually very passionate (and often knowledgeable) on the subject that is a central focus of the COP. Then you discuss the COP design with them with the following focuses:- What is the strategic context of the COP?- What is the key knowledge to share and create?- Who are potential participants benefiting from and contributing to the COP?- What are key activities that sustain vigor of the COP?- Where can community members physically (and virtually) interact?- What are key values for both the organization and participants?These key questions are closely connected to the three elements of COPs: domain, community, and activities. 3.      Launch the COP with socializing events: Development of any COP always start at people’s social relationship. If you don’t build trust relationship among participants, the COP will not work even it has rationale for sharing common knowledge. One easy way is to use existing social network, which is often becomes a core group of the COP, and expand it through face-to-face meeting. 4.      Create results through activities and share the stories: After launching the COP, you need key activities that sustain vigor as well as produce results of the community. The activities vary: could be codifying tacit key knowledge shared among veteran workers or sharing good experience through storytelling sessions. The important part is you need to establish the first small result from the COP that can prove the value of the COP. Then you can expand the activities and attract more people by telling the success story. Ÿ   Key EnablersKey enablers of COPs depend upon the three elements of COPs: domain, community, and activities. For instance, if one of the key activities is to share success/failure real experience among engineers across various SMEs, probably passionate stewards and physical space for gathering together become very important. If you want to share daily activities among sales managers in different branches, you may need collaborative virtual workspaces. The followings are distinctive enablers for COPs.– Stewards: Key people who have passionate for the area and are willing to take care of the COP are the most important component of any COPs.– Incentives: In general, you do not need artificial incentive such as money or promotion. Instead, spontaneous motivation for continuous participation is essentially needed to sustain active COPs. Answers to problems participants face, growth opportunities, or just intellectual fun would be important.– Physical/virtual spaces: Since COPs are social, they need spaces where members can interact. It does not necessarily mean that COPs require exclusive rooms. It could be even virtual space if it can meet participants’ needs. Important aspect is that the center of COPs is human relationship built upon trust, and COPs require spaces where they can nurture such relationship.– Information Technology: Some COPs do not require any IT, whereas IT is key platform to share knowledge and do key activities for other COPs. Again, it depends on the three elements of COPs, domain, community, and activities.– Management’s support: If a COP has strong strategic purposes for an organization, management’s support is an important enabler. The support not only allows participants to understand the importance of COP activities but gives sufficient resources. If a COP has more spontaneous nature, too strong management support sometimes even harms motivation of members as they might think it is too controlled. In this case, the best support from management would be “hidden sponsorship” that accepts activities of COPs.

What is brainstorming?

Brainstorming is a simple way of helping a group of people to generate new and unusual ideas. The process is actually split into two phrase: divergence and convergence. During the divergent phase everyone agrees to delay their judgement. In other words, all ideas will be treated as valid. During the convergent phrase, the participants use their judgement, but do so in a ‘positive’ manner – looking for what they like about the ideas, before finding flaws.

Why use this tool?

Brainstorming is appropriate whenever you need to generate a range of options that go beyond the immediately obvious set. Examples might include:

• All the places one could gain customer insights from
• Different ways to learn from competitors
• New ways to use emerging internet tools to support our customers
• Different ways to reward employees for knowledge capture.

Brainstorms can be organised very quickly, and require very little in the way of material. The instructions (below) describe one method, but the tool is actually very resilient and the basic principles can be applied in many different ways.

How to brainstorm

1. Agree who will facilitate the activity
2. Make sure everyone is aware of the basic guidelines (see below)
3. Ideally, give everyone sticky notes and pens, so that they can write their ideas down.
4. Write the problem on a flipchart – or piece of paper, if you don’t have a flipchart – so that everyone can see it all the time
5. Ask everyone if they understand the problem, and whether there is anything that needs clarification?  Deal with any information needs, if required.
6. Potentially, have a group discussion about the criteria that will be used for idea selection.
7. Ask everyone to start writing down their ideas – one per sticky note – and hand them to the facilitator, who then sticks them on the flipchart.  If there are no sticky notes, ask people to shout out their ideas – one at a time – and the facilitator can write them down.
8. When the group has finally run out of ideas, take the flipchart page(s) and ask the group to:
   1. Look for duplicates, and combine them
   2. Vote (by putting dots, check marks or some other symbol) on their favourite X ideas (the number is determined by the requirements of the situation), based upon the criteria that were identified in the previous step
   3. Pick the highest rated ideas and have the group discuss how the ideas would be implemented – typically this involves identifying the critical next steps.

Guidelines for brainstormingDivergent stage:

1. Defer Judgement
2. Go for quantity
3. Seek wild and unusual ideas
4. Combine and associate
5. Write everything down 

Convergent stage:

1. Improve ideas as you go
2. Use affirmative judgement
3. Be deliberate
4. Seek novelty
5. Check with your objectives

When to use ………… (and when not)

Useful when there is a need to generate a relatively large number of options or ideas.  It is not appropriate when a problem is known to have a single correct solution that requires careful analysis to determine. For example, brainstorming about possible solutions to a mathematical problem would probably be a poor use of time.

Where to use ………….

Can be used in almost any situation where a group (2 or more people) can find a space to work together. This can be as simple as a shared desk with some blank pieces of paper.