1. Discipline I: Decide What’s Important
REMINDER: START RECORDING
Welcome, and thank you for joining us today for our webinar “Six Disciplines, Discipline I: Decide What’s Important”
My name is Matt Lauth, I am the managing partner at Strategy Execution Advisors and I’ll be hosting the webinar today.
Before we get started I’d like to ask everyone a few questions:
October 28, 2011

2. Discipline I: Decide What’s Important
Cost: $0; complimentary
Leadership must define clear direction for the organization. Discipline I - Decide What's Important is all about strategy. During this webinar we'll review each step of Discipline I and show you how to apply it to your organization. In this webinar you'll learn how to:
1. What does "decide what's important" mean?
2. How to renew mission.
3. How to reconnect with core values.
4. What is a strategic position statement and why do I need one?
5. What is a good definition for vision and what does it look like?
6. What is a "stop list" and why is it important?
7. How can I do this in my organization.
This is 1 hour of your time that will give you the information needed to develop a strong strategy.
We have a lot to cover, to get started I would like to quickly reconnect with what we promised to provide you during our webinar today.
If you have questions, please submit them using the question panel at the bottom of the GoToWebinar application, along the right side of your screen.

3. My Goals for Today
Leaders – understand the steps and sequence of steps in developing a well-formed strategy
Owners/Investors – to lower risk and increase return through a solid approach to strategic planning.
Advisors – to understand the benefits of helping your clients form better strategy by following a repeatable process.
Here are the goals I have for today.
For business leaders I want you to understand the steps, and sequence of steps, to create a well-formed strategy.
For owners, or investors in businesses, I want you to leave with the understanding of how better planning lowers your risk and increases the return potential for the capital you are putting to work.
And for business advisors, to understand the benefits your clients will gain by having a defined, repeatable process to strategic/annual planning.

4. CEO Challenges Direction… Accountability…
“focus in unclear, opportunities are overwhelming”
Accountability…
“things that should get done, don’t get done”
Engagement…
“people don’t seem to care as much”
Control…
“Things ‘feel’ out of synch”
Transition…
“a desire to pass the torch successfully”
Alignment…
“people aren’t on the same page”
Quality…
“product and service levels are diminishing”
Here are few of the thoughts running through the mind of senior leader. All of these thoughts are rooted in strategy – the formation of where the organization wants to go.
They cover direction, succession, alignment, accountability, quality and engagement.
Frustration…
“we should be
doing better”

5. Growth Limiters
No matter what industry or type of organization you are in, there are three basic limiters to growth: alignment, communication and accountability. Strategy is the foundation for address these three limiters to growth.

6. Process/Approach is Public Knowledge
Strategy formation is part of a broader process called strategy execution. It’s the basis for two books written by Gary Harpst.
Too often strategy, or strategic planning is seen as an activity.

7. Six Disciplines is a business management system designed to systematize and streamline planning and execution for increased performance.
As a backdrop to our discussions today, I first want you to understand what Six Disciplines is. It’s a business management system that automates the process for forming and executing business plans for increased performance.
It’s based on a defined methodology, technology/software and coaching to achieve performance excellence.

8. Strategy Best Practices
Have a Process
Set a Timeline
Involve all Senior Leaders
Professional Facilitated
Here’s a shortlist of the common best practices I feel are necessary to create well-formed strategy.

9. Organizational Balance
Balanced and predictable success are the traits of high performing organizations. This is gained through a balanced approach to creating well-formed strategy and a disciplined approach to executing the strategic plan of the organization.

10. Obstacles to Strategy Execution
There are many obstacles that get in our way….here’s a list from a Gartner study.
Poor strategy is #5, many of the issues deal with the implementation of the strategy.
Obstacles to the strategy execution process, joint research, Wharton School, Gartner Group, 2003, All Rights Reserved

11. Prevent/Close the Gap
Well-formed strategy will ensure the gap between capabilities and challenges is closed. Too often organizations, through growth, outpace their ability to execute. This is what is meant by having a balance to strategy formation and strategy execution.

12. Impact of Strategy
The impact of getting strategy right has a huge financial impact. Get it right and it’s a huge gain, get it wrong and it can negatively affect the organization for decades.
Comparing to the software industry, getting it right at requirements (strategy) has 80 times return.
The relative cost to fix errors in software development.

13. Defining the Process Why Where What How Who When
What we need is a process to connect our mission, strategic position and vision to the activities of everyone in the organization. The strategic plan covers the top section of this diagram, deciding where the organization is headed (journey) and what it will look like when it gets there (destination).
When

14. The Process I Recommend
A. Renew Mission
B. Renew Values
C. Renew Strategic Position
D. Renew Vision
E. Define VFOs
F. Agree What to Stop
A. Define Measures
B. Define Targets
C. Define Initiatives
D. Engage the Team
A. Identify Misalignments
B. Align Processes
C. Align Policies
D. Align Measures
E. Align Technology
F. Align People
A. Define IPs Quarterly
B. Review IPs Weekly
C. Rate IPs Quarterly
D. Prioritize Daily
E. Monitor Measures
A. Brainstorm
B. 100-Point Exercise
C. Quick-ROI Analysis
D. 5-Step Problem Solving
E. Champion Your Ideas
F. Recognize Contribution
A. Review Externals
B. Review Internals
C. Recap SWOT
D. Review Individuals
ANNUAL
(4-8 hrs., 6 weeks before year end)
(4-8 hrs., 5 weeks before year end)
ON-GOING
(4-8 hrs., 7 weeks before year end)
QUARTERLY & WEEKLY
(4-8 hrs., 4 weeks before year end)
The Six Disciplines process has 6 fundamental steps and 31 detailed steps. The process focuses on both plan formation and plan implementation, or what I like to call strategy execution.

15. Strategy – Decide What’s Important
ANNUAL
(4-8 hrs., 6 weeks before year end)
(4-8 hrs., 5 weeks before year end)
ON-GOING
(4-8 hrs., 7 weeks before year end)
QUARTERLY & WEEKLY
(4-8 hrs., 4 weeks before year end)
A. Define Measures
B. Define Targets
C. Define Initiatives
D. Engage the Team
A. Identify Misalignments
B. Align Processes
C. Align Policies
D. Align Measures
E. Align Technology
F. Align People
A. Define IPs Quarterly
B. Review IPs Weekly
C. Rate IPs Quarterly
D. Prioritize Daily
E. Monitor Measures
A. Brainstorm
B. 100-Point Exercise
C. Quick-ROI Analysis
D. 5-Step Problem Solving
E. Champion Your Ideas
F. Recognize Contribution
A. Review Externals
B. Review Internals
C. Recap SWOT
D. Review Individuals
A. Mission
B. Values
C. Strategic Position
D. Vision - Where
E. Define VFOs - What
F. Agree What to Stop
ANNUAL
(4-8 hrs., 6 weeks before year end)
Discipline I, Decide What’s Important is where the strategic discussion occurs. This discipline has 6 key steps:
Renew Mission
Renew Values
Renew Strategic Position
Renew Vision
Define Vital Few Objectives
Agree What to Stop
This addresses the “why”, “where” and “what” of the organization.

16. Decide What’s Important
This diagram illustrates the learning inputs that come from Discipline VI (Step Back) along with the review and renewing of the key drivers of the organization. The output will be an update to the key objectives of the organization and a list of activities to stop.

17. Learning Inputs to Strategy
Voice of the Customer
Voice of the Employee
Voices of Other Stakeholders
Assessment of Past Performance
Assessment of Your Market
Assessment of Your Competition
Assessment of Your Team (capabilities)
A well planned discussion on strategy requires inputs based on the realities facing the organization.
They include:
Voice of the Customer
Voice of the Employee
Voices of Other Stakeholders
Assessment of Past Performance
Assessment of Your Market
Assessment of Your Competition
Assessment of Your Team (capabilities)
This is all part of Disciplines VI, step back and will be covered in detail in an upcoming webinar on December 6th.
Covered as part of Discipline VI, Step Back, webinar on December 6, 2011.

18. Renew Mission
A company’s mission explains why an organization exists and what its purpose is. Purpose should be enduring – something the pursuit of which is limitless.
The purpose of renewing mission is to make sure that, before establishing long-term priorities, the leadership team has a clear understanding of what the mission of the organization is – the pursuit.
Must be authentic
Will it be valid 20 or 30 years, or even longer?
Is it understandable? Keep it short and simple
Put the energy into living it, communicate it through your actions.
Focused on “why” not “how”. How is strategy and will change over time.
Basis for engaging the workforce, you want people who want to join you on your mission.
Let’s look at each of the steps of Discipline I in detail.
First is a renewal of mission.

19. Renew Values
Mission answers the question of “why” an organization exists, values speak to the character or personality of the organization..
Based on what is already important to you.
Must be enduring.
Keep the list short.
Live your values.
Emphasize values when recruiting new employees.
Every organization has values whether defined or not.
Next is a renew of values.

20. Renew Strategic Position
Long-term business success is rooted in the ability to build and sustain a product or service offering that is different than that of rivals, and different in ways that are important to customers.
For a strategic position to be sustainable, the detailed activities required to deliver it must be different.
Keep the description simple.
It should be long-term, 10+ years.
Provides consistency to annual planning.
Activities outside the strategic position should be questioned.
Operational efficiency is about improving the processes that support the strategic position.
One page: short description, detailed description, bullet-list of characteristics.
Next, a renewal of strategic position.

21. Renew Vision
Mission and values paint the longest-term picture of the organization – it’s purpose and character. Strategic position then defines the longest-term view of where strategy is to lead.
The purpose of the vision statement is to help develop a more concrete picture of what the company will look like in ten years, in pursuit of the mission and strategic position.
Vision is not a plan.
Shouldn’t be revised every year, serves to stretch and challenge.
Keep the vision statement short.
Follow the Be – Do – Have model to describe the vision.
Next a renewal of vision.

22. Define Vital Few Objectives
Vital Few Objectives (VFOs) are the “big rocks” the organization needs to accomplish over the next 1 to 3 years to support the vision and strategic position. These objectives are the foundation for a balanced scorecard and should address the four key dimensions of the organization: people, process, customer, financial.
Keep number of objectives small (less than 10 usually)
Define in simple terms
Eliminate conflicts
Defer “how” to identifying measures and targets
The objectives should tell the story about the organization.
The fifth step is defining the vital few objectives of the organization.

23. Agree What to Stop
The essence of strategy is deciding what not to do. By having clarity to your mission, values, strategic position, vision and key objectives, you can determine what activities should be stopped.
The importance of stopping activities is to bring focus and free resources.
Don’t be all things to all people.
Free resource to focus on more important activities.
Empower your employees.
Think in terms of three categories: critical, discretionary and available for reassignment.
Some items can be stopped immediately, others take a concerted effort, or plan, to stop.
The final step is agreeing on what activities can be stopped.

24. First Year Planning Timeline
Measure/Grade Card
Workshop
Send Stakeholder
Surveys
Engage the Team
Meeting
Individual Plan
Finalization
Client Kick-Off
Meeting
Distribute Survey
Results
Initiative
Finalization Wk 1 Wk 2 Wk 3 Wk 4 Wk 5 Wk 6 Wk 7 Wk 8 Wk 9
Start Stakeholder
Survey Process
Alignment
Planning Session
(2 days)
Individual Plan
Workshops
Goals Statement
Finalization
The following timeline is what I use with clients. The left half of this covers the learning and strategy discussion.
Finalize Stakeholder Survey Results
Initiative
Workshop(s)

25. A great benefit of the Six Disciplines Program is all the results are captured and documented systematically. This allows a common system for all the plans of the organization and all the supporting documentation of the plans.
This slide is showing the Balanced Score Card that was created as part of the strategic planning discussion. Each goal supporting the overall strategy is clearly defined, has an owner, measure and milepost targets. This dashboard will then be used to measure the performance of the organization as the plans are executed.
This allows the defining of detailed plans which is covered in Discipline II – Set Goals that Lead.

26. Learn More About the Six Disciplines Process

27. For more information and to register, visit:
Upcoming Webinars
October 21th: Excellence in Annual Planning
October 28th: Discipline I – Decide What’s Important
November 3rd: Discipline II – Set Goals That Lead
November 8th: Discipline III – Align Systems
November 15th: Discipline IV – Work the Plan
November 30th: Discipline V – Innovate Purposefully
December 6th: Discipline VI – Step Back
The upcoming webinars cover each of the remaining disciplines in great detail. Here’s a list of the upcoming webinars. You can visit our website to learn more and to register.
Past webinars have been recorded and will be uploaded to the website.
For more information and to register, visit:

28. Strategy Execution Services
Strategic/Annual Plan Facilitation
- $5 - $10k (based size/complexity)
Strategy Implementation/Execution System.
- $50 per user per month
Leadership Coaching
- Time-based
Before we open the webinar up to questions I would like to share with you more about the services my organization offers.
Performance is about setting a well-thought-out plan and executing that plan. We offer there core services:
Strategic Planning Facilitation
Strategy Execution
Leadership Coaching
If you would like to learn more please contact me.
Now let’s answer your questions.
Interested in learning more?
Matt Lauth,

29. Thank You! Matt Lauth mlauth@sxadvisors.com (419) 348-8046
Thank you for attending today’s webcast. Here’s my contact information if you’d like to reach me.
When the webinar ends you will be given a short 4-question survey. I would appreciate it very much if you could take the time to give your feedback in order to improve future webinars.
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Matt Lauth
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