Strategy workshops - rally the troops

Strategy remains a primary concern of senior management. Indeed, some would say the primary concern. But as business becomes ever more competitive, and growth more elusive, finding the time and space for strategic reflection is becoming
increasingly hard. So how do companies engage in strategic thinking?

The answer for a growing number of organisations is strategy workshops. According to research funded by the UK’s Advanced Institute for Management Research (AIM), almost 80% of UK organisations host strategy workshops at regular intervals.

The study of more than 1,300 executives, carried out in collaboration with Saïd Business School, the University of Southampton and the Chartered Management Institute, found that nearly half (46%) said their organisations had held strategy workshops at least once every 12 months and almost 80% claimed to have held workshops at regular intervals. The overwhelming majority of workshops were up to two days’ long (90%), held off-site (73%) and led by senior directors (61%).

These workshops ­ or corporate away days as they are sometimes known ­ typically involve taking a group of senior managers away from their normal working environment to a conference centre or a country hotel, to focus on the major issues facing the organisation. Often they involve outside experts ­ typically business academics or consultants ­ who provide alternative perspectives and facilitate the discussion.

It does make sense. Strategy creation, after all, is a combination of the analytical, the creative and the social. Yet, there are problems.

While most managers reported that workshops helped clarify strategy, there were some serious reservations about their outcomes. Indeed, many managers surveyed said that ‘away days’ fell short of expectations: one in 10 said the workshop they last attended failed to meet its objectives and over 40% reported either no or a negative impact on measurable outcomes including productivity, profitability and innovation.

The survey also showed little evidence of rigorous analysis of strategic issues. Of those organisations that do, SWOT (strengths weaknesses opportunities and threats) is by far the most common technique used, with few other strategy analysis tools employed. But there is little prior preparation for the workshops by those attending.

It was also clear that workshops were largely the province of senior executives:
few organisations involved lower level managers and other potentially significant stakeholders. The picture that emerges is that such events may be useful for
debating strategy at the top of organisations but may not always translate into actionable, measurable outcomes.

It is fair to suggest that the same would not be true for other events. If a group of sales representatives have a conference, senior managers would expect sales to improve or, at least, for there to be a coherent means of monitoring outcomes. Yet the same rigour does not seem to apply to senior managers’ strategy workshops, as evidenced by the limited impact on the bottom line and other key indicators of organisational success.

Despite this lack of measurement, the investment in strategy workshops is far from insignificant. The overall cost depends on where they are held, the length of time they take, the amount of pre-preparation, the use of consultants and the level of managers involved.

Nonetheless, according to estimates, the cost of a strategy workshop typically ranges between £10,000 and £50,000. And it’s not uncommon for some organisations ­ especially larger ones ­ to hold a series of four or more workshops on the same theme.

So organisations are clearly investing considerable time and resources in strategy workshops as a means of challenging and developing their strategies and with this comes high expectations. But, given the reservations indicated by the research, some key issues need to be addressed if they are going to get better value from the process.

Overall, it is clear that strategy workshops are a very common managerial practice that is little understood. The AIM research, which is at an early stage, suggests a series of questions that need to be addressed and sets the scene for greater understanding of whether or how strategy workshops really make a difference.

Research in strategy development has examined the extent to which strategies are ‘ carefully planned and designed, or emerge from the political and cultural processes of the organisation.

Strategy workshops seem to be forums in which both aspects of strategy development are in evidence; there are elements of design but drawing heavily on managerial experience within a social setting. Potentially, this could be a very effective strategy development forum, but there appear to be a number of critical issues.

There is a danger that workshops become an end in themselves, a top management ritual disengaged from the operations of the organisation. Clearly, there is an element of ritual to these events, but it is important to understand the behaviours required to go beyond the ritualistic, to achieve positive outcomes for the participants and the wider organisation.

Designing more effective workshops must depend on a clear idea of their purpose. For instance, an event with the aim of fostering internal communication of the board’s current strategic thinking ­- to communicate strategy -­ is different from one where the object of the exercise is to reconsider or challenge existing strategy or generate new ideas and solutions ­to create strategy.

The research suggest that the latter purposes are the primary raison d’être for workshops, with 47% and 46% of the sample respectively citing these purposes.

These different events are likely to require a mix of activities and processes to be effective. There is a need to understand more about the tools used and how they are used in workshops with different purposes. What makes for effective debate in such events? What means are most effective to challenge existing strategy and identify key strategic issues? What form of facilitation works best?

And who should attend events given their different purposes?

The major challenge that emerges, however, is how to translate the activities within the workshops to improved performance. It is likely that at least as much attention needs to be paid to how this potential gap can be bridged as to the design of the workshop itself. As yet, little is known about what makes for effective bridging.

It is also possible that the extent of the removal of such workshops from day-to-day operations itself contributes to the problem. The issue of attendance is likely to be important here, too. If the debates in workshops are not being translated into actionable outcomes, is there a problem of achieving the required buy in of those responsible for implementation by virtue of excluding them from the process in
many cases?

Strategy researchers have spent decades examining which strategies seem to work
best, or how strategic planning might be better done. It is now known that a good deal of strategy debate is centred on strategy workshops. The next stage must be to tackle the questions raised here to understand how such events can become more effective.

Professor Gerard P Hodgkinson and Professor Gerry Johnson are senior fellows
of the Advanced Institute for Management Research and authors of the report. A PDF of the research can be downloaded at: http://www.managers.org.uk/researchreports