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Don’t omit this crucial detail from your strategic roadmap: the first step

Improving your company’s performance sufficiently to vault you past your competitors requires big strategic moves. And every big move starts with a first step.

Coleads the Strategy & Corporate Finance Practice globally and is one of the firm's most experienced client counselors on issues of strategy, growth, and business transformation in emerging markets

Surprisingly, this is where even veteran chairmen and CEOs sometimes get stuck. They have grand visions of outcomes and performance levels. Industry leadership is presumed. But many run into a problem: There is no link between that long-term vision and the actual moves required to realize it—and, in particular, no link to the first step needed to begin moving in the right direction.

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Without that explicit marker, most managers will listen to the vision, then develop the incremental plans they deem doable. Those plans may get the company onto a new path, but not necessarily the one that reaches the vision or realizes the full potential of the business.

To avoid this scenario, you must break down the moves the strategy calls for into intermediate goals: missions that are realistically achievable within a meaningful timeframe. Asking your team to split goals into smaller, doable steps will not only force managers to get very practical about what to do next but also give you a roadmap to check whether they are on track to success.

Don’t omit this crucial detail from your strategic roadmap: the first step
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Focus on the first step

Richard Rumelt, strategy professor at the University of California Los Angeles, notes that one of the true arts of strategy is determining the “proximate goal”—the best thing you can do now within your capabilities and constraints to advance your strategy. I couldn’t agree more. It’s easy to confuse long-range planning with long-range actions. We leave the strategy room with a warm glow about all the things we’re going to do—one day. But we know the only thing we can really control is what is done now, and this is the sharp point of strategy.

You need to work back from the destination and set milestone markers. Break the journey down into six-month increments. Then test: Is what I need to do in the first six months possible? If the first step isn’t doable, the rest of the plan is bunk.

One insurance CEO worked on a vision with his team that concluded there would be no paper in the insurance business within a decade. But when he asked for the annual plan, paper consumption was set to increase. So he asked his team: To connect to the vision, would it be viable to have at least flat paper usage that year and then plan to go down the following year? Of course, the team couldn’t say no, and by framing a first-step question the CEO forced the strategy.

At first, focus more on actions than results

The first check-in on the strategy’s progress should be more about whether the first steps have been taken than about “show me the money.” Performance conversations focused excessively on financial results put too much emphasis on lagging indicators—the equivalent of looking in the rear-view mirror. It is what’s coming up that you need to plan for. McKinsey experts on corporate restructuring spend much of their time checking that actions have been taken and milestones reached.

Mobilize early resources

You should divide long-term goals into clear, operational metrics, and then confirm that initiatives have been given appropriate resources. I can’t tell you how many times I’ve discussed strategic initiatives with clients, such as new growth businesses, but when I ask about staffing, the leaders say they haven’t put any in place. You might want to think about organizing a series of “agile sprints” to get initiatives moving. Making sure that resources and people are lined up against the key initiatives is maybe the most important element in giving a sound strategy strong odds of success.

It’s heartening that many organizations seem well on their way to implementing this shift in their strategic planning process. This is particularly true for focusing more on actions than results in the early stages. Our recent survey of client executives found that 84% of respondents feel their companies have put this shift into the middle or high gear, though most of those are in middle.

Don’t omit this crucial detail from your strategic roadmap: the first step
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Since the start of the year, my colleagues Sven Smit and Chris Bradley, and I have been writing about ways to make your strategy produce results that outperform the broader market. The eight shifts we’ve described in our most recent blogs should increase your chances of adapting your strategy process so you can overcome the social side of strategy and execute the necessary big moves. But keep in mind that these shifts are a package deal: If you don’t pursue all of them together, you open the field to new social games.

Don’t omit this crucial detail from your strategic roadmap: the first step
We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: McKinsey_Website_Accessibility@mckinsey.com

Martin Hirt is a senior partner in our Greater China office, co-leader of our Strategy and Corporate Finance Practice, and co-author of Strategy Beyond the Hockey Stick with Sven Smit and Chris Bradley.

This article originally appeared on LinkedIn.

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