Fronteer OS3 – 3 simple steps for creating our new strategy
Disclaimer: nerdy holacracy buzz-words alert. The text below has some lingo not common to normal organisations.
I have written a few posts about the experiences we had implementing Holacracy since 2017. We have had a great ride so far. Together we created a team that is happy, working more autonomous and purposefully. Sounds good, right? On a daily basis, small and bigger improvements are made and many decisions are being taken, leading to action. Circles burst with energy. Lead links organise roles, facilitators host tacticals and everybody feels owner of (a part of) Fronteer. We even started introducing our way of working with clients.
Return on investment
But the question remains: does Holacracy deliver on normal company metrics? What about growth? Profitability? Competitive position? Reputation? Innovation?
In all honesty, the key question for a shareholder (one of my roles) is: does Holacracy create real impact? Are our financials healthy? Do we have a solid reputation and a thriving organisation ready for the future? Do we make impact in the market and on society? Are we a source of inspiration? Or was the old way of doing business better? And how could we compare? So many questions. The results since we started Holacracy are promising: we grew on average 20% each year in terms of revenue. We have solid profitability levels. But can we sustain this? In order to do so, we have a strategy. Like any other company. So far it seems to pay off, seeing the results.
“Culture eats strategy for breakfast”Peter Drucker
I thought it might be interesting to share how we create our own strategy – using the Holacratic principles. It is not a process in which we completely rethink everything we do, it is rather an evolutionary step. The value of this process lies not in the content per se. The tradition of creating a yearly strategy (with half-year updates) has meaning in itself. In the end, having an engaged and focused group of people might even be more important than having the ultimate strategy to win in the market. Because the reality is that more often than once, a new company strategy is created top-down, but ignored bottom-up – with all the negativity surrounding it.
Strategy creation process
One of the big tests for any organisation is: can it create and deliver on a strategy that is simple and powerful? The cool thing is: this is our job at Fronteer, at least we do it for our clients. We design processes to support our clients. Our approach is about framing the challenge, designing solutions and creating a strategy.
For ourselves we do it differently; we do it the holacratic way. What makes our approach holacratic? You could consider Holacracy as an operating system. The way we do things around here are our ‘apps’. These apps get updated; some frequent, some only once year, some never (our pub quiz during Christmas Dinner for example).
So how do we update our strategy? We do it once a year. The strategy is year-round available in Glassfrog, the online holacracy tool. Each circle has its own purpose, strategy and accountabilities. Roles within circles do the work. People fulfill roles in different circles, matching their skills, needs and growth path. We have one company circle, and nine main sub-circles. These ten circles get yearly updates. But how?
3 Simple steps to create a strategy
1. Shareholder directions
As part of the board (the super circle, in which the other circles sit), our shareholders kick off the new year by sharing a set of beliefs, opportunities and improvements with the entire team in the first week of January. Also, they create high-level targets. The board’s main purpose is to offer long-term growth perspective. The shareholders’ main purpose is to provide continuity to the company. In practice this means that the shareholders’ directions should be inspiring yet feasible. If the company has a tension with the directions, these will be addressed. When no tensions arise, the directions form the basis for strategy creation.
2. Circle strategies
Firstly, the company circle is updated, followed by the nine sub-circles. The main question is: what strategies do we need in order to make the right decisions, delivering on the shareholders’ directions and targets? This way, strategies are being created bottom-up, involving all the circles and roles along the way. A circle strategy meeting lasts on average 2 hours. In a final 3-hour meeting, all sub-circle strategies are shared, sometimes even accompanied by updated roles and accountabilities. Some even do a ‘purpose’ refresher – when needed. After this step, we have an updated GlassFrog with our new strategies.
3. Company focus
It is now the task of the company circle to create clarity and prioritise efforts. It is a final check with shareholder directions and given targets. This is then communicated back to the entire team again, so to all nine circles. This process helps circles to set priorities and avoids that people execute all their strategies without a clear end-goal in mind, losing themselves in small actions and not delivering on the main objectives. Bottom-up is great. Combine it with focus and it gets even better.
So, does holacracy deliver on its promise? What does the shareholder say?
Efficient and effective
When it comes to making a strategy, this is an efficient process. Holacracy delivers when you want to get 25 people on board whilst creating direction in an energetic way. Last year’s financial results were promising based on Fronteer OS2. We hope to meet or exceed these results with the updated Operating System: Fronteer OS3.
Autonomous and purposeful
The process enabled all team members to chip in and flourish. Lead links lead the strategy creation, circle members contribute to the content and Rep links present the outcomes to other circles. Especially the role of the Rep link is fundamental. This eliminates the problem of having a manager being the one-stop-shop for everything the team concerns.
Inclusive and inspiring
While listening to each others’ stories, people learn a lot. They make connections and get new ideas for their own work. With a more united and energised team as a result.
Is it all great? No..
It takes time and mostly discipline to create a strategy like this. You need trained and focused people to be able to deliver. It takes time away from ‘normal work’, which leads to increased pressure on people. Also, since it is an update based on shareholder’s directions, it eliminates the opportunity for the team to rethink our strategy afresh. I guess the only conclusion is that when creating Fronteer OS4 we should be open to revisit our own process again.
Lastly: a few tips to make this process relatively painless:
- Have a clear and safe process, ran by a Holacracy coach (role at Fronteer)
- Share a template, for each circle to follow
- Take sufficient time, but not too long (we took 1 month for phase 1 and 2)
- Celebrate success (while looking back)
- Trust the circles to execute upon their own strategy