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Strategic Planning with the Six Rings Model
This tool defines six elements of a strategic plan and shows their relationship and inter-dependence. This is a valuable tool to use in guiding the strategic planning process.
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Overview
The beauty of this strategic planning model is that you start in the first ring and work your way outward. Each ring provides a different perspective – or lens- with which to define your company. When one ring is done you move on to the next. It’s an iterative process: the work on one ring informs the work on the others. Each successively narrows the aperture and defines the specific ways in which the organization creates value for its owners and its customers.
List of Terms
Purpose: A succinct statement of why the organization exists and what it does.

Core Values: Qualities essential to the organization’s success – like sustainability or reliability.

Vision: A clear statement of a future result or end state that the organization wants to achieve.

Goals: The priorities for realizing the vision, purpose, and values.

Strategies: Key initiatives needed to achieve the goals.

Objectives: Measurable milestones toward achieving the goals.

Actions: Actions taken in support of objectives, with timelines and assignments of responsibility.

Performance Measures: Measures of success tied to the plan, consisting of metrics and targets.

Strategic plan: A document that consolidates these elements into a coherent whole.
The Six Rings Model looks the same whether you are Intel or a small start-up.
It all starts with defining purpose and core values. A vision then flows from these two. Together, they form the “strategic focus” and provide a litmus test for all other decision-making. 

Will we make this product? Yes, because it’s consistent with our strategic focus. Will we enter this market? No, because it conflicts with one of our core values.

In short, when you have a well-defined strategic focus, you can make sound, consistent decisions at all levels. Having the strategic focus is the first quantum leap that leaders make to build a leadership culture.
Once the strategic focus is defined, the next step is detailing the goals, objectives, and actions.
The last three rings (goals, objectives, and actions) show how to build the “strategic plan,” for implementing your vision. 

Objectives define the initiatives and milestones you need to hit in order to achieve the goals. Actions capture the specific steps, timetables and responsibilities for achieving the objectives. The senior leaders of the organization should take responsibility to articulate the Goals.

Leaders should be given responsibility to work with their departments and units to refine the Goals and tie them to specific Objectives and a coherent set of Action steps. This “cascade” effect enables every manager – and ultimately every employee – to connect what they do to the strategic plan.

Download the PDF:
The Stairway to Performance 
The First Ring: Purpose
Purpose is the first ring. It communicates why the organization exists. Purpose is fundamental. By clarifying purpose, you sharpen the direction of the entire organization. 

The test of a purpose is this:
  • Does it tell people why the organization exists and what it fundamentally does? 
  • Is it concise and easy to understand? 
  • Does it communicate by implication what you don’t do?
A company should know why it exists, right? Yet purpose can be exceedingly elusive to define. 
Disney and Merck have both struggled to reconcile their shareholders’ demands for quarterly profit growth with the goal of innovation, whether it be artistic excellence (Disney) or basic scientific research (Merck). Their purpose statements have provided them with needed clarity during these clashes.

A purpose statement doesn’t sum up everything that the organization does. It’s just the first ring. But it needs to be clear. Disney’s purpose is to make people happy. Southwest Airlines’ purpose is to provide low fares. That’s it. Clear and simple.

The Second Ring: Core Values
Core values define what is essential to the success of the organization. Let’s be sure everyone understands what I mean. For example, if I say my house has a lot of “value,” I mean it’s worth a lot of money. But that’s not the same as a core value. If I say: “What I value is my family,” I am stating what is of utmost importance to me. That begins to capture the meaning of “core values.”
When we talk about an organization’s “core values,” we’re referring to the things essential to its success, such as product reliability, customer satisfaction, financial success and ethical integrity. These are the values that the organization, if it could speak on its own behalf, would say are essential to its long-term success
Developing core values begins with exploring questions like these: “What did the people who came before us say? What do our founding documents say? What would someone who was acting in the best interest of this organization do to ensure its success?” This is the essence of John Rawls’s “neutral man” standard, which he articulated in his groundbreaking book A Theory of Justice. Defining your company’s core values means taking the time to engage in a deep exploration of what truly is essential to its success.

Download the PDF – Developing Core Values
The Third Ring: Vision
A clear vision sharpens the focus. It says “here’s our direction, here’s where we’re going, here’s how we’re going to change the world.” Southwest Airlines’ vision is to make air travel cheaper and more convenient than auto travel. Curves’ vision is to make it affordable and easy for women to be physically fit. HSBC Bank ’s vision is to be the world’s local bank. 

Great leaders build trust by defining vision. People want to know there’s a plan and direction.
Vision has two components.
The external vision defines the outcomes that the company wants to achieve. Sony’s vision in the 1950s was that “Fifty years from now, our brand name will be as well-known as any on earth." General Electric’s vision in the 1980s was “To become number one or number two in every market we serve.”

The second component is an internal vision of change. GE said it would “revolutionize the company to have the speed and agility of small enterprise.” Sony said it would “create innovative products that become pervasive around the world.” 

Download the PDF – Developing a Vision Statement
Vision Statement Examples
Southwest Airlines: To make air travel cheaper and more convenient than auto travel.

Curves: To make it affordable and easy for women to be physically fit. 

HSBC Bank: To be the world’s local bank. 

Amazon: To be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online. 

Avon Products: To be the company that best understands and satisfies the product, service and self-fulfillment needs of women – globally. 

Kraft Foods: Helping people around the world eat and live better. 

Macy’s: Our vision is to operate Macy’s and Bloomingdale’s as dynamic national brands while focusing on the customer offering in each store location. 

Toyota: To become the most successful and respected lift truck company in the U.S. 

Wal-Mart: Worldwide leader in retail. 

Microsoft: A personal computer in every home running Microsoft software. 

The Walt Disney Corporation: To make people happy. 
Link Vision to Strengths and Opportunities
Vision needs to be linked to a clear understanding of the strengths and assets of the organization along with the opportunities and threats in the marketplace. Occasionally it requires a full-scale revamping of the company’s business model. 

Typically, it can take months to develop a fully-understood and fully-realized vision.
The Fourth Ring: Goals
How do you define goals? Your goals should reflect what the organization needs to do to achieve its vision. If your vision includes expanding your product lines, then you’d want to set a goal around that. If your vision includes improving customer service, then your goals should reflect that priority. What’s important is being clear about the goals – they will frame the rest of your strategic plan. 

The senior leaders of the organization should take responsibility to articulate the goals. I think three or four goals are plenty. More than that, people cannot absorb. Once the organization has successfully executed on those priorities, then introduce more.

Related Blog – How to Measure Performance 
The Fifth Ring: Objectives
Objectives define the initiatives and milestones you need to hit in order to achieve the goals.

Let’s track one example. A grocery chain listed a set of objectives for a goal related to improving customer service
Goals
Make our culture one in which our employees take pride in delighting every customer, every time.
Objectives
 - Develop "wow" program
 - Implement "secret shopper" program
 - Conduct annual customer satisfaction survey
The Sixth Ring: Actions
Each of the actions steps was assigned to a specific individual with a specific timetable for implementation.
Goals
Make our culture one in which our employees take pride in delighting every customer, every time.
Objectives
Achieve 90% or better in annual customer satisfaction survey.
Actions
 - All managers and employees receive "wow" training. 
 - Provide "wow" feedback forms for customers.
 - Build "wow" bonus compensation program.
 - Roll out "secret shopper" program
 - Implement quarterly customer satisfaction survey. 
 - All managers review "wow" ratings on a monthly basis.
The company’s executive management team tracked the status of each action step at its Monday morning meeting.
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LRI consultants are experts in guiding executive teams through the strategic planning process: clarifying long-range vision and goals; giving voice to vision; shaping priorities; defining performance measures; and articulating related strategies and actions.

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