Today's volatile environment sees financial institutions facing a turbulent inflationary market and a looming recession. This context accentuates the need for a more agile approach. To achieve this agility, it is critical that organisations focus and create strategic alignment with empowered, cross-functional teams.
A North Star strategy roadmap is a structural adaptation that can deliver extraordinary returns on customer growth, sales and profitability. FT Strategies has supported over 200 businesses in designing and implementing their North Star strategy roadmap. We’ve seen that this framework provides the clarity and focus of a single goal, while making it clear how individuals and teams can contribute towards it.
This blog will explore the best practice for creating a North Star, how to implement it within your organisation, and what results you can expect.
“If you could get all the people in an organisation rowing in the same direction, you could dominate any industry, in any market, against any competition, at any time” - Patrick Lencioni - The Five Dysfunctions of a Team: A Leadership Fable
North Star goals have been used across many industries to provide a singular focus
A North Star goal can be defined as a single shared and ambitious objective bringing clear, unambiguous focus to the destination you are aiming for. It's a powerful instrument to accelerate growth, align resources, and galvanise cross-functional teams.
The Financial Times credits the North Star framework with providing the focus that allowed the business to achieve the goal of 1M paying subscribers in 2019 (achieved a year early). The goal has been updated to 1.5m paying subscribers in 2023.
One example of a North Star goal comes from an FT Strategies client project. We partnered with an insurer offering flexible, comprehensive and affordable short term car insurance. We co-designed this goal: grow ‘earned premium’ by over 40% by the end of 2022.
We’ve created a checklist to help organisations create effective North Star goals
Your North Star goal should be:
- Single, specific and measurable, so that it acts as a vehicle for ambition. This sets it apart from a traditional business plan.
- Bold enough that it challenges you and your organisation. It is based on ambition, not just a calculated projection, with a cost for not meeting it. It should cause slight discomfort.
- Achievable enough to ensure that you don’t set yourself up for failure.
- Memorable enough to keep everyone focused (e.g. the number should be rounded).
- Aspirational and purposeful, so it can inspire the whole organisation on your journey.
- Time-bound (typically 3-5 years). This creates urgency whilst also recognising that times change.
North Star goals can focus on recognition, financial results, customer value or social benefit
North Star goals can generally be aligned to five primary categories: market recognition, financial target, value to the user, measurable achievement and finally social benefit.
- A market recognition example is HSBC’s ambition to “be the preferred international financial partner for our clients”.
- An example around hitting a financial target is Monzo’s intention “to be able to run each customer’s account for £0 (or positive)”.
- Spotify’s goal is preoccupied by providing value to the user; by “giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it”.
- A measurable achievement example is St James’s Place's aim to “grow our funds under management (FUM) over time”.
- A goal focused on providing a social benefit is the Santander Group’s desire to “be net zero by 2050, supported by first decarbonization targets”.
These five examples do not always strictly adhere to our checklist above - can you notice a difference? Which of the FT Strategies criteria do they not cover?
The North Star goal provides a starting point for a wider framework of outcomes, hypotheses and experiments
FT Strategies use our own framework to ensure that our client’s North Star goals lead to tangible results and true organisational change. The North Star cascades into outcomes, hypotheses and experiments. The images below demonstrate how our framework is structured, our definitions of each layer and how they coexist and work in unison.
The North Star framework can help your organisation align, prioritise and innovate
When implemented correctly, the North Star improves a company’s operational alignment, ability to prioritise, and willingness to innovate:
A. Organisational alignment
Defining a shared goal aligns resources in a single direction. Desired outcomes cut across departments and empower diverse parts of the organisation by connecting operational activities (and metrics) to the wider strategic context. This helps remove silos and increase collaboration between departments and teams.
B. Focused prioritisation
An outcome-driven approach funnels efforts and resources towards what truly matters, eliminating irrelevant tasks and providing your team with laser focus. This collective orientation makes for a more productive and collaborative journey.
C. Culture of experimentation
The North Star framework encourages your organisation to focus on hypotheses rather than tactics. This is key to an experimentation mindset, which considers hypotheses in terms of impact and risk and is willing to learn through iterative failures. If executed correctly, experimentation can accelerate learning, lower uncertainty and risk, save money, promote customer-centricity and build a data-driven culture.
“The only way you are going to have success is to have lots of failures first” - Google co-founder Sergey Brin.
We’ve created an action plan that we use to help clients implement a North Star
- Design workshops to co-develop a goal, with senior leadership buy-in.
- Cascade sub-outcomes below, aligned to various business functions or strategic drivers.
- Create hypotheses for each sub-outcome, and define experiments to test each hypothesis.
- Translate the experiments into an actionable plan, visible across the firm, to track progress and monitor key initiatives identified as key to reaching the goal.
- Build a long-term capabilities roadmap to identity and improve upon your gaps in relevant technology, skills and processes.
- Establish a governance framework that manages the process and converts it into an organisational tool. Key governance principles include empowerment, collaboration, transparency and evidence (i.e. being data-driven).
How FT Strategies can help
FT Strategies is a consultancy with access to financial thought leadership from one of the world’s leading business news organisations. We have first-hand experience helping clients worldwide define their purpose, create alternative revenue models and use data to deepen their relationships with, and understanding of, their customer base. Now more than ever, your business needs to increase its operational resilience, put the customer first and prioritise objectives effectively. So, whether you’re at the beginning of your North Star journey or are looking to optimise an established strategy, we would be delighted to help you!
If you want to learn more, feel free to either reach out directly via [email protected] or listen to our North Star podcast: How to grow your digital revenue | Interview with the CDO of the Financial Times.
About the author
Zak is a Consultant at FT Strategies. He has experience in digital transformation and customer experience strategy design. With FT Strategies, he has supported clients in both Europe and North America in their efforts to improve their digital value propositions, build recurring revenues and become recognised as market leaders. Prior to FT Strategies, Zak was a Management Consultant at KPMG in their Customer & Digital team.
Zak holds a BSc from the University of Bath management school. Outside of work, Zak is passionate about helping underprivileged youth to bridge the aspirations-attainment gap. He recently participated in the Prince’s Trust Mosaic mentoring scheme.