Strategic Factor System
Our method, called the Strategic Factor System, is based on identifying an organisation's or business unit's key stakeholders. These are organisations, business units and individuals with whom an organisation or business unit interacts and on whom it depends for success (e.g. customers, employees, owners, suppliers). It's called the 'Strategic Factor' System because the strategies and measures developed via it are based on the strategic factors relevant to an organisation's key stakeholders.
We invented the term 'strategic factors' to describe those few things that an organisation or business unit has to get right in order to succeed with its key stakeholders. They are not the same as 'critical success factors' or 'key result areas'.
The importance of approaching strategy development and performance measurement via stakeholders has been demonstrated by Procter and Gamble (P&G). In the words of A.G. Lafley when he took over as CEO:
"We won't succeed without a deep understanding of external stakeholders and their competing interests."
Does it work?
Well it did for P&G. When Lafley took over in 2000 P&G was the 31st largest company in sales and the 22nd largest company in profit among the US Fortune 500. In 2010 it is the 20th in sales and 9th in profit.
Further details on our Strategic Factor System can be found in the presentation given by Dr Graham Kenny to the US Academy of Management Conference (Word document).