Strategy - Who cares? What's it worth?

Strategy has gone through ups and downs, ins and outs historically.  From the graduate school course I've taught on it, it has cycled through periods where companies spend massive resources gathering data, reporting up in endless detail, and creating strategy, all the way to periods where some companies rejected the idea of having one at all (we seem to be closer to that, now).


An article in Harvard Business Review said "It’s a dirty little secret: Most executives cannot articulate the objective, scope, and advantage of their business in a simple statement. If they can’t, neither can anyone else" (Collis & Ruskad, 2008, p. 83).

So what?  What's lost if most people in the organization couldn't say what the strategy is?

A couple of important things - coherent decision-making at the right levels, and alignment.

Coherent decision-making means that everyone who might have to make a decision knows the direction and priorities.  That reduces waste of precious resources (like the leader's time!), and costly errors.

Alignment is a subtler benefit.  When everyone knows where the organization's heading, and why, and that direction and strategy mean something to the people in the organization who have to make it happen, better engagement happens.  The work means something, so people stick around, give more of themselves, care about quality and customers, and work together to achieve more.

Employee engagement is at an all-time low.  Some estimate that most people would leave their current jobs if they could find another one tomorrow.  What sort of performance does that mean?

So, if an organization doesn't have a strategy, or its members could not say what it is, where do you start?

That's in next week's blog...

Nice article on bad strategy

McKenzie Quarterly's June issue has a good article on bad strategy that got me thinking about the "7 Strategy Mistakes" I'm presenting in late July. Some of what the article lists is also what's in the presentation.

The article lists the hallmarks of bad strategy are failure to face the problem, mistaking goals for strategy, bad objectives (fuzzy or "blue sky"), and fluff.

The article attributes the abundance of bad strategy to inability to decide, and to following a template-style strategy.

It's on the last point, his assertion that templating the vision, mission, values, and strategies always leads to empty rhetoric and fluff, that I believe the author is mistaken.

Of course, using a template poorly can go wrong .  If an organization found a strategy self-help website and approached it as if playing "buzzword Mad-Libs" they'll get meaningless fluff.  In the worst cases I've seen, they may work on it so hard and so long that they start to think it's beautiful -- often to the amusement of others.  What a waste when it goes astray like that!

But when leaders develop strategy well, they ...

• answer the hard questions in an honest SWOT,
• do the hard homework of figuring out who's the real competition and how to beat them, 
• do a cold-eyed, realistic assessment of the changing market
• make a coherent plan for using talent, finance, resources...

AND when they also really revisit the Why are we here? questions of vision, mission, and values (sometimes with help, when that's not a skill that the leaders start with) - then they can also engage the hearts, minds, and full talents of the organization.

Because the most brilliantly conceived competitive strategy won't make much difference if the organization isn't aware, aligned, accountable, and committed to it.

The article from McKenzie Quarter can be found at http://www.mckinseyquarterly.com/The_perils_of_bad_strategy_2826

First Blog post - on radio about strategy and engagement

On Wednesday, November 4, I'll be on the Peter McClellan radio show from 5-6 PM on AM 1570, streaming online at business1570.com.

Being there, and posting this, and cross referencing it in Twitter and Facebook, is my foray into the new world of social media marketing.

I've held back from doing this for a while, with the nagging question in my mind "Does the world really need another blog?"

But I've come to believe that there are a few things that are well worth talking about, putting out there for public dialog and interaction, holding up for examination from a critical and maybe unique perspective.

So tomorrow what Peter and I will be talking about will be getting ready for the recovery with strategic planning and alignment. There will be other topics, including sales force development, employee engagement, assessment, and (following the Scottish theme of the show) haggis...

The last season in the economy has been hard on a lot of companies, large and small. Some have shed employees to save costs, some have retrenched, some have gone under; nearly all have struggled.

There's reason for hope - the news today reports some increases in manufacturing, and estimates of when the recovery will start to pick up get closer and closer.

At some point in the future (hopefully the near future), demand for the products and services will start to pick up. The pace of business will accelerate as the economy rebounds.

But there's a real risk at this moment, I think - one that reminds me of those old "Road Runner" cartoons where Wile E. Coyote's gone over the cliff, still spinning his legs, not falling... until he looks down.

For some companies, that have gone through layoffs - with the resulting burnout and changed culture among the "survivors" - there's a potential crisis of confidence among the best performers. If they are not engaged, if they don't know why they're coming to work in the morning, or what difference their own job makes in taking the company where they want to work toward where it needs to go.

People need to know why they come to work - beyond just collecting a paycheck and doing what's required.

They need to understand where the organization is going, feel a part of a worthy endeavor, and see the connection between their contribution of talent and effort and organizational goals that are worth it.

If the strategy hasn't changed in several years, or if it's unknown, or disbelieved, or clearly not working, people won't buy into it, and they won't give their best. Having no strategy, or one that doesn't fit reality, leads to cynicism and lack of faith.

And burnout, cynicism, skepticism about the organization's future may have a very bad (and not widely expected) impact: The best people in the organization will start looking for other work exactly when they're needed most.

What if, instead, organizations can muster the wisdom and focus to re-engage in a systematic strategic planning process? What if it's clear to all that the leadership is planning to take the organization in directions that its people can believe in? What if they take the strategy throughout the organization, so that everybody knows where the organization's going, and wants to go along?

Maybe that will be a key difference between the companies that are able to step up to the coming recovery, with their people engaged and giving their best, and those that get surprised by the loss of key talent at the moment they're needed most.