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...

"Strategy is dead" RIP, and long live AGILE strategy!

Last week, the Wall St. Journal featured an article saying “Strategic Plans Lose Favor” with larger companies (read).

The article reports that companies like Home Depot, Spartan Motors, and (surprisingly!) Accenture think “Strategy, as we knew it, is dead.”

I say “Rest in peace!” -- for the sort of strategic planning that Accenture has specialized in, and that most larger companies have practiced.

Strategic planning can be, and has been, a massively analytical undertaking. Large consulting firms, like Accenture, can spend months of effort and hundreds of thousands of dollars developing an exquisitely detailed strategic plan based on massive analysis. Sometimes they’ll deliver it in nice leather binders so it looks great on the executives’ bookshelves.

In an economy with lots of surprises, such strategic plans can be obsolete before they’re printed.

One manufacturing company spent months developing a plan to achieve ambitious growth over a 3-year period. Within the first 2 quarters, sales dried up and they went into survival mode. As for the strategic plan? “Well, we haven’t looked at it in quite a while.”

So does that mean that strategic planning is dead, killed by the accelerating pace of change?

By no means! But the analytical behemoths may go extinct, while more agile approaches will flourish.

To be useful in turbulent and difficult times, strategic plans need to be flexible and adaptive, open to rapid learning from the environment.

If a strategic plan is not agile, it’s dead, worthless, money very poorly spent for “SPOTS” (Strategic Plan On The Shelf).

So how can a strategic plan be agile? See my next blog.

5 problems with reactive mode

“Failing to plan is planning to fail.” We all know, intuitively, that if we don’t make and follow some sort of plan, we get stuck in a reactive mode.

Operating reactively has five specific disadvantages or risks.

1) Progress is unknown. If we don’t know where we’re going, how would we know if we’re getting closer, or farther away?

2) Satisfaction is elusive. Absent knowledge of progress, the best that can be said of a day might be “Nothing went haywire that we couldn’t fix!” While that can be an expression of relief, it’s different from satisfaction.

3) Decision quality is at risk. Without the context and guidance of a known strategy or goal, there’s no way to be sure we make right decisions. We may guess right most of the time, but it’s riskier.

4) Attention is scattered. By necessity, we focus on the urgent – and that may not be what’s most important. Operating without plans or goals leads to more - and more varied - things becoming urgent, until we’re overwhelmed and barely coping.

5) Stress levels rise. Productivity in organizations is at a very high level, as members cope with a long season of “do more, with less” as the guiding principal. When members leave, survivors take on as much of their jobs as can’t be left undone. But how long is that sustainable?

So, what to do?

Plan your future to create it. Envision the future you want, map how to get there, set goals and achieve them.

Is it that simple?

See my next blog for that.