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When Did Strategy Become a Four Letter Word?

After several meetings and discussions with colleagues and business leaders over the past few weeks, I’ve come to the sobering realization that strategy and, more specifically, strategic planning, has developed a bad name out there. More and more frequently, I seem to receive friendly advice telling me not to use the “S word” because it turns business people off. Just call it something else, or better yet, don’t talk about it at all they say – just convince “them” to do it without naming it strategy/strategic planning.

The unfortunate reality seems to be that, in many cases, executives and business leaders deal with strategy making and management because they know they should but they do so with a hesitation based in a real dislike for the process and the resulting plan (and distractions) it produces.    

Now, for me, someone who feels passionately about the value of strategy formulation and execution in driving higher levels of organizational performance success and more sustainable business results achievement, it’s really confusing, and worrisome, to think that strategy has become a dirty word in our businesses and organizations. So, I began to think about it and found myself wondering: Why is this the case? What is turning business leaders off?

How did strategy become a four letter word?

This is what I came up with.

 

1. Strategic planning can feel like a waste of time

The Problem: In a rapidly changing business environment, strategic plans are often out of date before they are rolled out. When this is the case, it’s easy to start to question the time, effort, expense incurred, and value associated with strategic planning activities. As a result, some organizations are swearing off the 3 – 5 year strategic plan and opting to complete 90 day plans that are really more tactical than strategic.     

The Root Cause of the Problem: The traditional approach to strategic planning no longer works in this dynamic business environment -

● It takes too long (6 months from start to plan production is simply too much time);

● It is too reliant on historical data (which doesn’t really help you move forward in uncharted waters) and doesn’t involve the people who know how the business really works in the strategy creation process;

● The plan it produces, as well as the annual planning cycle approach, aren’t dynamic and agile to change (reducing the relevance of the strategic plan as an effective business management tool) and the plan often ends up sitting on the shelf;

● The strategic plan is often a short to mid-term tactical plan that isn’t guaranteed to move the organization forward towards its long-term business goals; and

● No one in the organization (often including the executives that created the plan) really understands how to implement the strategic plan locally/in their everyday work activities (largely because it is written at a very high level and, though it seems to make sense, it’s unclear what implementation looks like below the corporate or executive level).    

The Turnaround Plan: Changing times require a different approach to strategy creation/formulation – one that works with, rather than against, a dynamic, often unpredictable business environment while still helping to chart a clear and understandable path towards the ultimate business goals of the organization. This new strategic planning process -

● Must be completed in weeks, not months;

● Leverages some data but is more reliant on their interpretation by, and the wisdom and intuition of, a broad range of stakeholders, including employees and key business partners, who participate hands on in the planning process;

● May involve an annual planning event but focuses more on quarterly strategy progress review and refresh/refinement sessions AND has mechanisms to identify, make and incorporate, and communicate required changes in the business strategy quickly, effectively, and efficiently at any time so that the strategic plan is always relevant; and

● Clearly lays out the long-term strategy to achieve the organization’s mission and vision AND both the mid-term (3 – 5 years) and short-term (12 – 18 months) business priorities, within the context of the long-term strategy, in an accessible roadmap format so that all employees and stakeholders understand what the key elements of the strategy are and what they look like in action. 

How to Learn to Like Strategic Planning Again: Drop the traditional approach to strategic planning and start formulating strategy using a fresher, faster, more dynamic, and agile approach.  

 

2. Strategic planning/formal plans introduce too much structure into the way we work

The Problem: While some people like process and structure, many do not. Strategic planning is a process that often produces a fairly prescriptive plan. As a result, those who have a more spontaneous approach to management can struggle with the rigor demanded by strategic planning.

The Root Cause of the Problem: On the surface, there are many perceived characteristics of strategic planning that seem to turn people off –

● Strategic planning is a deliberate process that is followed by a group of people to produce a certain result – if you dislike following processes, you probably won’t like strategic planning much;

● Strategic planning activities can be highly data driven with little to no opportunity for intuition and insights from a broad range of sources to make their way into the process – this makes strategic planning feel like a clinical process that is disconnected from the day to day realities of the business at the front lines; and

● A documented strategic plan can feel like it limits your options for individual creativity and innovation in your work.

While I see these concerns from time to time, and hear them presented as a rationale for disliking strategic planning, I think that they are really just convenient excuses. What I think is the true root cause driver here is a reluctance to (1) commit to a plan, (2) work together with others to implement the plan, including planning and possibly modifying personal actions based on their impact on others, and (3) be held accountable for one’s part in the successful completion of the plan and the achievement of targeted business results. Working with a strategic plan requires all this of everyone in the organization – no wonder it can feel like a scary proposition that is best to be avoided.  

The Turnaround Plan: Overcoming this particular problem requires a fundamental change in organizational beliefs and attitudes about strategic planning. To achieve this goal, co-operation is required from three sources which must be aligned with, and designed to support, the goal of helping people embrace the strategic planning process and its associated discipline.

Organizational and Management Processes 

● Business leaders, managers, and employees must commit to: adopting a strategic planning process that provides some structure and produces the desired results, follow and improve it moving forward, and stick with it over the long-term;

● Add strategic planning process and discipline to your organization but resist the temptation to go too far - the key is to add just enough structure to ensure that everyone is moving forward together in the same direction but not so much that there isn’t room for innovation and creative thinking, at all levels of the organization, about the best way to implement the strategy and get the organization to its intended goals;

● Management processes must integrate seamlessly with the strategic planning process, and the resulting plan, so that the business strategy (including strategy formulation and execution) becomes just a part of the way the organization works every day;

Supports and Rewards

● The organization must support business leaders, managers, and employees in their efforts to work on and within the strategic plan – this includes facilitating their involvement in the process by giving them the time away from their work to participate, and providing them with back up on the job;

● Business leaders, managers, and employees must be rewarded and recognized when they demonstrate the desired new attitudes and behaviors – this reinforcement helps sustain change across the entire organization; and

Leadership Behaviors

● Business leaders, managers, and employees must walk the talk and model the desired behavior at all times.

How to Learn to Like Strategic Planning Again: Focus on creating an organization, from top to bottom, that embraces the structure strategic planning provides and the commitment it demands.

   

3. The strategy execution failure rate is high

The Problem: Statistics have shown that the majority of organizations fail to actually do what their strategic plan says they’re going to do, so, many think: “Why bother planning in the first place?”

The Root Cause of the Problem: While strategy execution failure is a complex problem, there are typically four critical stumbling blocks that exist in the majority of cases including:

● Lack of employee buy-in for the plan;

● An unclear strategy execution roadmap;

● Unclear ownership accountabilities or no accountability framework; and

● Low levels of organizational alignment with the business strategy (including core processes and strategic projects, human resources and their skills and capabilities, and the plans (e.g. learning and development/human capital plans), tools and technologies, and resources (including budget dollars) that support the work being completed) 

The Turnaround Plan: Steps can be taken during the strategic planning process to reduce or prevent strategy execution problems including:

● Involving employees (as members of the strategic planning working team) in a meaningful way in the strategy creation process including making decisions in the key elements of the strategy and what they look like in action;

● As members of the strategic planning working team, help employees play the role of strategy ambassador throughout the organization and involve them in the roll out and implementation of the strategic plan;

● Develop your strategic plan in the form of a strategy execution roadmap that includes key strategic objectives, aligned business processes and strategic projects, and linked performance indicators – aligning processes, projects, and measures with your business strategy effectively links action with the strategy;

● Assign ownership (for strategic objectives, indicator data, indicator commentary, core business processes, and projects) across your organization, including clear responsibilities and target dates, that leverages current work responsibilities intelligently and build a culture of follow through within your organization; and

● Strive for maximum organizational alignment at all levels of the business with the elements of your strategic plan.

How to Learn to Like Strategic Planning Again: Leverage the strategic planning process to set the scene for strategy execution success. 

 

Strategy formulation and execution management are critical activities for any business that wants to achieve maximum organizational performance and sustained business success. The act of collaborating, talking about, and writing down your organization’s goals, and plans to achieve them, has a powerful effect on the amount of time and effort required to reach those goals, reducing them significantly for most companies.

If you want to avoid using the “S word” in your organization, I’ll leave that to you. However, the fact remains that successful companies have made peace with strategy (and the strategy formulation and execution management process) and have embraced it for the invaluable business management tool and process it is.

I believe that the key to success is not to avoid strategy but to adopt it on terms that make sense for your organization so that your business strategy/strategic plan can provide your organziation with all of the benefits it has the potential to deliver.

 

Is Measurement Really to Blame for Innovation Failures?

Recently, I have seen some suggestions that measurement, and more specifically, the choice of measures used, is a prime driver of innovation failure in organizations. While I agree that innovation can be problematic in organizations, I have to wonder whether when it happens it’s actually a strategy problem (maybe) or a management problem (more likely) dressed up as a measurement problem.

I understand – a lot of people REALLY dislike measurement. Measurement can be very troublesome when it is used incorrectly – to judge, blame, and humiliate people who are working very hard to do the best they can with what they’ve got access to. This is the dark side of measurement. And when all you have experienced is the dark side of measurement then it’s no wonder that people avoid and lay blame on measurement when business problems arise. Measurement is often an easy and visible target in these cases.

However, I worry that this type of response is due to the fact that measurement is largely misunderstood. Here’s what I think.

The purpose of measurement is to: (1) provide useable information and feedback on how business processes are performing, including the results they are producing; (2) provide early warning signals about possible operational and strategic issues; (3) facilitate insights into the cause and effect relationships within the business and how the organization works in an integrated way to produce business results; (4) facilitate organizational dialogue about what’s going on and to set the stage for learning and improvement, when required; and (5) support informed decision-making.

Measurement should NEVER be used to blame people for results because measures are generally designed to provide information about the performance of business processes and systems – not people. When unexpected results and under-performance occur, you likely have a process or system (i.e. organizational, management, accountability, etc.) problem on your hands – not a people problem.

That being said, when barriers to innovation occur in an organization, my experience is that it’s either a problem with the business strategy or it’s a management issue.

 

When it comes to creating and managing your business strategy, it is important to remember that measures are simply the tools we use to represent the key strategic objectives in the business strategy. You see, if you haven’t clearly defined the key elements of your business strategy, then it’s impossible to ensure that it is properly captured by a good measure set. A good measure set includes one or two indicators for each strategic objective in your business strategy – measures that directly or indirectly relate to a strategic objective based on its definition.

Let’s look closer at a business strategy that includes innovation as a key strategic objective. The first question I would ask is: What do you mean by innovation? Is it hard core R & D? Or does it look more like the incremental but important improvements achieved through continuous quality improvement (CQI)? Do you mean something altogether different and, if so, what? It is very important to realize that, if you want innovation to make its way into your measure set, it has to be included in your business strategy AND it must be clearly articulated.

If innovation hasn’t been clearly included in your business strategy and/or described in detail, don’t blame measurement for a lack of innovation. What you really have is a strategy problem.

 

In reality, most companies know whether innovation is an important factor in the success of their business and business strategy. From there, many will include some measure(s) of innovation or CQI in their measure set. So, how does innovation still end up falling by the wayside in some organizations? The answer is management problems.

Failure to execute a business strategy, such as innovation, has three primary management-based causes: (1) lack of, or inappropriate, prioritization and balancing of business objectives; (2) poor organizational alignment; and (3) a failure to build the required accountability structure and culture. 

 

1. Prioritization and Balancing of Business Objectives

What is the relative importance, right now, of your innovation strategy in relation to the other strategic objectives in your business strategy? Is it one of the top 3 – 5 key objectives for the upcoming period or is it lower on the list? It is essential for business leaders to make these prioritization decisions because it is unrealistic to think that all strategic objectives in a business strategy can receive equal work effort at the same time – no company has the unlimited organizational capacity required to do this. Organizations that fail to define, and communicate, these relative strategic priorities make business decision-making difficult for managers and employees, setting the stage for the poor execution of all of their strategic objectives.

Another challenge is being aware of, and effectively balancing, opposing strategic objectives when they exist in a business strategy. Specifically for this discussion, objectives relating to innovation versus those related to risk management/avoidance would be examples of naturally opposing objectives. While the resulting push and pull can be handled through a business strategy prioritization approach, it is often better to soften one objective and strengthen the other through business strategy discussions. This way, the challenge that is faced by trying to implement powerful opposing strategies is worked out before it comes time for strategy execution.  

If innovation is not happening in your organization when it should be, it is important to determine whether the root cause relates to the prioritization of this objective. If innovation is a recognized business strategy for your organization but it has a lower priority at this point in time, you would expect to see evidence of some innovation activity but at lower levels of intensity. If, however, business priorities are unclear in your organization, it is important to determine whether innovation has fallen off the agenda as a result.

 

2. Poor Organizational Alignment

Is innovation, as defined in your business strategy, adequately supported by your organization? That is, does your organization have the organizational structure, business processes, and projects in place to support the execution of an innovation agenda, do employees have the skills and capabilities they need to execute the innovation objective, and are the plans, tools, technologies, and resources (including budget dollars) required to support an innovation strategy in place in your organization? Poor organizational alignment with an innovation strategic objective will prove to be a key barrier to innovation in any organization.

 

3. Failure to Build the Required Accountability Structure and Culture

Who in your organization has accountability for the completion of your innovation strategy? Who is taking ownership for ensuring that the innovation agenda moves forward appropriately? Who is the owner of your innovation processes? Who has accountability for providing the necessary data and performance commentary for your innovation measures? Do the people in your organization display a dedication to action and follow through and demonstrate a shared commitment to seeing that your innovation strategy achieves its desired results? These are all elements of the accountability structure and culture that is required to ensure that your innovation strategy is executed as planned. If your organization’s innovation agenda is falling behind, unclear or undefined accountabilities for action and a poorly developed culture of accountability could be possible root causes.

 

Innovation is an important business strategy for many organizations, however, it is frequently not fully realized. Sometimes, poor measure selection and utilization is identified as the reason for this outcome, however, this is almost always a red herring. It is far more likely that a failure to execute an organization’s innovation agenda is either a strategy problem or a management problem. When barriers to innovation exist in a business, it is critical to complete a root cause analysis and then implement the necessary changes to get the innovation strategy back on the desired course.

Is innovation an important but problematic objective for your organization? Take the time to clearly identify and then eliminate the REAL barriers to success.