The primary premise of collaborative strategy is that giving everyone in your organization a seat at the strategy table delivers huge benefits – to senior leadership, the organization (in the form of better business performance), your customers and stakeholders, and your employees themselves. The outcome of a collaborative strategy approach is a more relevant, actionable strategy that will actually be accomplished in a very effective and efficient manner.
Collaborative strategy, unlike the traditional, top-down strategic planning approach, improves both the strategy creation AND strategy execution processes - and the outputs they produce. While we seem to have convinced ourselves that we (business leaders and executives) excel at creating strategy (in my experience, I’m not sure about that), most people are in agreement that successful strategy execution is one of the biggest challenges businesses continue to face today. Fortunately, a collaborative approach to strategy improves performance and results in both phases of the strategy management cycle.
So – if collaborative strategy is such a powerful approach, why isn’t it embraced by CEO’s more often? I think that it’s because, as some business commentators have pointed out lately, many believe that a collaborative approach to strategy is the sign of a lazy CEO.
People who argue this position point out that, since it’s the accountability of the CEO to solely lay out the vision for the organization (really?), only a small number of qualified (READ: senior level) people need to participate in the strategic planning process (ok….). They seem to equate involving lots of people in the strategy development process as creating strategy “by committee” – a true sign (they claim) that a CEO is sidestepping their visioning/leadership accountability. Eventually, proponents of this line of thinking get to: involving a wide number of people in a meaningful way in the strategy process = a weak CEO/leader.
Huh???? How exactly did we get to that conclusion anyway?
Contrary to popular thought, I actually believe that taking a collaborative approach to strategy is the sign of a smart and progressive CEO – let me show you why.
Successful use of a collaborative approach to strategy is built on the foundation of a new approach to strategy governance – it requires a fundamental renovation of an organization’s strategy governance model itself. Just to be clear, every organization should have a clear strategy governance model that outlines who participates in the strategy management process, in what way, and with what authorities.
Traditional strategy governance models tend to give most of the strategy roles and authorities to entities like the Board, the CEO, the Executive team, and, maybe, senior managers. Roles include creating and exploring strategic options and developing strategic directions. A typical CEO role is ensuring that the strategy is put into action while the Board is assigned the role of overseeing that the strategy is producing the desired results. Typical accountabilities of the CEO and the Board include making strategic choices that maximize business results while sufficiently managing risk and finalizing strategic directions.
This isn’t an exhaustive list – just some examples.
Traditionally, other stakeholders like customers, business partners, and employees rarely show up in the governance model in roles other than receiving the strategy and putting it into action (employees) or receiving the results and outputs that come from strategy execution (customers).
It’s frankly easier for CEO’s to stick with this traditional, status quo approach to strategy governance.
However, the status quo governance model doesn’t adequately support collaborative strategy. And, more importantly, the traditional strategy governance model doesn’t suit today’s modern world where stakeholders and employees actually want to be more engaged and have a real say in what matters to them.
It takes courage, effort, and a new approach to strategy management (one that shares the roles and accountabilities for strategy creation and execution more widely, and actively engages others in the process) to make collaborative strategy work. In my experience, not every CEO is prepared to make the necessary changes (maybe it’s just easier to discount the collaborative strategy approach rather than admit that you are unwilling or unable to change). But I digress….
Quite simply, a strategy governance model that supports collaborative strategy distributes strategy management roles and authorities across a wider range of participants. The key is to leave the right roles and accountabilities with the CEO and the Board (i.e. setting critical organizational boundaries and finalizing strategic choices and directions and the associated business model) while sharing and/or assigning remaining strategy roles and accountabilities to others inside (and even outside) the organization. The secret is to effectively balance the perceived business risks with the advantages realized by involving more people in your strategy and business performance management AND decision-making processes.
There’s no doubt that this new approach to strategy governance requires new CEO leadership skills such as influencing and persuasion, listening, questioning, and remaining open to doing things in a way you might not have thought of yourself. You also have to be prepared, when required, to make the harddecisions and then explain the “why’s” to the people at the strategy table. However, when collaborative strategy is clearly practiced within a shared strategy governance model, playing this new CEO role isn’t that hard because it’s expected and accepted by everyone involved.
The fact remains: To realize the power of collaborative strategy you’ve got to share power.
Regardless of what the business commentators and pundits say, collaborative strategy is the right approach for a new and dynamic world. However it cannot thrive within the traditional strategy governance model - you’ve got to renovate your organization’s approach to strategy management before embracing collaborative strategy. Moving forward without doing so is what I would call the dumb CEO move.
However, when you lay the right groundwork first, adopting a collaborative approach to strategy is quite possibly the smartest move any CEO will ever make.