SFO Blog - Helping You Build Your Company into a Strategy Focused Organization

Un-Sticking a “Stupid Strategy”

Have you ever found yourself stuck following a stupid strategy? You know - continuing to do something that may have worked in the past but isn’t working now (or is even counterproductive) given the current situation? I know that I have. You know how it is. You just get caught up taking the same approach to life/a situation because it has always worked. And then, something in your environment changes but your approach doesn’t and, suddenly, you find yourself going nowhere fast.

 

Basically, you don’t change and then you find yourself caught following a “stupid strategy”.

 

So what does this have to do with business? Well, this phenomenon doesn’t just happen to individuals - it happens to organizations too.

 

Have you seen companies that do business by having an annual planning event and then not talking much about strategy until the following year? Sure they meet on a monthly basis to go over the financials and business stats, and discuss tactical adjustments but this isn’t the same as talking about their business strategy. The truth is that 85% of executive teams spend less than one hour a month talking about strategic issues between planning events.

 

Organizations that operate like this run the risk of getting stuck following a stupid strategy. The reality is that things change – the economy, your markets, your competitors, your customers’ needs, your stakeholders’ demands, technology advancements, etc. And sometimes things can change really, really fast! Just look at how much and how fast the economy changed recently….

 

Since your business environment is changing, annual strategy discussions just won’t cut it – this approach actually increases your risk of getting caught following a stupid strategy.

 

As a leader, your goal is to make sure that your business strategy remains agile, responsive (or even pro-active), and flexible to change when it makes good sense. Here are four steps you can take to eliminate the stupid strategy risk:

 

(1) Establish an integrated change early detection system

 Many businesses fail to change their strategy because they actually miss the changes that are going on around them. More often than not, changes are subtle and it is the combined effect of many changes in a variety of areas that eventually reduce the effectiveness of a company’s strategy.

Organizations that display strategic agility implement mechanisms that allow them to pick up and integrate the myriad of changes occurring in their operating environment early across the spectrum of their business. One example is a communication pipeline that allows employees at all levels of the organization to add their insights and observations about important changes into the strategy management process. Internal online communities, open email access to the CEO, executive round table forums, CRM database updates, etc. are just some of the ways this can be done. The bottom line is that agile companies take the time to open the lines of communication and capture critical insights in a forum that can be leveraged by all to discuss strategic implications. 

 

 (2) Make strategy a continuous process

Agile companies realize that strategy is a journey that must be continuously fine tuned to stay on course. As a result, they move away from the annual planning event and replace it with a series of (at minimum) quarterly strategy progress review sessions. Questions reviewed during these sessions include: How have our strategic objectives been performing over the past quarter?; What are the implications for strategy execution? Are we moving forward?; What are our key strategic issues?; and, Are any changes in direction required (objectives, relationships, strategy)?

In addition to these regularly scheduled sessions, strategically agile organizations will discuss the need to change their business strategy any time a significant event happens in their operating environment.

 

(3) Implement a strategy governance framework

A lot can change in a business environment so how do you know when a change in business strategy is required? Who decides and what’s the process? Agile companies take the time to work all this out by establishing a defined strategy governance framework. This framework usually details the four step approach to making strategic change (i.e. gather change/improvement information and feedback; assess and determine the type of change/improvement required; develop the improvement solution/determine the change in strategy required; and implement the improvement solution/make the required changes to strategy management tools and systems), roles and accountabilities, decision-making authorities. Establishing a strategy governance framework in advance gives agile companies an organized approach so they can focus strictly on strategic change matters when required.

 

(4) Develop a strategy change cascading process 

Many organizations avoid making strategy a continuous process because they worry about the “messiness” of making a change in strategy mid-implementation. Strategy execution excellence requires organizational alignment - projects, balanced scorecard indicators, budgets, resource plans, and people’s personal goal plans. Getting it all re-aligned after a change in strategy both quickly and efficiently is virtually impossible without a structured approach and process. Rather than take the time to establish these systems, many companies avoid change by not reviewing their strategy outside the annual planning event. In contrast, agile companies define and implement a fast and flexible strategy cascading process that allows all elements of the organization to re-align with changes in strategy almost seamlessly so that business carries on without missing a beat.

 

Getting stuck following a stupid strategy isn’t usually fatal in the short run for a company – that’s why most of them don’t feel the need to change their approach to strategy formulation and management. However, the long term effects of serial stupid strategies include dropping employee morale (your employees know when your business strategy is out if sync with the operating environment), reduced stakeholder loyalty, and sub-optimized business results.

 

Is this enough of a burning platform for change?

Start working on your company’s strategic agility today.

Leading for Strategy Success (a message for all employees)

Who provides strategic leadership in successful organizations? If you think this kind of leadership is just for executives, VP’s, and Senior Managers, then I want to challenge you to think again. I particularly want to challenge ALL employees, particularly those on the frontline, in every business, to see him or herself as a strategy leader.

 

The truth is that everyone can be a strategy leader whether they are in a formal leadership role or not. Did you know that long-term business success can only happen when everyone takes the initiative to work together to create, implement, and improve their company’s business strategy? At its core, this is what being a strategy leader is all about.

 

The fact is that it would take a very long time for companies to move forward, grow, and be successful if they waited for the business executives alone to come up with all the great ideas relating to strategic direction and strategy. It is impossible for this small group of employees to have the comprehensive and detailed view of the business and the insights required to achieve quantum leaps forward in business.

 

When you think about it you realize that it’s almost crazy to think that a handful of people could have all the knowledge needed to achieve this result! However, this is how most businesses operate today. They put pressure on their executives to have all the strategic insights required to produce exceptional business results.   

 

But what if businesses tapped into the knowledge, wisdom, and insights of everyone involved in, and with, their organization to build, manage, and improve strategy?

 

Imagine what strategic insights could be gathered from such a large group of people with their deep knowledge of their part of the business and where the opportunities are! And imagine if this large group of people contributed these insights on an ongoing basis throughout the strategy creation, management, and improvement process. Can you imagine how powerful and successful such an organization would be, regardless of what their definition of success looked like? (e.g. educating girls and women in Afghanistan, eliminating poverty in your community, growing market share and profits, etc)

 

Well, this is exactly what happens when everyone in an organization is a strategy leader.

 

Here’s what you can do today to be a strategy leader in your company:

 

1. Really Understand the Business Strategy

Get to know the strategy, including the core values, strategic objectives, business priorities, and strategic action plans, and practice telling others the strategy story using your company’s strategy map.

 

2. “See” Your Work in the Strategic Plan

Make sure that you can clearly see how you contribute every day to successful strategy execution. Think beyond the obvious functional connections – you contribute in more ways than you might first imagine!

  

3. Put the Strategic Objectives to Work Every Day

Successful strategy execution happens day after day so bring the strategic objectives you play a role in to work with you every day. It is important that you consciously put them into action in as many work situations as possible.

 

4. Work with Others to Make the Business Strategy Even Better

Because you are putting the business strategy into action every day, no one knows better than you, and your co-workers, where the opportunities for improvement are. Take action and make required improvements, or feed your ideas back into the strategy improvement process.

 

5. Practice Thinking Strategically

Look at issues and new opportunities from a strategic perspective and always ask: “Is this the right thing to do in light of our strategy?” When the answer is “yes”, embrace changes that will help move the business strategy forward.

 

6. Ask Lots of Questions – About Everything!

Ask probing and insightful questions when presented with issues and opportunities. Use the answers to these questions to assess potential and analyze the value of an idea or action in relation to the strategy and to improve the strategy itself.

 

7. Leverage Strategic Information to Make Good Decisions

Access strategic information, like balanced scorecard results, to understand what is going on inside and outside your company. Use this information to make strategic decisions, establish priorities for your team’s work, and set targeted goals.

 

8. Focus on Building Alignment with Business Strategy

Organizational alignment and synergy are critical for strategy achievement. This means that you must contribute to ensuring that all work is lined up with the business strategy. Do what you can to make this alignment and synergy happen and be sure to speak out when you see things falling short.

 

Of course, the executive team MUST help all employees be strategy leaders by actively offering encouragement and support. The old style of leadership and management control will not allow your organization to realize the full benefits of this new approach. A new style of leadership is required to successfully engage and mobilize strategy leaders at all levels of an organization.

 

It’s worth the effort to change.

 

When everyone in an organization works together to put these eight actions into practice, the company will be better positioned to successfully formulate and execute its business strategy, and achieve the exceptional business performance results everyone in your company is striving for.

 

And besides – it’s more fun to work in an organization where you play a vital and active role in its success!

The Real Reason for Measurement in Business

Do you measure things in your organization? What exactly do you measure and why do you measure it? What is your rationale for measuring the things you measure in your business?

 

Is it because measuring is just the right thing to do? Or is it because “what gets measured gets done”? Maybe it’s to manage, control, and improve your business processes. Is it to give you results data on which you can base the variable compensation scheme for your company’s employees? Maybe you measure business performance so that you can put numbers in your annual report or show the street that your business is growing. What does your list of the reasons why your company measures what it does look like?

 

Quickly make your list now. 

 

I suspect that when you do this exercise your list will include many of the reasons listed above. In fact, I hope that it includes more.

 

However, one reason that you might have missed on your list is: to learn.

 

If “to learn” is not at the top of your list of reasons for measuring, you should add it right now and underline it.

TO LEARN 

Bottom line? Learning is the REAL reason why you should measure things in your business.

 

Here are 10 business critical things you should be learning about your organization through measurement:

 

1. Whether your business strategy is moving forward,

2. Whether your strategic objectives are “healthy”,

3. Whether you have strategic and/or operational issues in your company,

4. What the root cause problems are in your business,

5. What solutions have successfully eliminated root cause problems in other parts of your organization (and how they can be applied to similar problems in other parts of your business),

6. How existing and new solutions are doing at eliminating new root cause problems,

7. How one part of your business has achieved success and how that can be applied in other parts of your organization,

8. Whether your theory of how your business works is right,

9. How the elements of your organization really work together to achieve success, and

10. What needs to change about your business strategy if your company is going to be/remain successful. 

 

If creating and reviewing monthly business results reports has become a routine, superficial exercise for you and your team then you are, sadly, missing an opportunity to get the most out of your measurement efforts.

 

Why not try this instead? At your next opportunity, pull out this month’s business results report and ask the people on your team these questions:

 

1. What are these measures/results telling us about our business/strategy/ operations?

2. What can we learn?

3. What actions could/should we take based on what we have learned?

 

Changing your approach and exploring these questions with your employees will yield exciting results for your organization: Giving a more meaningful purpose to measurement and business performance results will increase their value in the eyes of your team. By focusing on the real purpose of measurement – learning - you will engage and energize your organization in a new, exciting way.

 

By shifting your organizational culture to include a focus on learning, you and your team will be more successful in achieving better business results on a consistent, sustainable basis.

 

Put learning on the top of your list today!