Several years ago, I helped the president of a manufacturing company run a strategy initiative. When I walked into the room on the first day, twenty-six eager faces greeted me. Well-intended though he was, my client had inadvertently turned our strategy session into an execution-a session that promised to kill the strategy before it had a chance to live.
Those twenty-six people had shown up wondering how they could do what needed to be done, and we hadn’t even discussed what should happen, why that would be important, and, most importantly, the benefits of making changes. These professionals had arrived well prepared to talk about vision, mission, plans, and values. But they hadn’t given enough thought to what I call the Strategic Three Questions:
- A year from now what do we want to be true that is not true now?
- Why is this important?
- What benefit will the company enjoy if you achieve this?
I’ve learned through the years that when setting strategy, distractions occur easily. When this group reviewed the data from the customer surveys and discussed the various metrics, they immediately started to talk about “how” they could fix problems.
They had no clear direction about where they wanted to go, yet they were certain of the modes of transportation to get them there. Making good time in a vehicle that you enjoy driving on a highway that offers numerous amenities is still non-productive if you haven’t established your destination. Yet organizations decide daily to do the equivalent of that.
I immediately began to write down their suggestions and simply ask, “Is this a ‘what’ or a ‘how’?” They realized they were concentrating on tactics, not strategy. As they learned, strategies are few; tactics are many, and discussing tactics too soon encourages people to keep the argumentative shuttlecock in the air.
To achieve success, senior leaders must assume the roles of architect, steward, and guardian of the strategy. These jobs cannot be outsourced, completed, or scheduled. They define the most ambiguous things leaders do, because they involve speculation about unknowns and require journeys into uncharted seas. Coupled with hiring and developing talent, however, setting strategy ranks as the most important thing senior leaders do…and makes success more certain.
Effective strategy formulation concentrates actions and resources on critical issues, gains commitment, provides a rationale for allocation of resources, enhances communication, and increases the chances of not just surviving but of thriving.
However, I typically encounter a three-fold problem among my clients relative to strategy: they confuse strategy with tactics; they don’t hire enough strategic thinkers who can handle the situational and episodic nature of strategy; and they make strategy an annual event, not an ongoing process.
In most organizations, you’ll find more people who understand how to run fast than people who can decide which race they should enter…more people with well-honed skills for producing results in the short run than visionary strategists.
Certainly, you need both to succeed, but most organizations are replete with those who can plug along and lacking those who can plan ahead. The competition, however, is more likely to outmaneuver you strategically than to outperform you tactically.
Your tactical “to-do list” (plugging along) will often keep you in the game today, but only a clear strategy can ensure your success tomorrow. Therefore, senior leaders must understand the nature of strategy, embrace the changes it brings, set priorities for achieving what your competition can’t match, and choose the right people to drive your vision. Only then will you outwit your rivals and claim your unique position.
Every organization is headed somewhere. Too often, however, that direction is not the result of a conscious choice. Instead, leaders engage in perceived potential, reactive decision-making, or short-term gains designed to placate shareholders and analysts. When they fail to ask the Strategic Three Questions, they jeopardize their strategy and fail to establish the foundation and context for allocating resources for an exceptional execution of that strategy.
My new book, The Merger Mindset: How to Get It Right in the High-Stakes World of Mergers, Acquisitions, and Divestitures will be released next week.
You can pre-order your copy here: http://themergermindset.com
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