OUCH! Strategy

20151104_145813So we started with the low hanging fruit of performance management so why not jump right to the lofty hanging fruit of strategy!

A quick search of the term strategy (noun) turned up the following definitions:

  • A plan of action or policy designed to achieve a major or overall aim.
  • The art of planning and directing overall military operations and movements in a war or battle.
  • A plan for military operations and movements during a war or battle.

For the purpose of this work  the first point above fits quite well and also the first four words of the second point; the art of planning. Strategy is a plan of forward movement, for an entire organization. I love strategy work; looking for all the dots of opportunity out there and trying to connect them with some coherent threads that tie it all together and make an imagined pathway seem possible. When that picture has a hint of clarity it is a beautiful thing I think.

I also think strategy has been compromised significantly and is now loaded with OUCH! The main reasons why:

  1. Strategy has become completely coupled with success.
  2. Strategy has become equated to a destination, a result, rather than a process of movement.
  3. Strategic plans stretch too far into the future and have too much detail.

The Greek origin of the word stood for ‘generalship’; again, the military links are numerous and continue today. Another interesting detail is that the whole idea of strategy and strategic plans in organizations was not common until the 1960’s. What this means is that some of what would be considered the most successful organizations ever, reached that defined success without ever having a strategic plan as we know them today. Today, if you do not have a detailed strategic plan you are more or less deemed incompetent.

Let’s take a look at the interaction model and see what gets compromised regarding typical strategic work; what is causing the OUCH!

Interaction Model

What is really interesting is that our typical understanding and formal activity in strategy is not much different than performance management regarding what is compromised in the interaction model. It just plays out differently.

Like typical performance management systems there are two main compromises to the interaction model:

  1. The bottom arrow in the right loop is effectively ignored.
  2. The left facing arrowhead in the gesture and response is effectively ignored

So what you end up with, in essence, is a giant, conceptual performance management system. You also end up with most of the same problems and compromises. It’s just that since senior management does strategy it is deemed more important than performance management. No one asks the question, ‘should we get rid of our strategic planning process’?

Perhaps we should.

At least in terms of expectation and intentions, not the content of our interactions regarding strategy.

If we look at strategy through the interaction model the intention of the group working on an organizations strategy (typically the role of the most senior management) is to create a plan that will lead to organization success. There is no other activity in organizations where the assumption that certainty can be delivered by those in power is stronger and more established than strategy. After all, senior management has the most power so are best positioned to create certainty.

As the senior management group interacts regarding this intention (typically some kind of retreat) their role is to plan a pathway forward that leads to the organizations success, however that success may be defined. In order to deliver certainty the senior team must account for every variable that might get in the way of their plan and mitigate the effect of those variables.

Once the plan is in place it defines the actions of the organization for whatever length of time the plan spans (often 3 – 5 years). The bottom arrow in the right loop is effectively ignored since any adaptation to the intention would mean one of two things or both:

  1. The definition of success has changed.
  2. Senior management was incompetent in their original work with the strategic plan.

Neither of these two conclusions are at all comfortable but if you assume certainty can be delivered by those in power it’s what you end up with and it’s actually point number 2 we see most of. All this current content we now see about things like ‘nimbleness’, ‘adaptability’, ‘flexibility’ and so forth are not about the bottom arrow of the right loop, it is about managing that arrow away in any real sense. All most of that content is really saying is that you can never plan to mitigate all the variables but if you are good enough you can mitigate them when they do unexpectedly show up. If you do that you can still deliver certainty.

Once the strategic plan is in place the entire focus becomes implementation and this then becomes the gesture of senior management initially to ‘communicate the strategy’  and then this cascades down throughout the organization. The left facing arrowhead is not relevant in any real sense because the gesture is about the strategy and that strategy is leading to success. The only acceptable response is agreement. Any differing response is just something that has to be dealt with, typically by better gestures until the response is what is needed.

If you look back at what strategy was before what we have now it typically started with being excellent at what you did and this excellence enabled the organization to act on opportunities that surfaced, or were likely to surface, in the relatively near future. These opportunities were more or less local, especially compared to today. The start point was excellence, the time frame was quite short and the opportunities were more opportunistic than planned. Certainty was not assumed. If you think about this a little, it is why the military connections to the definitions of strategy make sense. If you were excellent and were able to act on the opportunities that surfaced you had a better chance of winning a battle.

Today, the start point is certainty, the time frame is long (typically 3 – 5 years) and the opportunities are planned. And if you don’t deliver on those planned opportunities, you have failed on numerous fronts.

OUCH!

And yet, if you assume that certainty can be delivered by those in power, the strategic plans we have in place today make perfect sense; just like the performance management systems we have.

As with performance management, this does not mean we should just trash the idea of strategy. I actually think good and numerous interactions regarding strategy are likely more needed now in organizations than at any other time in history! The content of those interactions are critically important; the expectations and intentions we typically have of our current strategic work however, seriously misfit our experience.

As mentioned in earlier posts the next post(s) will focus a little bit on the theoretical ideology from which I question these formal organization processes and the posts after that will focus on what can we actually do about these misfits, these OUCH’s!

Discussion and comment points for this post:

  1. What is your experience with strategy?
  2. Do you know the strategic plan of your organization?
  3. Have you ever worked in an organization that did not have a strategic plan? Tell us your story.
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2 Responses

  1. Great article Tom! I think your approach would put many strategy consultants out of business. 🙂 My past experience with them is that they are deliberate rather than opportunistic in strategy creation. With that said, I’ve recently been involved in very methodical processes for vetting strategies. They’re meant to force System 2 thinking, an especially useful discipline to objectively assess risk of failure. But that’s for vetting, not creating the strategy.

    10 years ago I think strategies were more informal and more at the regional level of multi-national companies. That’s my observation. And today, again in my experience, it’s more typical to have one global strategy that’s rather inflexible.

    • Thanks for your response Kristen!

      I think there is a place for ‘deliberate’ within strategy work but the time frame needs to be much shorter than what I typically see in a lot of strategic approaches. I find it fascinating that we hear all kinds of noise about the accelerating pace of change and then at the same time see organizations insist on 3 – 5 year strategic plans! For public companies the pressure for these plans is often investor generated but then the investor wants quarterly dividends and a very short term focus. It simply creates impossible scenarios and tremendous amounts of OUCH!

      But we keep doing it!

      The idea of vetting strategies is good I think as often people get so hyped up about their awesome strategy that they interpret information about that strategy to support it rather than being objective. I’m not a big fan of the terminology of System 2 thinking however as it can often create an assumption that a better ‘system’ will create the future you want (i.e. strategy). The intent of helping create objectivity is good I think, but often that intent, when systems thinking is involved, get’s lost in the certainty systems thinking methodology assumes.

      There will be more on this in later posts.

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