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How do you fix a strategy that's stuck?

How do you fix a strategy that's stuck?
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When discussing the development needs of a client’s rising generation of talent, one of the things that we often hear is that ‘we need them to be more strategic’. But what do we actually mean by this?

One thing I have noticed from working with boards, senior leaders and executive committees is that the the word ‘strategy’ is used incredibly frequently, often to point to something that is missing and much needed, but its definition remains fuzzy. This is ‘strategy’ as a catch-all ­­– a receptable for all our uncertainties and concerns, with little clarity about what ‘being strategic’ actually is.

Strategy, it seems, is stuck. It has fallen foul of overuse and misuse; it has lost its meaning and we should be suspicious of it. Yet, organisations are still desperate for strategies that work.

For me strategy is simply a way to win, a roadmap to success. But all too often the process of creating and developing strategy is overtaken by the constraints of planning. I have seen countless so-called strategies that are little more than a rough collection of individual departmental plans and budget lines brought together in a single document. In the words of Roger Martin: ‘90% of strategic plans I have seen in my life are more accurately described as budgets with prose’. A budget isn’t a strategy.

Here are some of the main reasons why we struggle to create effective and coherent strategies:

1. Strategy is engagement with uncertainty

There isn’t a right answer; you don’t know if it will work. Often, attempts to create good strategies are undermined by the demand for ‘proof’ that it will work. As one business leader told me: ‘we don’t fund “don’t know”’.

2. Strategy is explicit choice

Strategies define one particular course of action over others. But as humans, we don’t like making explicit choices because what if they’re wrong? So, we don’t choose; we hedge our bets with vague announcements that ‘we will put the customer at the heart of our business’ or ‘we will be the best value supplier in our marketplace’. These are just meaningless statements of intent, not strategic choices. A good test of their value is to examine their opposites, e.g. ‘we will be the worst value supplier in our marketplace…’.

3. The purpose of strategy has changed

Previously, strategy focused on building competitive advantage by reducing transaction and informational costs. However, these days organisational costs are more likely to exceed informational and transactional costs, as technology continues to change everything we thought we knew. Agility is now a vital precondition for any successful strategy, but we are still stuck in our old ways of thinking. Competitive advantage isn’t the sum of all efficiencies anymore.

4. Strategy is perceived as something done by senior and/or super smart people.

From this point of view, strategy is decided at the top and the rest of us just wait to be told what it is and what our targets are. This is strategy done remotely from the front line, by a monoculture made up of a tiny subset of the available organisational diversity ­– and this just won’t cut it anymore.

So how can we create, execute and continually adapt a successful organisational strategy?

I like Roger Martin’s approach, in which he suggests that in designing and executing strategy, organisations need to make five important choices:

  1. What is our winning aspiration?
  2. Where will we play?
  3. How will we win?
  4. What capabilities must we have?
  5. What systems do we need?

All five of these choices are vital, but what’s more, they must be interdependent. This interdependence is one of the main reasons why strategy is difficult, because it requires us to ‘roam the range’ between the decisions implied in answering each question.

Roaming the range is an integrative set of leadership skills that creates wholes out of parts, incorporates diverse views, fosters relationships and networks (rather than structures and processes) and builds this capacity in others. Roaming the range is a core capability of any leader who is able to design, execute and lead strategy. It helps us steer clear of the binary polarisations that pose ‘either/or’ questions and limit scope and imagination. But much more importantly, it also encourages us to be precise, avoiding vague catch-all statements that duck the crucial issue of actually making decisions.

The reason strategy is stuck isn’t that we don’t understand what it is, it is that we are reluctant to take the risks involved in doing it properly. We don’t want to make choices and take the responsibility of making those strategic calls; we don’t want to tell our bosses that we can’t guarantee it will work.

What’s more, we don’t foster the skills needed for it. Strategy presents an integrative challenge that requires us to bring an organisation together, simultaneously seeing both wholes and parts, the inside and the outside, and understanding that when it comes to making tough choices, diversity is a strength rather than a weakness. Unfortunately, the capabilities needed in order to rise to this challenge are not ones that we readily develop in our workplaces, universities or management schools.

We must rethink this. In an age in which our technological cycles are outpacing our planning cycles, and the struggle to survive has never been greater, the need for effective strategy is imperative. We must find a way to understand how to play and how to win in highly dynamic competitive environments.

Is your talent strategic? If not, let’s start a conversation.