If strategy is to approach ‘perfection’, it must be adaptable to keep up with the changing external and internal pressures that affect delivery of the needed outcomes, advises Michael Bernard
The first thing to understand about planning is that there is no such thing as a perfect strategy, if that means a plan that captures every element – past and future – and is executed flawlessly, delivering each and every goal.
Given that the word ‘strategy’ is of military heritage (the Greek word for ‘art of troop leader’ or ‘generalship’), it is fair to use the soldier’s maxim that no plan ever survives first contact with the enemy. Each and every strategy should be seen as an attempt to move your organisation closer to its vision through an uncertain, changing and largely unpredictable world. A good strategy will be very clear about what risks, assumptions, issues and dependencies (RAID) are built into the plan, and what options are in place to mitigate problems that may arise for each significant element.
If strategy is to approach ‘perfection’, it must therefore be adaptable, changing nimbly to keep up with the changing external and internal pressures that affect delivery of the needed outcomes. It must contain feedback loops that allow the strategy to adapt to meet its goals. Very occasionally, there may be good reasons why the strategy’s goals should change, but this should be very rare. If the quality of work that has gone into the goal-setting process is good, then the focus should remain on what is needed to meet the goals, not whether they are incorrect.
Secondly, when considering strategy, it is very hard to imagine a strategy that does not involve collaboration. My own definition of strategy is: ‘an organisational plan to respond to the current or expected situation; or to meet one or more goals; and which requires a complex collaborative response’.
Collaboration takes on many meanings, depending on the organisation doing the planning. For a small charity or company, it might mean each person in the organisation collaborating to define and execute the strategy; a large company might look for internal collaboration across different product divisions, across functions (sales, marketing, HR, finance) or areas (USA, Europe, Asia). In the UK, part of the National Health Service (NHS) might look for external collaboration with local government, other service providers and so on.
A smart organisation will involve its own teams in building the strategy. Co-creation is the overused term for this, but it’s really common sense to involve those who interact with customers, competitors, suppliers and communities on a regular basis. Their collective wisdom can make a real difference to the quality of what is done, and how it is put into practice.
When creating or evaluating a strategy, therefore, look for the opportunities to collaborate that serve your intentions.
Having established that every strategy must be collaborative, and that it must know how to adapt to reflect changing circumstances, let us look at what key elements will be present in a good (or great) strategy:
1Strong foundations
Every strategy needs strong underpinnings to make sure that the outcomes delivered will be consistent with what the organisation is there to do. It may sound obvious that the strategy needs to be based on the purpose, vision and mission, but all too often, it is hard to see the connection between the planning and the reasons for the organisation’s existence.
For example, an organisation that I have helped along this process had some completely generic goals that were indistinguishable from any other company in that sector. There was nothing distinctive about what they were trying to do: increase revenues, reduce costs, be a great employer, and so on. The question is, why they were trying to improve these things – and that takes us to why the company exists. If the purpose, vision and mission are the foundations of the strategy, then culture, values and brand are the limiting factors on execution. If you create a strategy that is not consistent with these, then the path to successful execution will be rocky indeed.
2Change
A strategy has to be about change. All too often, when dissected, the strategy is a convoluted plea to keep doing the same old stuff. This is a recipe for failure. It may be quick, it may be slow, it is inevitable. Why is this the case? It’s simply that the world keeps changing around us. What consumers buy, how they buy it, how they learn about it, how they report their experiences – all these things are moving quickly. Then, add into that mix the rapid updates to regulations, laws, trade barriers and so on.
Anyone exporting from the UK into Europe has seen huge changes in the last couple of years, as Brexit has been implemented. Meanwhile, climate change is starting to impact global supply chains, energy sources, and consumer acceptance too. In short, the world seems to be changing at a faster rate every day. Logic tells us that strategy must reflect that change. A great strategy might mean that an organisation can get ahead of the curve and be an agent for change. In any case, a plan for change that is too slow is a plan that – over time – creates a bigger and bigger gap from reality.
3Focus and concentration
It would be lovely to have all the resources needed to make every change that your organisation needs, as well as the time to make it all happen. Everyone reading this will know that this is never the case. If we say that executing strategy is the application of the organisation’s resources towards a set of agreed objectives, then the resources are – broadly – people, money and time. The fact that there is usually a shortage of all three means that decisions have to be taken about what must be prioritised.
A strategy involves taking bets – often very big ones. No organisation can bet on every eventuality, so choices have to be made. Most people find it very easy to define priorities, but have great difficulty with the other side of that coin – what will they stop doing? In many strategies, the priorities are neatly laid out, with no mention of where the extra resources will come from.
In one example from marketing, a European B2B chief marketing officer had decided to prioritise digital marketing and a hybrid route to market. He moved budget and headcount from the European regions into the centre for digital marketing and added resources to the phone-based sales team. He consciously reduced what could be done in each region. The decision paid off, with 60% revenue growth within two years. The decision was tough and unpopular with the regions, but that is what a strategy demands.
Focus is about deciding priorities: deciding what you are, and what you are not, going to do. Concentration is the application of sufficient resources to the priorities to allow them a good chance of success. Both are necessary for a good strategy.
4Flawless execution
Creating strategy is difficult. Creating good strategy is exceptionally challenging. However, this seems to be easier than executing the strategy. When Lou Gerstner was recruited from American Express to save IBM in 1993, he found that there were plenty of good strategies written – even innovative ones. However, instead of using them, he saw that they had been put in the cupboard while the company continued with its normal operations.
Why is it so hard to execute a strategy? The first reason is that it is about change, and organisations are notoriously resistant to change. Everyone is working hard, struggling with tough competitors, deadlines, customers, suppliers and so on. The last thing that they want is to add upheaval to that mix. Yet that is what has to be done.
Second, a strategy usually has to be executed over a considerable period of time. This means a determination by the entire leadership team to stick the course and keep faith that the plan will deliver.
Third, everyone has to be involved in making it work, and that requires a huge and sustained communications effort. If the layers of management adopt the strategy but the customer-facing (or service user-facing) staff keep doing what they have always done, then it’s not going to work. The leadership must be visible to all, walking the talk, and remaining consistent in their messaging if this is to be seen as more than another management fad.
Lastly, there needs to be a good management system in place for the strategy itself, separate from the operational management system. Regular checks on progress against goals and milestones is essential, together with adjustments made to the execution to reflect the inevitable problems and opportunities that arise.
So, you have a collaborative strategy created which is:
- Built on the strong foundations of purpose, vision, and mission
- Going to deliver change at least as fast as the market
- Making clear choices about what to do and what not to do
- Ready for execution
You avoided the pitfalls of a template-based strategy, which flatters to deceive with fair-seeming charts that take all the original thought out of the process.
Do you have a perfect collaborative strategy? I hope so.
Michael Bernard has many years of experience producing business and marketing strategies for IBM and is the co-founder of strategy consultancy House of Strategy. He specialises in helping organisations produce strategies that are innovative, effective and suit their unique values and ambitions. His new book Creating Strategy is a practical guide to planning, approving and executing strategy, making complex concepts understandable for any organisation.
