Starting with strategy may be a bad idea

Starting with ‘strategy’, or long-term planning in general, for any business that is more than a few years old, is not a good ‘strategy’ in my experience.

I believe this to be especially true for companies suffering long-term or significant cultural, operational or financial difficulties.

Looking for help with new strategy, structure, mission, vision, values, goals and all sorts of other management functions is where clients often find our services. “We lack direction, we are losing market share, we have cultural and operational problems, so let’s get some strategic planning assistance to get back on track”.

However, we help clients take an alternate approach by first helping them implement a sequence of steps to ensure their organizations resolve their existing problems swiftly and capitalise on current opportunities faster than their competitors, irrelevant of market conditions.

Successful organizations do only two things. They identify and address problems swiftly, and they identify opportunities and capitalise on them faster than their competitors.

By creating this capability first, it unlocks an organizations ability to achieve the future performance outcomes CEOs, boards and shareholders desire.

It is not that strategic planning is not important. It is incredibly important. However, it needs to be in the right sequence.

Furthermore, I appreciate there are different perceptions and definitions of what strategic planning is and what it should include, which makes the matter more complex. It’s just that I contend that many strategic planning approaches and consultants do not properly address the issues that will stop the plan being implemented and ultimately be deemed a success.

The traditional approach.

My experience is that many strategic planning approaches and consultants assume that today’s problems will go away once we achieve the new strategy. Look at today’s problems that are going to stop us from achieving our future strategy and start internally, rather than looking externally first.

My experiences stem from being CEO/MD of both private and ASX listed entities, and working with clients in various industries in different parts of the world that are suffering a range of performance challenges that they want to improve.

We are somewhere today, but we want to be somewhere better. Better results. Happier customers. Happier shareholders. Higher performing culture. Whatever it may be.

So, we look at our goals, strategy, mission, structure, vision, values etc, and plan out into the future.

However, in my personal experience, we generally never achieve our goals in the time frame we think or hope we should. Sometimes not at all.

Groundhog day over and over.

We generally;

1)     Improve somewhat, but fall short of the target.

2)     End in the same position as last month/quarter/year.

3)     Or worse- we are in a poorer position than we were.

Sure, every now and then we shoot the lights out, but that’s generally 1 in 10, maybe less.

The reason I believe this occurs is that there are ‘anchors’ of problems, challenges and conflicts around the neck of the organization that are hard to see. Other descriptions for the ‘anchor’ could be impediments, hurdles etc. Whatever works for you.

Dysfunctional organizational structure, ineffective reward systems, poor information flow, inability to take corrective action, authority not aligned with responsibility, lack of engagement, and inefficient operational processes. These are just to name a few of the hundreds we come across regularly.

I personally like the anchor description because these issues are often below the waterline and not easily seen. It is these anchors that will stop us from achieving our plans, goals, mission, vision, strategy, etc if they are not dealt with FIRST.

We need to first ‘release’ these anchors so they don’t hold the organization back from achieving success.

When these anchors are released, it makes it easier to move to where you want to be. But you need a process to be able to first identify and address these anchors. And before you can do this, you need to actually believe they exist.

If your organization (or an organization you have invested in) is suffering from performance issues despite what you consider to be reasonable plans, goals, initiatives, strategies etc, then you’ve clearly got a range of anchors holding you back, or you would be achieving the results you expect by now.

Is there an alternative approach?

The ‘strategy’ before ‘strategy’.

In the below graphic, I provide the sequence we believe an organization should follow to start releasing these anchors.

1. Identify these potential anchors using a cross-functional team from different levels of the organization. However, “when you are in the painting, you can’t see the whole picture”. It is very difficult to truly identify all the potential anchors yourself. When you are in an organization, often you become too close to the situation and it is difficult to get perspective. Also, it can create significant destructive conflict if you are not careful. People have different styles, interests, perceptions and definitions. If these are not dealt with, you’ll have an even bigger set of issues on your hands. External facilitation using a methodology specifically designed for this task is critical.
2. Categorize the manifestations (the results of other factors), operational symptoms and root causes. Manifestations, symptoms and causes have totally different treatment plans. Treat one as another, and it won’t get resolved.
3. Prioritize based on what is normal, abnormal and fatal. This is a function of where your organization is in the lifecycle (http://adizes.com/lifecycle/). Would you get upset with a baby that cried all the time and didn’t sleep through the night every night? No, that’s pretty normal and our role as parents is to help them develop along the lifecycle so these normal problems go away by themselves. If they are still doing that at 35, you have an abnormal problem that needs focus.
4. Finally, resolve what you have prioritised, using the defined treatment plan, that is based on the category of the issue. Resolving really boils down to deciding what to do (how do you make a great decision?), and ensuring that decision is actually implemented.

If your organization can develop a core competency in identifying, categorising, prioritising and resolving problems and opportunities rapidly, you’ll have an organization that will be able to execute whatever you or the market throws at it.

As I’ve already said, I really recommend external facilitation for this the first time around, rather than companies trying to do this themselves. I don’t mean someone externally telling you what your problems are and what to do about them (the traditional consulting model).

I mean someone to facilitate you in identifying problems for yourself at all levels. When an organization identifies its own issues, it is more likely to resolve them.

As part of this process, your team may then say “we need some outside assistance for this issue” and bring in an external consultant. Great! They will now own the decision and be much more likely to implement what the consultant is telling them.

The Firm

I point people to the book “The Firm” that talks about how global consulting firm McKinsey was built. After a while, James McKinsey (the founder) got sick of just giving people advice, so took a job with a client company as CEO to actually implement his advice in a client company. It killed him in the end.

In the book, McKinsey was quoted saying, “Never in my whole life before did I know how much more difficult it is to make business decisions myself than merely advising others what to do”. Reading between the lines, I don’t think it was the business decisions themselves, it was the implementation of those decisions that was the real issue.

The author writes, “The job took a serious toll on McKinsey himself. Contending with the day-to-day implications of his harsh prescriptions, he became depressed and physically run down.”

After only 2 years, McKinsey never returned to his consulting firm, as “the stress of retail turnaround led to the case of pneumonia, which, in the age before penicillin, proved fatal”.

McKinsey, like others, missed the issue that it doesn’t matter what you want to do, or how genius your decisions, strategy, plans, goals etc are, there are anchors (problems, challenges, conflicts) that will get in the way.

Unless you FIRST fix those issues, things will be very difficult, as McKinsey himself found.

How many great pieces of advice, detailed plans and great strategies have been written by consultants (or executives themselves) that are still sitting on the shelf or in a drawer unimplemented? Why did they not get implemented?

Companies that come up with a great strategy that actually gets implemented are those that either removed these anchors first, or were blessed with a set of conditions where these anchors were small or non-existent. If that is you, I congratulate you.

But for most of us, we have anchors to contend with so we need to first identify, categorise, prioritise and resolve them before moving onto new goals, plans and strategies.

If you have been trying to implement anything new in your organization that just doesn’t seem to be happening quick enough, or at all, perhaps there are some anchors getting in the way?

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