THE JOINED-UP STRATEGY

Most organisations get caught up in the complexity of strategy. The influencers on my thinking on strategy have all come from the “Keep it Simple” stable. In a world that is going faster and faster a complex strategic plan will inevitably fail in some areas.

A joined-up strategy recognises there are different steps between the long term vision and the minute by minute decisions that define the organisation. For many organisations these steps are assumed and have not been explicitly stated or aired for ongoing relevance.

What got you to one level will not necessarily get you to the next. The world keeps changing, what most organisations do not do well is to ensure consistency between the various steps. The joined-up approach is visual, is iterative and stops the team getting stuck at one stage.

THE VISION

Organisations need vision, not a vision statement. The “Vision, Mission and Values” process is rolled out in countless organisations, gets put into a poster on the wall and usually is utterly meaningless. For a start, most confuse purpose and an objective. Many appear to be designed by a well meaning committee. It feels good but does not address relevance, competition or impart the sense of urgency to perform and to fulfil the potential of the organisation and leadership. As Greg Bustin a great Texas Vistage Chair and speaker on accountability says “Clarity creates Confidence”

A vision for the future describes the ecosystem in which the organisation will exist, the activities, behaviours and consequences of the vision. It makes it clear how the industry and sector will evolve and lays out the role that your specific organisation can play.

Reason for Being - Relevance

Simon SInek in his famous TED talk suggests we start with “Why"?”.

This makes sense, especially if there has been a drift from the original founder’s purpose. Many of the most famous strategy pivots have been by businesses needing to re-invent their purpose to remain relevant to a shift in customer demand.

Jim Collins developed a model of the hedgehog asking “What are we passionate about?” which to my mind is close to why we exist. This also ensures we are honest about what our core market is - recognising we may target customers beyond that to ensure an economically viable model.

Another way of exploring this is our sphere of influence - which leads to the second part of Collins' hedgehog “what can we be the best in the world at?” I often encourage people to reflect on what they do, look elsewhere in the world and say “We are as good as anybody in that sphere”

This so often is much harder work than it should be. often businesses try to answer these questions in the terms of how they are unique. But that comes later!

OUTSIDE IN VISION

How many “vision statements” have you read or heard that leave you know wiser about what the organisation is trying to achieve?

“This is what it will look like” is where we start. But for the industry sector we serve, not our own organisation. his is because there is usually consensus about what the industry and the end customers will look like - possibly not so much about the speed at which it will happen. Once the Vision for industry sector is described, then it is easier to define the types of organisation that will compete in this space and the roles that they play.

We can the define the implications to our organisation, the other players we might need to work with, thus making choices about the role our own organisation might play. This minimises the risk of a headstrong CEO making a bold “Vision Statement” without the options being spelt out first.

Positioning in a COMPETITIVE ECOSYSTEM

While Michael Porter’s five forces model is excellent to persist with the Outside-In thinking, competitive rivalry models have developed to ensure that current competitive pressures are mapped. My favourite is the simple “Radar Screen” which allows emerging competitors to be mapped alongside the more conventional players.

The dimensions vary depending on the industry - it may size, product range, geographical focus, time horizon, service levels etc.

It leads to powerful visuals that drive engaged discussion and understanding of the key role that market positioning plays in defining the competitive strategy

THE JOURNEY

Strategic Direction is made up of two elements; the Vision is driven by the Outside world and the Journey. The Journey is at the heart of Strategy. You have defined point B and you know where you are at Point A. The Journey defines how are you going to get there.

Ashton Bishop, Australian speaker from the organisation Step Change runs a workshop called “History’s greatest Strategists”. He has a set of cards of the great leaders from the past - Genghis Khan. Gandhi, Steve Jobs, Hannibal etc… and he asks “How would they have tackled the challenge?” This idea is that there are different strategies that get to the same destination. So, once the Vision is set (subject always to that iterative process of a Joined-Up check) the next step is to define the journey and the leadership teams values are likely to play a significant part in what that journey looks like.

That leads to the next set of questions and ideas. The next few steps can be made clear, but beyond a year or two we know it is speculative and things may change. We can not go across the water to reach the lighthouse, we have to follow the path and we do not know what surprises that may bring. It still amazes how really good businesses feel they can set and forget their 3 or 5 year plan and revisit in three years.

We can define, now, what we THINK the journey will entail. We can identify where we need to grow and evolve. We can define our success factors required to succeed and, for a business, how we can sustain our growth. We can explain the Horizons or phases that we might go through. No leader should try this alone; we are beginning to get away from the “Why?” into the “What?” and the “How?” and the senior team ned to be involved. Visual tools help this process enormously.

How Does your FLYWHEEL TURN?

Jim Collins, in the book “Good to Great” introduced us to the concept of a flywheel. He would credit the success of Amazon to their clarity of how their flywheel turns; but there are many different flywheels, not all about scale and reducing costs.

However, developing a flywheel is not easy - it is painful to watch executive teams trying to do this from a standing start. A facilitated approach is essential and starts with the more simple questions of critical success factors.

Sustainability is key here. One of the spokes / wedges of the flywheel must, must define how financial returns are made and how they are re-invested in the other elements of the flywheel.

Once the flywheel is set, then a critical review of how well each spoke is performing provides the priorities for the next phase.

What are the three horizons?

The horizons model brings in the dimension of time. It instils urgency without panic! Organisations have not got the resources to do everything at once. Once the growth is defined in the context of longer term objective, the horizons allow the elephant to be eaten, one bite at a time.

It allows a business leader to share the vision but ensure the organisation are focused on the first steps.

It allows the “Blue Sky” ideas to remain in the plan, without getting distracted by them.

Themes are useful. Often Horizon 1 is a “turnaround” or “build capability” Horizon 2 - is building on this and Horizon three is where you throw the opportunities you will research and discover more about over the coming years and months.

THE PLAN

Strategy - meet Planning! How many businesses start here rather than review their vision and journey? The Plan must have an agreed Vision and Journey in place to have a hope of ensuring a sustainable organisation. With a strategic direction defined, we have covered the Why? and most of the What? - we now come to the How? and the Who? and the When?

Just as Vision and the Journey make up the Strategic Direction, The Plan and the Execution make up the implementation. for most organisations the Plan is the #1 role of the Chief Executive ( I mean role - not the title some people have) The CEO is accountable for developing the Plan and the Executing it.

Horizon 1 - The Thematic Goal

Patrick Lencioni, in his great book, The Advantage, talks about creating great clarity by having a “Thematic Goal”.

The Thematic Goal concept is liberating; it gets out of meaningless KPI discussions into “what are we (collectively) trying to achieve over the next horizon?” Then, “what are the elements that make up that theme?” Now we introduce some concepts around OKR (Objectives and Key Results). Define success for each objective, then, what do we need to do?, then how do we know we are making progress along the way?

Lencioni also emphasises there are some standard operating objectives that are not Horizon dependent - Sales, Profitability, utilisation, cash etc. The concept here is the senior team is not choosing between change and improvement initiatives and the day to day - they need to do both.

How will we behave?

The idea of “Culture” has now become accepted as very important. My perception is most business leaders understand that but haven’t linked their statement of values back to why culture is so important.

To achieve the desired results we need our people to make decisions based on two basic elements:

• They need to understand our strategy - especially on a day to day basis on how we serve customers

• They need to understand how they are expected to behave in certain situations

Values are not nice to haves. Lencioni talks about categories of Core, Permission to Play, Aspirational and Accidental. I have added the categorisation of Core being “Distinctive vs Generic” and “compelling vs Supporting”

The purpose of this is a useful framework for BEHAVIOURS

Accountability not Titles

This usually is the hardest challenge for CEOs putting together an executable strategic plan. Most businesses in my experience have appointed people to titles. But the Horizons approach is emphasising that priorities change over time. Roles are what counts not titles.

In Australia, where I live, employment law is enshrined around detailed duties and tasks. It is depressing. Gino Wickman, who wrote the book “Traction” and introduced the EOS system ( a simpler version of the models in Scaling Up by Verne Harnish) talks about roles and accountability structures. A team, that genuinely embraces the concept of roles (which then vary over time as the business evolves) will allow alignment betwen the strategic needs of the business and getting it done .

Which leads nicely onto……..

EXECUTION

The holy Grail. Businesses have incredible opportunity and the Vision has been made clear by the CEO, The strategy is spelt out; investors and the board (if you have either) are supportive. A beautiful 30 page plan has been approved, and simplified to a one page plan which is on the wall everywhere. So how confident are you that you will achieve the objectives, especially the longer term ones that determine enterprise value?

Execution is the proof of leadership. For excellent execution it is necessary to have clear vision, a clear journey mapped out and a clear plan, but it is not sufficient. A business leader needs to lead through very clearly defined processes and protocols. Jim Collins in the book Good to Great defines the Great leaders as “Level 5” - not necessarily charismatic but leaders with a combination of humility and relentless drive for performance. It is all the things that most of us fail at - consistency, good habits and focusing on others not ourselves.

Dan Collins (no relation!) is an Australian speaker on accountability, with a background in elite sports. He emphasises that the currency of work is “performance”. CEOs - that’s what you are paid to do. It is not about you, much more about your direct team and the whole organisation performing as a team.

Since we are all human and all egocentric the re-assuring thing is there are good tools for a leader to apply. It may be the most uncomfortable part of the role but when it is embedded, the most rewarding! These tools cover - Meeting rhythms - the concept of Flow - talking about the right things at the right time with the right people taking ownership. Focusing on the right issues. And, finally, the idea of Quarterly Priority Management.

Meeting rhythm and Cascade model

Patrick Lencioni in his comprehensive work on organisational health, “The Advantage”, emphasises that Meetings, when run well, are absolutely essential.

To achieve alignment between the plan and the day to day operations we need different meetings with different formats and mindsets. The common language should link the objectives through very specific “Key results”. One of the best examples of clear use of meeting rhythms was by Alan Mulally, CEO of Ford and described in the book “American Icon” with his “Business Plan review” model.

The analogy of a sports team that is under pressure springs to mind - keeping the shape and focus on the specific roles are even more important when there are urgent distractions.

Issue Management and Focus

Every business has a myriad of issues. Some are problems, some are opportunities. Some can be solved quickly at a local level, others are complex and need many people’s inputs.

With the cascade model clearly in mind, the first element is to address issues at the right level of the organisation. How often does a leader get asked to solve a problem, when they are even further from the issue than people asking?

There are always simple steps that help leaders focus on the real issues:

1. Identify the issues - define them without trying to solve them

2. Prioritise - and focus on those with the biggest impact

3. Use problem solving processes - ensuring the real issue is in focus - asking questions before jumping to the solution

4. Identify actions and, of course, follow up at the next meeting

Quarterly Priority Management

For most businesses, a set of annual goals is too long term. As issues are identified we have to address them as well as ensuring the next phase of the annual goal is delivered.

There is significant common sense in the use of a 90 day plan. Once a month often isn’t enough to make progress . This might include hiring people, restructuring, training people, visiting key customers and implementing new processes and systems.

Use of Agile methodologies can be used to great effect here especially bring in visual management and tactile boards. The key is everybody knows what people are focused on and this can then be reinforced in weekly and daily tactical meetings.