How Good Is Your Strategy?
Strategic planning is usually a colossal waste of time at most companies. Not because strategic planning is a bad idea, but because the planning process is too often disconnected from the people who actually have to execute the plan. Therefore, the resulting plan does not adequately focus the organization where it has the greatest likelihood of being truly superior and winning.
Sustained business growth and long-term prosperity require both strategy and entrepreneurship. The problem with strategic planning at many big companies who aren’t as entrepreneurial as they once were is that their leaders aren’t as hard-pressed to make tough choices because they have an abundance of resources. They spread resources like peanut butter rather than concentrate them, acting to placate and pay off internal and external constituents. Their strategies accommodate conflicting desires, they have conflicting goals, and they wastefully allocate resources to unconnected inititiatives. Instead of focused strategies, they lead with laundry lists of desirable outcomes.
Of course, nature abhors a vacuum. In the absence of a good coherent growth strategy that connects the entire organization behind a viable purpose and objectives, emerging leaders throughout the organization will fill the void with strategies of their own for their teams. Bad strategies will sprout like weeds in a garden. Some will be good, and some will be bad. But they will most likely be disconnected and suffer from a lack of alignment and synergy that could have been enabled by a coherent growth strategy for the broader organization.
The problem with strategy at many smaller, more nimble and innovative companies is that strategy usually doesn’t exist. These firms have a lot of ideas, but they suffer from a lack of focus and the strategic discipline required to make the smart choices needed to accelerate and scale those ideas into momentum that can be sustained longer term.
Strategy is not simply goal setting and financial projections. A good strategic plan certainly includes goals and financial metrics, but it goes beyond goal setting to define how the goals will be achieved based on facts. Good strategy almost always involves a shift in thinking.
The most strategic leaders identify the few most critical issues their team faces. They dive deep to find the pivot or leverage points where they can exponentially multiply the effectiveness of effort and energy. Just as importantly, they do not turn a blind eye to the biggest obstacles standing in the way of success, and they clearly define the path forward to overcome them. The higher a leader ascends up the leadership ladder, the harder the strategy challenge becomes because the choices multiply faster than resources. It’s often a key differentiating factor that separates the best emerging leaders from the rest.
The best leaders know how to strike the right balance between strategy and entrepreneurship by focusing their team where they have the greatest likelihood of winning. They put punch in their strategies and make them more executable because they say “no” a lot, and when they say “yes” it’s a big yes. They fail fast on bad ideas, learn from failure, lower the cost of experimentation, and they improve execution by focusing precious resources on the fewer, bigger, more market-meaningful ideas that set them apart and create the greatest economic value over the long haul. They go beyond setting big goals with inspiring platitudes and slogans. They dig deeper to help their team develop a market-driven growth strategy that focuses their strengths on the most promising opportunities while giving serious consideration and sufficient planning to overcome obstacles. This is the essence of good strategy.
The most successful companies with whom I've worked over the last 35+ years also recognize that excellent execution requires much more than a good strategy. They do the heavy lifting to connect the dots cross-functionally and give their entire workforce the context and support they need to be all-in. They go beyond mere communication by using the strategic plan to cultivate a performance-based culture of innovation, collaboration and accountability. Most importantly, they understand that execution is just as much a people challenge as it is a strategy problem.