Many companies begin formulating their strategy without addressing the hallway conversations. Others go through the motions without addressing critical context issues. In both cases, they dramatically curtail their ability to have truthful, vigorous, and unconstrained dialogue on the changes they need to make in the organization and significantly reduce their ability to build strategic commitment.
Mission statements, vision statements, strategic intent, purpose, credo, BHAGs (so-called big, hairy, audacious goals), and all the labels for defining strategy, direction, and organizational goals seem endless; and yet the poor track record of change initiatives says something is missing. To craft a bold and compelling strategy, the CEO and his team must address certain fundamental principles, not a mantra of “vision, mission, values,” or a jumble of acronyms.
The content of the strategy principles are:
The leaders must clearly and simply state the “what” of the strategy. In defining the “what” of the strategy,
the leadership team must specify the results that will determine success.
Answers to the following questions should vividly describe the firm’s unique capabilities and the kind of future they are committed to building:
1. What will we uniquely provide, deliver, or impact? What will be our unique capability and value?
2. What will be our distinct level of quality, performance, or delivery?
3. What kind of team will we be? What will uniquely characterize our internal culture and working dynamics?
Once the “what” has been established, the leadership team can begin to design the “how”—the milestones, initiatives, action plans, and accountabilities necessary for fulfilling the end state. Too often, effective action is displaced by unproductive busy work because people are working on “how” without understanding the “what.” By clearly articulating the “what” and then the “how” of the strategy, leaders focus people on outcomes, not on activities.
Organizations that achieve excellence get people to commit to a future that represents a breakthrough from the past. Their ambitious goals inspire innovation, the relentless pursuit of improvement, and a drive for success. Ritz--Carlton takes this approach, Sheraton does not. The employees reflect that difference, and the guests experience that difference.
Everyone must see the strategy as valid and complete. People must understand why it is needed and (at the outset) have some idea about how they can help achieve it. They must also believe that nothing essential is missing or minimized. The strategy must be explicit enough so everyone is marching in the same direction yet not so detailed that it prohibits individual creativity.
With respect to the context of the strategy, these principles must be followed:
Leaders must relate to the strategic objectives as promises rather than goals. An attitude of “we’ll do our best, but if it fails we aren’t responsible” almost guarantees that it will fail.
Getting people to promise an outcome will shape the way they view the task. People will not value “working hard” to achieve the goals (“working hard” is a reflection of doing one’s best). They will value “working smart.”
The executives must be in total alignment on the strategy, not merely consensus. Most CEOs attempt to get their leadership team on the same page about the direction of the organization by “building consensus.” In the process, the team often must water down the new direction to one that everyone can live with, which ends up being the lowest common denominator.
Creating consensus can make people feel like victims of the process, believing that “if they had only listened to me, we wouldn’t be in this position.” Furthermore, it sets the stage for excuses when events go sideways.
The executive team must own the new direction unconditionally. External consultants can provide valuable input into the content of a strategy. After all the input is taken, however, the executive team must fully own and embrace it as their creation
Excerpted, by permission of the publisher, from The Power of Strategic Commitment by Josh Leibner, Gershon Mader, and Alan Weiss, Ph.D. Published by AMACOM. Copyright 2009 by Josh Leibner and Gershon Mader. For more information, visit http://www.amacombooks.org