I don’t assign much value to titles, but over the past decade, I don’t think I’ve had a single title that didn’t have the word “strategy” in it. Strategic Corporate Development. Strategic Planning. Strategic Marketing. Strategic Business Transformation…. The list is as long as it is boring.
It feels like everywhere we turn, everyone wants to be strategic. We no longer employ sales people, nor sales consultants, but—you guessed it, strategic sales consultants. Entry level positions at many professional services firms seem to start or end with the word “strategy”, and I can’t remember the number of times I’ve heard a senior business leader call for a “strategic approach” or ask for “strategic thinking”.
Strategy is fine, but the sad truth is that the success—or failure—of most firms is a function of culture and execution. Very few companies win or lose based on the strategies they pursue; most companies win or lose based on their cultural willingness to accept change and / or their ability to execute on opportunities.
A recent experience with a firm we’ll call the Genius Group illustrates this point; the founder was a successful, well-spoken serial entrepreneur. All of her direct reports were from the best schools in the country. The company had been in business for several years and had the most brilliant strategy I’d ever seen. There was only one problem—the strategy wasn’t working.
The Genius Group management team believed that it could attack every segment of its market and compete on multiple fronts against multiple competitors, several of whom had access to much greater resources.
The result was that the Genius Group had several dozen strategic initiatives all competing for finite resources and with limited prioritization. The management team may have had the next five years of strategic planning all mapped out, but the rank and file simply couldn’t move quickly enough to execute, nor did they always understand what they were supposed to be doing or why.
Sadly, the results were predictable. Sales failed to materialize, the company simply wasn’t growing, and profits were stuck in the dim future—always out of reach. Moreover, the company’s strategic plan, state of the art a few years ago, now read like instructions for a PC from the 1980s—stale, confusing and dated.
In the case of the Genius Group, we developed a simple three-step process to simplify their business, accelerating revenue and reducing costs. In the simplest of terms, our approach was to:
The Genius Group was pursuing several growth opportunities simultaneously. The company was attempting to grow through:
The challenge is that not all of these strategies are mutually supportive, and when taken in whole, they are distracting rather than enabling. Our first task was to validate which strategies still made sense based on external market conditions and the resources available. After a lot of debate and a fair amount of data analysis, we decided that improved share of wallet via expanded products was the winning combination. Prior to this validation, the company was pursuing outmoded strategies, and none of them were integrated or supported of one another. By focusing on two (rather than five) strategies, we were able to rationalize our limited resources and do so in a way such that each strategy supported the efficacy of the other.
Many firms fail to institute basic project management tools. Simple approaches like logging tasks in a spreadsheet and assigning delivery dates and ownership can go a long way to keep projects on track. At the Genius Group, it was just the opposite. There were detailed project plans for every strategic initiative in the plan, and tasks were broken down to a very granular level of detail. The problem was that the Genius Group mistook detailed project management for true executive prioritization. The end result was a system where hundreds of things were going on at any given point in time—and the company knew exactly where things stood—but almost all tasks were at a standstill due to the lack of resources and the sheer volume of work to get done. We eventually prioritized our tasks into five buckets; as a rule of thumb.
We decided that anything more initiatives than the number of fingers we could count on was likely to get lost or forgotten.
Merger & purge
Originally, we thought that we were done once we completed the second step of prioritization, but scope creep has a funny way of sneaking up on you. Sometimes, there are pet projects that are hard to kill because someone has a lot of emotion invested in them. Other times, there are objectively legitimate reasons why certain tasks can and should be linked to larger ones. Finally, there are times when a true heart-to-heart conversation is required to kill an initiative or outsource it to a third party. When it came to merge and purge, we reviewed the top five buckets of initiatives we previously established and found a way to merge projects that crept back into scope into larger buckets that had already been prioritized. This helped boost team engagement and morale by avoiding discussions of killing projects—they were simply added to a list and prioritized. This allowed us to avoid saying “no” and saying “later” instead. When it came to purging initiatives, the task wasn’t quite so easy. We truly had to say “no”, or find a way to outsource certain initiatives based on four variables:
At this final stage, many initiatives were killed, but an equal number were offloaded to third parties.
In the modern economy, we often think back to the days when things were made not by factories, but by skilled artists. It’s easy to imagine an Italian leather craftsman producing a pair of shoes—designed to fit perfectly to the customer.
Indeed, today, we often romanticize such memories; the growth of online market places like Etsy shows that people assign value to customized, hand-made crafts.
What most people don’t appreciate is that the hand-crafted leather shoes of yore didn’t last very long. They were very expensive, and even if they did last for more than a season or two, they couldn’t be passed down to younger siblings because they were sized exactly for one individual.
While leather shoes ceased to be made by hand long ago, it’s only recently that the American economy has come to value the benefit of specialization over integration. The US steel industry learned this lesson quite painfully, and some argue that the auto manufacturing industry is only now coming to learn these same lessons.
Smart firms are those that tactical implementation at least as highly as strategic planning. Successful firms are those that understand the difference between the two and validate, prioritize and merge and purge accordingly.
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