By Kevin Meyer
I remember two decades ago when I was in my first real executive role and I was asked to come up with a strategy for my business unit. I was in control and I could develop and set a direction! I could finally use some of what I had learned in those traditional business school courses and seminars.
SWOTs, PESTs, Porter Five Forces, and the like were created and analyzed. Assessments performed, gaps identified, and finally strategies created. A plan for technologies, markets, people, and quality was developed, with detailed action plans for each. It took up a binder – a very nice-looking binder that was duplicated and presented to my management team. We all dutifully looked in awe at what we had created. And proceeded to put it on a shelf. I bet some are still on those same shelves, even if the date reads 1995. And then we went back into the business of firefighting the day-to-day issues.
Why? For starters it was too long, by about a factor of twenty. Did we really think we'd refer back to it on an ongoing basis? And just as with traditional budgeting, the vast majority of it was obsolete within a couple months. The exercise of multi-faceted self analysis was valuable – the first time. But it was a point in time.
You'd think I would have learned my lesson, but I didn't. I went through that same exercise a couple more times in different, larger, organizations. More pretty binders sitting on shelves. One of the last ones was even a hoshin style plan, with long term strategies tied to intermediate term objectives, which were then tied to annual goals. Just a whole long list of them.
And that was the problem: the desire for detail, specificity, depth, and breadth that created abundance and complexity. We realized this issue when we became fairly good with hansei – a quarterly reflection on our performance that we happened to have at a local winery. Luckily we had a scribe to record our brilliant a-ha's before the wine erased them from our memory.
We took a step back and looked at ourselves again. We reduced our long-term strategies to three, tied to a similar number of intermediate term objectives, tied to about five annual goals. That was it for a fairly large multi-site operation. We allowed the hoshin plan to evolve and change throughout the year as situations changed – similar to how some enlightened companies have dispensed with the annual budgeting process to use rolling and ongoing financial decisionmaking. We mapped all existing activities against that plan, and killed or put on hold projects that weren't aligned.
That's when real forward progress began to happen. And it was amazing how much time we freed up by not working on supposedly worthy projects that were not aligned with the strategy.
When I go into organizations I often see similar binders on the shelves, almost always gathering dust. I counsel the executives to try it again, this time dramatically reducing the length, and creating an ongoing hansel process. It seems to work well.
Earlier this month Nick Tasler wrote a piece for HBR titled "It's Time to Put Your Strategy on a Diet" where he drew several parallels between strategic planning and eating – and dieting. Limit your plate size by reducing the number of priorities. Let them eat cake tomorrow by putting off but not forgetting about great ideas that don't happen to align with the strategy. Avoid the "what the hell" effect though strict adherence to the strategy. And surround yourself with healthy eaters that are skilled at leading.
That last point relates to creating a culture where leadership can thrive. Leadership by smart, thinking leaders, not by control. Similar to what I mentioned a few weeks ago when I told you about how Netflix hires great thinking leaders, then sets very few rules. It's also what Peter Drucker meant when he said "culture eats strategy for breakfast" – which Mark Fields of Ford embraced a few years later.
But another article in HBR by Allesandro Di Fiore may take the concept of strategy brevity a little too much to the extreme. In "The Art of Crafting a 15-Word Strategy Statement" he suggests just that: 15 words. Really? Although you wouldn't know it from this post, and colleagues who interact with me via email would laugh, I happen to be fond of the 5 Sentences concept. Fond of it, but completely ineffectual at implementing it.
A 15-word strategy statement? He gives a few examples, such as IKEA, and it could be a good exercise as part of the strategy development process. I'm a little skeptical of it though, for the same reason that in my last couple of positions I've purposely not wasted time on mission and vision statements. They are either so broad as to be meaningless, or so narrow that they are constraining, and in almost all cases they end up on a wall in the corner of a conference room. Often next to the shelf holding a thick binder labeled "strategic plan." Be honest, the real mission of a company is to create money for the shareholders, and the vision is a lot of money. Instead we created a short statement of principles which guided our organization, and that was more than sufficient.
So as you look up from reading this post and perhaps notice your own binder on a shelf, think about taking another stab at it. Narrow it down. Very concisely, what are the three, at most four long-term strategies that your organization needs to be focused on? What three or four measurable objectives must happen in the intermediate three to five year time fram for that to happen? What four or five projects must be accompllished this year to enable that? Then, perhaps most importantly, what is your organization working on right now that doesn't align with that plan? Stop it. Formally reflect on that strategic plan at least once a quarter, with your team. Adjust and evolve – don't just set it in stone once a year.
You'll soon be amazed at how much you can accomplish.