Strategy 101: When Everything is Important, Nothing is Important
Hands down one of the most obvious challenges for today’s fast paced organizations is maintaining strategic focus. Organizations obviously keep a watchful eye on marketing, revenue growth, expense control, and employee development; but keeping a watchful eye is not strategy, it is basic management and maintenance of resources. Strategy is the intentional planning and execution of decisions in which economic gains are maximized relative to suitable levels of risk. The problem that so many companies face today is that they consider management-maintenance to be strategy, and as a result see continued mediocre results year after year.
The key to effective strategic planning is realizing that when everything is important, nothing is important. What this means is when every major work activity and objective is getting attention – that is what it will get – attention, but not stellar results. It is impossible for an organization to devote energy, creativity, and resources to everything at the same time.
Meaningful results derive from strategic focus on single activities in a specific amount of time. Obviously good companies maintain accountability and management of all things important, but great companies have mastered the art of highlighting single significant actions that will create economic value to their companies. Business author Patrick Lencioni (2006) says that these single activities, or thematic goals, need to be so significant that they become a rallying cry by the leadership team, thus giving it the energy and focus it deserves. Further, to drive strategy home, great companies build defining objectives that give thematic goals clarity and visibility. Finally, business measurements, or metrics, are associated with each objective, helping to drive accountability and results. This extremely simple strategic model not only helps drive real results, it generates commitment, alignment, accountability, and engagement to organizations.
So how does one start such a simple process? An easy way and standard approach to start strategic planning is to identify potential activities by using the SWOT analysis (Strengths, Opportunities, Weaknesses, Threats). Originated in the 1960’s by business management consultant Albert Humphrey, the SWOT analysis helps to establish context by creating awareness of internal influences of strengths and weaknesses, and external influences of threats and opportunities. To see sample SWOT grids, there
are many examples easily found in Internet searches. In this activity, which is very appropriate during a quarterly leadership conference, the leadership team continually adds what they consider to be influential factors for success. I suggest this become a living document that is continually added to and edited.
To add a little more analytical oomph, translate the SWOT into a TOWS analysis (SWOT in reverse). In this exercise, the SWOT is broken into different combinations which generate another level of strategies (samples can easily be found using internet searches). These combinations include StrengthOpportunity, Weakness-opportunity, Strength-threat, and Weakness-threat. You simply look at your SWOT in these combinations and look for potential strategies. For example, when you look at your Strength and Opportunity combination – you will look for what we are already good at which can be levered into new market opportunities. This additional level of analysis almost always presents new strategies you wouldn’t have noticed in the SWOT alone.
Once you have all your SWOT and TOWS data, the information should funnel into a large Goal Bank. This large bucket of strategic action can be further broken into 1-3-year goals, 3-5-year goals, and 5+ year goals. Now that you have a nice breakdown of strategic planning options – identify the thematic goals your entire leadership team can focus on for a time period of no longer than 1-year. Not only are there obvious benefits from clarity in your organization's strategic work, maybe the most significant beneficial effects come from Leadership teams working as 1 TEAM, not several siloed departments. Finally, defining objectives and business measures are incorporated to help drive results home.
In my opinion, aside from the obvious economic benefits that comes from strategic planning, tremendous benefit also comes from leadership teams learning how to work cohesively as 1 TEAM. Author Lencioni (2006) has noted that all too often departments are working against each other, when in fact they need to be working together. This results in what he refers to as a silo effect – several entities fighting for self-preservation, attention, and funding. To better understand what 1 TEAM looks like, Lencioni and his colleagues explored examples of work entities working together as one unit, including emergency rooms, firefighters, and rescue missions. Teams will come together during a crisis and exercise a clear sense of priority. At these times, no one would ever imagine putting their own ego ahead of the mission. The beauty of strategic planning and identifying a single thematic goal, a rallying cry of sorts, aligns the entire organization around one single and aligned focus. It reminds everyone that they work for one company, with one mission. If leadership teams can’t function cohesively, everyone pays the price.
Strategic Step Summary: (1) SWOT analysis, (2) TOWS analysis, (3) Goal Action Bank, (4) Break goals into 1-3, 3-5, and 5+ year actions, (5) identify major temporary qualitative thematic goals for the leadership team and organization to get behind, (6) create multiple strategic defining objectives to give clarity to the thematic goal, and (7) create business measurements to create accountability and visibility.
Keeping a watchful eye on revenue growth, cost control, and other traditional focus points is not strategy, it is basic management and maintenance of resources. Effective strategic planning is realizing that when everything is important, nothing is important. Companies don’t have the capacity to give attention and resources to everything. More important, doing so only creates the siloing effect where everyone is fighting with one another. But a continuous practice of identifying a single rallying cry brings clarity and alignment to the organization.
I can’t tell you how often people comment on this process of finding major thematic goals as overly simplistic and would prefer to incorporate complex solutions from expensive consultants. But the proof is in the pudding–when teams can rally behind a cause, they are building the foundation for alignment, cohesion, and most of all, 1 TEAM. Lencioni, P. (2006). Silos, Politics, and Turf Wars. San Francisco: Jossey-bass Dr. Chance Eaton has over a decade’s worth of experience working in the field of learning and organizational development. Due to his unique educational and work experiences in finance, psychology, leadership and management, education, noetic sciences and agriculture, Dr. Eaton provides his clients with relevant business solutions grounded in theory and research. To learn more about Dr. Eaton’s services, visit www.hcsinter. com