As Trump showed, a well ex­e­cuted strat­egy can help achieve suc­cess

Be­ing strate­gic re­quires com­pa­nies to make an hon­est as­sess­ment of the prob­lems they face

The Irish Times - Business - - WORLD OF WORK - Man­ag­ing Work Karan Son­par and Fed­er­ica Paz­za­glia

In his book Tough Calls, busi­ness­man Al­lan Leighton re­calls the early stages of his ten­ure as chair­man of the UK’s Royal Mail, which at the time was los­ing £1 mil­lion (€1.13 mil­lion) a day.

On join­ing Royal Mail, he re­quested to see strat­egy doc­u­ments that had been de­vel­oped by the com­pany.

This re­sulted in his of­fice soon be­ing filled with dozens of boxes con­tain­ing some 1,000 in­ter­nal doc­u­ments re­lated to strat­egy. Ad­di­tion­ally, a look at the or­gan­i­sa­tional chart re­vealed that about 700 em­ploy­ees had ti­tles that con­tained the words “strat­egy” or “strate­gic”, pos­si­bly con­ferred as a tes­ta­ment to the pres­tige of the role and the im­por­tance of strat­egy to the com­pany.

On the sur­face, there was an abun­dance rather than a dearth of strat­egy. How­ever, busi­ness tools or tem­plates were not go­ing to make a dif­fer­ence to Royal Mail un­less it ad­dressed why it was los­ing £1 mil­lion a day. The mere adop­tion of plan­ning tem­plates and tools does not make com­pa­nies strate­gic or suc­cess­ful. Rather, be­ing strate­gic re­quires com­pa­nies to make an hon­est as­sess­ment of the prob­lems they face and fol­low through with a clear and ac­tion­able game plan even though this may re­quire them to make dif­fi­cult de­ci­sions.

At the most ba­sic level, a mis­align­ment be­tween a com­pany’s cir­cum­stances and its strat­egy stems from con­flat­ing as­pi­ra­tions or goals with hav­ing a strat­egy. This is ex­em­pli­fied in state­ments such as “our strat­egy is to dou­ble our growth”, or “our strat­egy is to be a top five com­pany in our in­dus­try”, and “our strat­egy is to be an in­no­va­tive com­pany”.

Strive to win

While goals de­scribe “what” needs to be achieved, strat­egy in­stead fo­cuses on the “how” a com­pany will strive to win in the mar­ket­place. A strat­egy is best de­scribed as a method or co­her­ent game plan de­vel­oped to achieve goals or as­pi­ra­tions.

An ex­am­ple of a clear, well-ex­e­cuted, and in­ter­nally con­sis­tent strat­egy is ev­i­denced in Don­ald Trump’s cam­paign to win the United States pres­i­den­tial elec­tion.

His “Fif­teen States Strat­egy” aimed to cre­ate a path to vic­tory by fo­cus­ing on a smaller set of “swing states”, par­tic­u­larly in the mid­west, which were as­sumed to be more re­spon­sive to his “Amer­ica First” mes­sage and to his style of cam­paign­ing that re­lied on fre­quent, in­cen­di­ary ral­lies to stim­u­late turnout among his sup­port base.

There is also a ten­dency to view strat­egy as a once-off ac­tiv­ity, whose over­ar­ch­ing pur­pose is to pro­duce an an­nual plan­ning doc­u­ment, of­ten emerg­ing from an iso­lated brain­storm­ing event such as a cor­po­rate away day.

While high in­ten­sity events such as these en­able ex­ec­u­tive at­ten­tion to be chan­nelled to the task at hand, by their very na­ture they do not al­low for a full un­der­stand­ing of the com­pet­i­tive land­scape and do not pro­vide ad­e­quate time to build con­sen­sus around a course of ac­tion.

Com­pa­nies would be bet­ter served by view­ing strat­egy as a process that re­quires sub­stan­tial ex­ec­u­tive time and at­ten­tion, not only while a plan­ning doc­u­ment is pro­duced, but also be­fore­hand and af­ter­wards.

This process, which is em­bod­ied by the con­cept of strate­gic think­ing, is fa­cil­i­tated by a com­mit­ment to en­gag­ing with in­flu­en­tial stake­hold­ers early on to lis­ten, get feed­back, and fa­cil­i­tate buy-in.

This process also re­quires be­ing open to fine tun­ing a plan while its im­ple­men­ta­tion is un­der way if needed. In light of a sub­stan­tial in­crease in en­vi­ron­men­tal com­plex­ity and tur­bu­lence, strat­egy must al­ways be on the ta­ble and be a dy­namic and on­go­ing process char­ac­terised by a com­bi­na­tion of in­tended and emer­gent el­e­ments.

Ad­di­tion­ally, ex­ec­u­tives of­ten lament that plans can cre­ate more con­fu­sion than clar­ity and this can trig­ger dis­en­gage­ment among the rank and file. Clear and sim­ple plans are guided by three fun­da­men­tal ques­tions – “where are we now” (as­sess­ment), “where do we want to go” (goals and ob­jec­tives), and “how do we get there” (strat­egy) – that look straight­for­ward but re­quire a lot of thought.

As­sess­ing the sit­u­a­tion sur­round­ing a com­pany im­plies map­ping its com­pet­i­tive land­scape and tak­ing stock of what is work­ing well and what could work bet­ter con­sid­er­ing emerg­ing en­vi­ron­men­tal trends. This re­quires not only iden­ti­fy­ing and po­si­tion­ing a com­pany with re­spect to the op­por­tu­ni­ties and threats emerg­ing in the mar­ket­place, but also con­sid­er­ing the role of “softer” aspects re­lated to or­gan­i­sa­tional cul­ture and em­ployee en­gage­ment.

‘Had the for­mula fig­ured out’

For ex­am­ple, on tak­ing over as chief ex­ec­u­tive of Mi­crosoft, Satya Nadella ex­plained that a key prob­lem faced by the com­pany was that it had an op­ti­mi­sa­tion mind­set, as if it “had the for­mula fig­ured out”.

In­stead, he pro­moted a shift to­wards a dis­cov­ery mind­set and a need to look for a new and bet­ter for­mula for suc­cess. For Mi­crosoft this largely meant lever­ag­ing the po­ten­tial of cloud ser­vices.

Set­ting a com­pany’s fu­ture di­rec­tion re­quires a will­ing­ness to make trade-offs, fo­cus­ing on a lim­ited num­ber of key goals and ob­jec­tives and putting oth­ers on the back burner.

This process of elim­i­na­tion can help ex­ec­u­tives shift at­ten­tion and re­sources away from less im­por­tant ob­jec­tives to­wards more salient ones while also help­ing in­di­vid­u­als in the com­pany to vi­su­alise what suc­cess looks like.

Fi­nally, strat­egy brings the plan to­gether by high­light­ing the ap­proach a com­pany will use to achieve its goals and ob­jec­tives. This re­quires not only iden­ti­fy­ing a big pic­ture game plan but also pay­ing at­ten­tion to fine-grained de­tails of ex­e­cu­tion at the tac­ti­cal and op­er­a­tional level to make a strat­egy come to life.

Crime preven­tion

Con­sider, for ex­am­ple, the suc­cess­ful ap­proach to crime preven­tion in­tro­duced by com­mis­sioner Wil­liam Brat­ton of the New York Po­lice Depart­ment in the 1990s to im­prove the chal­leng­ing law and or­der sit­u­a­tion in the city.

This in­volved a se­ries of in­ter-re­lated ac­tions such as ag­gres­sively pros­e­cut­ing mis­de­meanours, in­creas­ing the fre­quency of pa­trols, and mea­sur­ing and mon­i­tor­ing tar­gets of­ten to en­sure progress.

De­cod­ing the mys­tery of strat­egy would re­quire com­pa­nies to de­velop a sim­ple, clear and in­ter­nally-con­sis­tent roadmap that ad­dresses core is­sues and ex­ploits promis­ing op­por­tu­ni­ties emerg­ing in the mar­ket­place.

It is best viewed as a process that re­quires be­ing alert to mar­ket trends, lis­ten­ing to key stake­hold­ers, mak­ing ex­e­cu­tion a part of the plan­ning process as op­posed to view­ing it as an af­ter­thought, and be­ing ag­ile in the face of chang­ing con­di­tions.

‘‘ Set­ting a com­pany’s di­rec­tion re­quires a will­ing­ness to make trade-offs

Karan Son­par and Fed­er­ica Paz­za­glia are both full pro­fes­sors of man­age­ment at the UCD Col­lege of Busi­ness

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