Tuesday, October 23, 2007
Sometimes I get jealous of people who have a clear vision of what they want to do in life. I have a friend who, at the age of 5, already knew exactly what he wanted to do with his life. He wanted to be an electrical engineer.
He spent most of his childhood fiddling around with electronic gadgets. When he went off to college, he got a bachelor’s, master’s and PhD degree—all in electrical engineering. Then he went and got a job at a large company in the field doing leading edge work in electrical engineering.
After awhile, he decided to become a professor of electrical engineering at a large, prestigious university. Now he teaches and does even more leading edge electrical engineering research at the university. He has lived a rich, full life doing exactly what he had clearly determined to do way back when he was 5 years old.
Me? I’m over 50 years old and I’m still trying to figure out what I want to be when I grow up.
It’s nice when one has a clear vision of what they want to do with their life. It allows them to focus. They don’t have to waste time searching. They know their path in life. That’s why sometimes I wish I could just get a letter in the mail fully detailing the divinely inspired plan for my life.
This is also very important for businesses. It is much easier for a business to succeed if everyone involved clearly understands the life path of the corporation. It lets the company focus on success. That’s why I’m sure many CEOs wish they could just get a letter in the mail fully detailing the divinely inspired plan for their business.
My suspicion is that there are a lot more people like me than there are like my friend, who had a clear vision since early childhood. I also suspect that a lot of businesses struggle with this issue. Although strategic planning can do many things for a company, probably its most important benefit comes from bringing clarity of purpose to a business.
The principle here is the importance of clarity to success. McKinsey and Company recently did a large study to determine what are the most important factors to success in business. They analyzed about 100,000 questionnaires to uncover the practices at 400 business units in 230 companies around the world.
McKinsey discovered that there were three factors which caused a dramatic improvement in performance. Nothing else came close in its impact. The three major factors all had to do with clarity:
1) Clarity of Goal (or as they put it, a compelling vision of change or direction);
2) Clarity of Path (an unencumbered internal process to reach the goal, or as McKinsey put it, an environment that encourages openness, trust and challenge—i.e., the right culture); and
3) Clarity of Expectations (or as McKinsey put it, clear roles for employees and clear understanding of who it accountable for what).
If you know where you are heading, you clear away the bureaucratic obstacles, and then let everyone know what is expected of them, then you have the highest potential for success.
Over the years, I have spoken with large numbers of people about strategy. A common problem I find is people fretting about trying to find the perfect strategy. They have narrowed down the list of options to a few choices, but they are having difficulties narrowing down the list to the single best alternative.
What I usually tell these people is that it is more important to just pick something and get a clear focus around it than to fuss and fret over whether you have made the absolute best choice. Usually, most anything on their short list has the potential for success if focused on. However, if you waver and go after too many options at the same time, you will probably fail. Picking which path is not as important as shedding the light of clarity on whatever path you pick.
Perhaps my friend could have also been successful if he had focused on a different career path. However, because he picked a path early in life, he was able to focus and succeed on the path that was chosen. If he had procrastinated about his future, he may have had no success at all.
The best way to tell if your strategic planning process is a success is not by the quality of the binders or the speeches. No, the best way to determine success is by the amount of clarity it brings to the organization. When you are done:
1) Does everyone clearly understand the goal?
2) Does everyone clearly understand their role and are willing to be held accountable to achieving it?
3) Is everyone so fixated on the larger picture that internal barriers and petty politics are gone and is replaced by openness and cooperation?
Strategy without clarity equals disaster. Strategy with clarity equals success.
I am reminded of an old episode of the TV show Star Trek: The Next Generation. Captain Jean-Luc Picard and Dr. Beverly Crusher are captured by the enemy. The enemy puts a device on them which has the side effect of letting them sense what is on each other’s mind. Captain Picard and Dr. Crusher eventually escape from the enemy. The problem is that they do not know where they are, so it is difficult to know which is the best escape path.
Being the leader that he is, Captain Picard makes a number of decisions as to the best way to go. Each time, he sounds very convincing about the correctness of his choices. However, eventually Dr. Crusher speaks up. She says that for all these years when she has heard Captain Picard give commands, she always though he was very certain of what was the right thing to do, because he always sounded so confident when giving the order. However, now that she was able to read his mind, she discovered that he often only has a vague notion of what is correct, and sometimes he is just guessing.
The captain replied that this is what leaders do. They struggle internally with tough decisions, but externally they give the confidence needed to rally the troops behind the decision. They make the commands clear and unwavering, to give the appearance of being the obvious best choice.
In many ways, this is what strategic planning should do. It needs to tackle some tough issues. However, once the tough decision-making is done, the process must clearly and confidently communicate the decision in a way which gets the troops focused on making it succeed.
The job is not over when the choice is made. One also needs to make sure it is understood and embraced.
In addition, one needs to clearly assign responsibilities, with individual consequences if not carried out. In other words, strategy should not just be stated as a nice thing and then hope that people will do something. Clear accountability needs to be spelled out. Perhaps individual accountability contracts need to be written out. Compensation needs to be tied to carrying out one’s portion of the strategy. Do not assume things will magically happen. Make it clear who is responsible for what.
Finally, one needs to incorporate corporate culture into the strategy, so that internal bureaucracy does not block the path to victory. Although there may be individual responsibilities, one cannot let individualism get in the way of the combined effort. Clear away anything in the culture which prohibits the cooperative effort needed to achieve success.
Although strategic planning serves many functions, its most important function should be to provide clarity to an organization. Clarity has three aspects: clarity of goal, clarity of path and clarity of responsibility. Without this comprehensive clarity, strategy is little more than some interesting ideas that end up going nowhere.
Although you may never get that letter with the divinely inspired detailed plan for your business, you can write that letter for the rest of your business.