Monday, March 22, 2010

Strategic Planning Analogy #314: One Strategy

Early in my career, I was working on a project with another guy in the department. He seemed more motivated than normal get this project done. He also wanted me to be more highly motivated.

Trying to get me excited, he said, “I was talking to the boss, and he said that if we do a really good job on this project, I will get a big promotion.”

So I started thinking…this guy had less seniority than me and a lesser position. If he were to get a big promotion, it would mean that he would become my boss, putting an additional layer between me and the top of the organization. In essence, his reward would have the indirect effect of acting as if I we getting demoted, or at best having my career path made worse.

So, if WE work hard, HE benefits at MY expense. What’s in this for me? Would not I be better off if the project has a little less than a stellar performance? The status quo looked a lot better to me than the so-called “rewards” that would come from working harder.

I could see the look on the face of the guy I was working with. He was starting to realize what was going through my mind. Now he regretted having told me about his potential promotion.

Business is ultimately about getting things done. One of Strategic Planning’s key roles is to help determine what should get done. However, just deciding what should get done does not necessarily ensure that it will, in fact, get done.

In the story, there was a disconnect between what the company wanted to get done and what I wanted to get done. Project success and my personal success were at odds with each other. As a result, I was not fully motivated to make the company goal a reality.

These types of situations happen in the business world all the time, often on a far larger scale than the project in my story. Businesses will make grand pronouncements of wonderful new strategic initiatives. They will explain how these new strategic plans will make everything for the company so much better.

Then, over time, you stop hearing much about that grand strategic initiative. Worse yet, there is no real evidence that the key elements of the strategy ever got accomplished. Status Quo prevails.

A year or two later, the business will make grand pronouncements about an entirely new and different set of strategic initiatives. Forget those old initiatives. Let’s embrace the new ones. Of course, the success in implementing the new initiatives turns out to be no better than the failure of the old ones.

Why? Usually in these situations, there is a disconnect between the ones declaring the initiative and the ones who are supposed to accomplish the initiative (just like what happened to me). Unless you fix the disconnect, the strategic initiative will not succeed.

The principle here is that strategic planning needs to be more than just a source of great ideas or mandates. It also needs to get involved in the messy work of implementation. Otherwise, the forces of the status quo will usurp control and render the strategy powerless.

I was reminded of this principle today while reading an interview with one of the authors of a book called “One Strategy.” The book, which was published late in 2009, tells the story of the project to design and release Windows 7.

The premise of the book is as follows. Most companies have two strategies: The “explicit” or “directed” strategy (the declared strategic desire from the top) and the “implicit” or “emergent” strategy (what emerges from the everyday activities of the organization). If those two strategies are not aligned, you will fail.

The book’s prescribed solution is to seek “strategic integrity”—where both strategies are one and the same. This is done by working on all those forces which cause the “emergent” strategy to vary from the intended “directed” strategy. This includes things like policies, procedures, organization, rewards, incentives, management style, and so on. In addition, there needs to be constant communication between the keepers of the directed strategy and the keepers of the emergent strategy so that they can stay on the same page. The book uses blogs by the Windows 7 project manager to illustrate how Microsoft created strategic integrity through this process.

In my story above, my rewards and incentives were not aligned with the project, so I was less than fully motivated to make the project a success. There was the potential for me to lose strategic integrity.

What is amazing to me is that this is considered a radical enough new idea to warrant a book. Isn’t this just common sense? Let’s assume for a moment that I owned an auto repair shop and decided to turn it into a gourmet restaurant. I tell the head mechanic to make the change and then go away for a few months. When I come back, I find out that nothing had changed. When I ask the mechanic why the new strategy was not implemented, he says:

“You didn’t give me any money to make the conversion from auto repair to gourmet restaurant. I had no policies or procedures for running a restaurant. All the employees here are compensated as a % of the labor costs in automotive repairs. If they stop doing auto repairs, they stop getting paid. In addition, all the mechanics figured that they would soon be out of a job (replaced by chefs) if they cooperated. Finally, I’m more comfortable managing a repair shop than a restaurant. So we decided to keep things as they were.”

Common sense should tell us that this would be an expected response. If you truly wanted to make the conversion from auto repair shop to gourmet restaurant, you would need to get rid of all those barriers to conversion and stick around to make sure that the forces of status quo do not win.

But I guess it is not common sense, since strategic failure (lack of strategic integrity) is so common.

Part of this is the fault of the professional strategy community. We often don’t like getting our hands dirty with the messy task of implementation. We voluntarily cut ourselves out of the daily conversation where the “emergent” strategy takes place. This is a mistake. No wonder so many companies see strategy professionals as irrelevant.

Part of this is the fault of the operators who try to block strategists from “meddling” in their affairs. Strategists cannot help remove the barriers if they are forbidden from entry into the world of everyday business activity.

So how can we help fix this situation?

1) Create Incentives for Cooperation
If the natural tendency is for the two sides to not want to work together, create incentives to overcome these natural tendencies. Tell the strategists and the operators that neither is rewarded unless both do their part to build the One Strategy. Suddenly, their success is dependent upon each other, so there is more incentive to work together.

2) Blend the Teams
The operators are more likely to trust the “meddling” of the strategists if some of the members of the strategy team are current or former operators. In addition, the strategists are more inclined to get their hands dirty if members of their team are used to getting their hands dirty. So if you want one strategy, build one blended team.

Professional strategists and professional operators both have something to offer. Blend them together, so that they offer assistance to each other rather than offering two distinctively different strategies.

Strategic plans are doomed if they are mere words handed off to people who are incented to keep the status quo. Strategy & Implementation need to be blended into a single, ongoing process.

I witnessed a company where about 90% of the organization believed that the “directed” strategy would have a negative impact on their career path. This was like my little story above, only multiplied by the thousands. As you may have guessed, the 90% revolted against the 10% and won. Never underestimate the potential resistance of people who feel that change threatens their personal agenda.

1 comment:

  1. Hello Gerald,
    It is surprising that people keep repeating the same mistake. In soccer a goal-scorer gets a bonus! Every player wants the bonus and teamwork disintegrates. Aligning individual goals with the organizational goals is the remedy, as you rightly point out.
    Again Gerald, you give simple stories that have far-reaching results!