Friday, February 25, 2011

Strategic Planning Analogy #378: Who’s to Blame?

Although there are many things that governments are not very good at, it seems that they excel at creating processes to assess whom to blame when things go wrong. Whenever there is a problem, governments are quick to set up a process to find out whom to blame. It can be special investigative committees or inquiry sessions in front of the legislature, or just your normal voicing of opinions while legislating “punishment” for the “evildoers.”

And if members of the government cannot find a non-governmental group to blame, then they will blame a political party other than their own for the problem.

You’d think that with all that finger-pointing and declarations of whom to blame, we’d be able to stop all of these problems from re-occurring. Unfortunately, all this finger-pointing has not stopped the problems. Instead, it seems like the problems requiring their “blaming” process are increasing.

Maybe if governments spent less time trying to assign blame and more time working together to fix things, we’d be further ahead.

Governments are not the only ones playing the blame game. Businesses do it as well. When a business venture fails, companies also tend to look for where to pin the blame.

I have seen situations where companies get into a heated debate about strategic failure. The debate centers around who is to blame for the failure. Was it the fault of the people who created the strategy or the fault of the people who implemented the strategy?

Unfortunately, just as governmental finger-pointing hasn’t reduced the problems they deal with, strategy finger-pointing (creators or implementers) hasn’t seemed to reduce the rate of strategic failure. Maybe if businesses spent less time trying to assign blame and more time working together to achieve strategic success, we’d be further ahead.

The principle here is that instead of segregating strategy creation from strategy implementation (so as to assess separate blame), we should be working towards greater integration of these two processes (making it almost impossible to separate blame). My reasoning is as follows.

Strategies Have 3 P’s
As I have stated many times in the past, successful strategies need to address three topics, each beginning with the letter P:

1. Positioning: The place where you win.
2. Pursuit: The ability to get to and keep that winning place.
3. Productivity: The ability to exploit that position for optimal cash flow.

For many people, the concept of strategy is limited to only the first P: Positioning. Pursuit is not seen as part of strategy, but part of implementation, which is considered completely different form strategy. To me, this is faulty logic. All three Ps are just different facets of the same gem. You cannot separate them without destroying the gem. It’s all one package. True Strategy includes all three.

Having a “great” position without pursuit is like having a plan to be the first to go to Mars, but not have a rocket. You won’t to get to the moon, no matter how great that would be. Having a “great” pursuit with no position is like running faster than anyone else, but running in random directions. All that running gets you nowhere. None of it works unless all of it works.

The P’s Are Interconnected
Since positions must be “pursuable” and pursuit must be in the direction of a position, it is hard to isolate the activities. They are, by nature, interconnected.

When devising a strategic position, capacity and capabilities must be a key element in the discussion. The idea is not to create a “great position”, but to create a “great position where your company can own.” You can only own a position if you have the capacity and capabilities to achieve it.

For example, I might want to own a low price position, but if my capacity and capabilities are such that I can never be the lowest cost operator, then I will never successfully own the low price position. Although it may be a great position, it is not the right position for me. I need a position where I can be successful in pursuit.

So, in this example, if the pursuit fails, whose fault is it? Well, if the position chosen works against the capacity and capability of the firm, then the positioning is just as much at fault as the pursuit (if not more so).

This also works in the other direction. As companies invest in their capacity and capabilities, they have to make choices about where to invest. Ideally, those investments should be made in a manner which reinforces what is needed to achieve the position. For example, if your position is to win with service, then you should overweight your investments into areas which will increase your capacity and capabilities in providing service. Otherwise, you cannot hold the service position.

So when one starts placing the blame at a lousy choice of position, consider whether the investments in capacity and capability over time worked for or against that position. Perhaps the position would have been highly successful if only the investments in pursuit had been more in line with the position.

In other words, neither positioning nor pursuit can be devised in isolation. Positioning needs to take into account the capacity and capabilities which can be realistically achieved by the firm. Conversely, investments need to consider the chosen position, so that investments become over-weighted in the areas most critical to achieving and holding the position.

Therefore, if things don’t work out, blame should not be isolated to the creators or the implementers, because creation and implementation should have been intertwined. Of course, if the creators ignored the implementers (or vice versa), then perhaps there is some isolated blame. But even here, perhaps the blame should be placed on the leadership who did not demand that the two sides cooperate.

The People Should Also Be Interconnected
The best way to ensure that the positioning decisions adequately understand capacity and capability, and that investment decisions adequately understand how to support the position, is by interconnecting the people working on these issues.

Implementers need to be a part of the positioning decision and strategists need to be a part of the implementation teams. This is not about two different isolated teams working on different issues (creation versus implementation). There is just one issue on the table (success) and both sides have something to offer to improve the work of the other.

Strategists are more likely to create a strategy appropriate for the firm when working side by side with the people who have to implement it. Conversely, implementers are more likely to take the right actions if they understand and have an emotional stake in the chosen position.

Pointing fingers at each other does not build the kind of teamwork and cooperation needed for success. It only creates isolation. After all, it is hard to blame “the other guy” when you both participated on each other’s work. Blame, by nature, creates uncooperation.

If One Fails, We All Fail
At the end of the day, if the company fails, everyone suffers a loss—creators, implementers, stakeholders and everyone else. We only win if everybody wins. There is no victory in a great idea poorly executed or a poor idea greatly executed. There is only victory when the right idea is correctly executed.

Encouraging blame in one direction discourages the cooperation needed for success. Worse yet, it encourages the wrong definition of success. If someone defines success as “I did my part right, but the other team screwed up”, then you get people who are content with failure, provided they can pin the failure on someone else.

However, if you hold everyone accountable when a project fails, then nobody is content with failure. We are more likely to help each other and keep all the parts of strategy properly intertwined if we view our success as depending on others also succeeding. Creators won’t be able to ignore issues of capacity and capability. Implementers won’t be able to ignore the key differentiators in the strategy.

When a project fails, the wrong question to ask is whether the blame belongs to strategy creation or strategy execution. This question discourages cooperation and creates an environment where failure is tolerated, provided the blame is not placed on me. If you want success, the question we should be asking is “How can we better integrate creation and execution, so that the probability of success increases.” This is done by:

1)Defining creation and execution as both being integral parts of Strategy.

2)Making sure the processes are intertwined:
a. Creators take capacity and capabilities into account when creating the position.
b. Implementers overweight their investments in time, money and labor in those areas most critical to the position.

3)Making sure the people are intertwined (creators and implementers are on each other’s teams).

4)Making sure failure is shared (so that there is no tolerance for failure and an incentive to help each other succeed).

The logic behind wanting to find someone to blame for failure is so that we can help prevent future failures. If you follow the suggestions in the summary, I think you still achieve the goal of helping prevent future failures without the negative consequences of the blaming process.


  1. Gerald Nanninga,

    This article is a gem. It shows clearly that the three Ps should work in harmony, if not blame culture will prevail.
    A question: in creativity we encourage people to separate idea generation from idea valuation and implementation. If we choose a poor idea and implement it then again we are doomed to failure. Do you see these processes as one or we should keep a time span between idea generation and idea implementation

  2. Ali Anani;

    You ask an excellent question. Bad ideas can often lead to better ideas, if we use them as starting points for further thinking. If we judge and reject ideas too soon, we cut off that creative process.

    But eventually, ideas must be judged. We cannot afford to run down every rabbit trail. Our limited resources need to be focused. Ideas must be rejected. Some should get rejected prior to implementation. Others need to be tested or further researched.

    Real Options theory tells us that if we do our implementation in phases, we have more opportunities to reject an idea before all our resources are spent.

    Also, good ideas to modify a plan can occur during implementation. These ideas shouldn't be rejected just become they come after an official idea generation period.

    So I guess my answer is that some ideas can be added or rejected at any time. But that being said, we need focus and direction to prevent chaos and dilution of effort. It is a balancing act.