Tuesday, March 1, 2011

Strategic Planning Analogy #379: Strategy Leash

Young dogs seem to think that everything outdoors is an exciting invitation for investigation. Every object, every smell, and every other animal seem to call out to their wilder nature. The young pups want to run and see it all, smell it all, chew it all or leave their mark on it. This makes taking a young, untrained dog on a walk quite a challenge.

My daughter has a young, relatively untrained dog named Stella. Stella is large enough and strong enough to make holding her back a challenge and a half. Whenever I take Stella for a walk, I am constantly fighting her urges to leave the path. She always seems to dragging me with her leash over towards something to put in her mouth—be it a paper food wrapper she finds on the ground, or an old mitten, or an abandoned toy.

Other times Stella struggles against her leash to get across the street to sniff another dog locked up in its backyard. Of course this gets the other dog all worked up and barking as well. And if Stella sees a squirrel, all bets are off. She will practically drag me down the sidewalk to get to that squirrel.

My action with the leash is not just to pull her back. Sometimes I have to drag her forward. Many of the trees and bushes have interesting smells and Stella will freeze in her tracks for what seems like forever to smell them (and to leave a smell of her own). In those cases, I have to try to use the lease to drag her away.

Although the purpose of those walks is to exercise Stella’s legs, I think my arms get even more exercise trying to control Stella with the leash.

The purpose of strategic planning is to design a path to reach a more prosperous future and help the company move up that path. Unfortunately, a lot of companies are like that dog Stella. They have trouble sticking to the path.

Sometimes companies get distracted by exciting looking opportunities off the path and they want to leave the path to pursue them (like Stella seeing a squirrel). Other times, companies resist the change of moving forward and are as hard to budge as when Stella gets busy sniffing a tree.

The only way I could get Stella under control was by aggressively using a leash. As a strategist, you need a leash to control your company as well.

The principle here is that it is not enough for a strategist to just draw the map and show how to get to the future. The strategist needs to be right alongside for the entire journey—to keep the firm moving along the path—like I needed to do with Stella. And to do that, you need a strategy leash.

What is a strategy leash? Well, just as a dog leash connected me to Stella, a strategy leash connects a strategist to strategy implementers. By being connected, one has more control over the actions on the other end of the leash.

In many companies, there is no leash connecting the strategy to the implementers. The implementers run loose like Stella would if I didn’t control her with a leash (and I know that would cause all sorts of major problems if Stella got loose).

Too Many Companies Lack a Leash
Back in October of 2005, Kaplan and Norton had an article in the Harvard Business Review, called “The Office of Strategy Management.” In this article, they discussed some statistics about the lack of connection between strategic plans and implementers:

a) 60% of companies do not link strategic priorities to the budget.

b) Two-thirds of HR and IT organizations develop strategic plans not linked to the organization’s strategy.

c) 70% of middle managers and more than 90% of front-line employees have compensation not linked to strategy.

d) The vast majority of executive teams spend less than one hour per month discussing strategy.

e) 95% of employees in most organizations to not understand their organization’s strategy.

It is no wonder that most companies are disappointed in how their strategies are executed. They’ve let the dog loose without a leash and then wonder why the dog doesn’t stay on the trail.

Here are three reasons why a strategy leash improves execution.

1. It Keeps a Firm on Focus
Just as lots of sights and smells would entice Stella to run off the path (if not on the leash), business implementers get enticed to stray off the strategic path. There is always some hot, new thing trying to grab their attention. However, not all hot new things are appropriate for your business.

Just because the new iPad is hot or Facebook is hot does not necessarily mean that your company should abandon everything it is doing and try to imitate these products. First of all, those strategies are already taken and it is unlikely you could unseat the current leaders. Second of all, the capabilities needed to succeed in that space may not have anything to do with your own internal capabilities. You my not have what it takes to win there. Third, why try to become an also-ran in a hot (but crowded) space if it means abandoning a strategy designed so that you can win?

Even though Stella wants to get loose and chase every squirrel she sees, Stella does not ever get the squirrel. They are too good at escaping up a tree. Just as the squirrel eludes Stella, most of these hot new things will elude your company if you run after them. Not only will you not catch the squirrel, you will no longer be on the path to catch your own strategy. Instead of both, you have neither.

To win, one needs a winning plan and a focus on achieving it. A firm’s limited resources need to be aimed at the strategy. If the resources get diluted into too many random decisions of the moment, there will not be enough power to win.

That is why you need a strategy leash connected to whenever meaningful decisions are being made about how to use those resources (time, people, money). You need to be there when actions are being determined so that you keep the company on the path, rather than being off in the distance, watching them hopelessly trying to run after every squirrel they see. If you only have a voice once a year during the planning cycle, then you cannot stop the firm from running around like a dog on the loose the rest of the year.

2. It Keeps Things Moving
Many people in business are reluctant to change. They do not want to move into the unknown. They resist moving forward just like when Stella refuses to stop standing still to sniff a tree. You need a strategy leash to tug on to get them moving forward.

The “tyranny of the immediate” tends to freeze people into the present and make it harder to focus on getting to the future (see here, here, and here). That is why strategists need to be connected on a regular basis to help people get beyond the tyranny of the immediate and think about long-term issues.

3. It Allows Flexibility
The goal here is not to dictate every move made by every implementer. Implementers need flexibility to use their skills in adapting the strategy to the environment. That is why, so long as Stella stays on the path, I give Stella a long leash. She is free to move around as she sees best, so long as those movements are consistent with moving forward on the path.

The same applies to business. Strategies work best when implementers are free to use their expertise as part of the implementation process. So long as they are moving down the path at a good pace, give them enough leash to add their improvements.

How to Create A Strategy Leash
So how do we create strategy leashes? One way is by making sure strategists have a voice at the places where day-to-day implementation decisions are being made on a daily/weekly/monthly basis. They need to be invited to the meetings where choices are made about what to do, even if none of it sounds very “strategic” at the moment. After all, a journey consists of all the steps one takes. Every step which leaves the path hurts the overall journey.

Second, link self-regulating tools to the strategy. People tend to act in accord with how they are rewarded, how they are reviewed, and how their budget is set up. Use budgets, reward systems and other such tools as a leash by making sure that the motivation tools motivate people to implement the strategy. Stop those awful statistics mentioned by Kaplan and Norton by making sure everyone knows the strategy and is rewarded for implementing it.

Third, Kaplan and Norton go even further to suggest forming a new Office of Strategy Management—a small team of people whose sole purpose (and only job) is to act as the strategy leash. This may or may not be appropriate for your situation. However, the general principle is sound—the more the strategy leash is seen as a valid part of a job description, the greater the chance it will be used.

To make sure strategies are properly implemented, one needs a strategy leash—a strong connection between the goals of the strategy and daily decisions about what gets done. The leash holds back company desires to stray off the path, tugs people to move forward when they want to stand still, and provides some freedom of movement when moving along the path. This can be done by getting strategists more involved in the daily decisions and by connecting motivational tools more tightly to strategic goals.

Years ago, I had a dog of my own to take on walks. Her name was Barkee. I did a good job of training her, so that eventually I could take Barkee on walks without a leash (and she still stayed near the path). If you can train your company to naturally think strategically, you might be able to loosen up on the leash as well.

1 comment:

  1. Gerald Nanninga,

    This is not a cat on a hot roof; this is a dog on a hot roof.

    Great and appealing post.