Thursday, May 5, 2011

Strategic Planning Analogy #391: Warts and All

Oliver Cromwell (1599-1658) is a famous figure in English history. Cromwell was a military leader on the winning side of the English Civil War. A few years after the execution of King Charles I in 1649, the monarchy was abolished and the Commonwealth of England was born. Cromwell held the top position as 1st Lord Protector of the Commonwealth of England, Scotland and Ireland from 1653 until his death in 1658.

During that time, many wanted to crown Cromwell as King. But since he fought so hard against the monarchy, he refused the offer. However, after he died, the monarchy was restored.

As befitting of a person of his stature, Cromwell was to sit for an official portrait, to be painted by the talented Sir Peter Lely. During this period, artists were expected to take some liberties with their painting—portraying their subject as more distinguished and handsome than they really were. As a result, Lely was prepared to do the same for Cromwell and make him appear more flattering than reality.

Cromwell, however, would have nothing to do with this. He was a devout Puritan who was opposed to all forms of personal vanity. He wanted a realistic portrait.

Legend has it that he told Lely the following, “Mr. Lely, I desire you would use all your skill to paint my picture truly like me, and not flatter me at all; but remark all these roughnesses, pimples, warts and everything as you see me, otherwise I will never pay a farthing for it.” Later legend shortened Cromwell’s response to be “Paint me as I am, warts and all!”

And as you can see from a comparison of the painting to his death mask (in the picture above), Lely did indeed paint him warts and all.

Part of the strategic planning process deals with understanding the current state of who you are as a company, business or brand. What is your current position? What is your current image? What are your competitive strengths and weaknesses?

When answering these questions, one can fall into the habits of Peter Lely. You can be so used to portraying everything in its most favorable light that it becomes second nature. Lely didn’t let reality get in the way of his painting of portraits. He was used to painting something better than reality. He didn’t ask for permission to enhance his portraits. It was just expected.

In the world of business, this “cloud of favorability” can become so habitual that you don’t even realize that some reality has been lost in your strategic assessment of current positions, images and strengths/weaknesses.

And of course, if you have a distorted point of view for your starting point, you will likely have an unrealistic goal and unrealistic plan to get there.

If you really want a realistic goal and strategic path to get there, then you need a realistic understanding of your starting point. You need to paint the picture of your current state “warts and all.”

The principle here is that assessments of one’s current state should be more like an un-retouched photograph than an enhanced painting. We need a critical eye to discern the complete picture of reality—the good, the bad and the ugly—warts and all.

The Problems With Most Favorable Light
Here are some of the problems which could occur when building a strategy off an assessment whose starting point is more favorable than reality.

1. You may mistakenly choose a position or goal where you stand no chance of winning (because you are not strong enough to achieve it or own it).

2. Not enough effort will be made to shore up weaknesses (causing a further erosion of your business).

3. Competition will be under-estimated.

4. Execution plans will fail because too much was expected from current resources.

5. Customers will not act as expected because they do not love you as much as you think.

6. Too much money will be spent on expansions and acquisitions which fail to deliver on promises due to unrealistic expectations.

7. The stock will eventually plummet once people realize that you have a reputation for execution disappointments due to unrealistic expectations.

In other words, a bad starting point can lead you to the wrong goals and make you ill prepared to achieve the path to get there. From where I sit, this is not a good thing. Underachieving on a path to an unattainable goal is not a good strategic plan.

That is why you need a starting point that includes warts and all. It will help you pick goals where you can truly win and paths that ensure success.

The Problem with Warts and All
The problem is that company leaders often do not always like to hear bad news. Talking about weaknesses and vulnerabilities can sometimes be a “career-limiting” move. Leaders don’t like to hear that something “can’t be done.” There is the fear that the leaders will “kill the messenger” of bad news. Therefore, everything is shown in its most favorable light, like a Lely painting.

So this leaves one with a dilemma. Either tell the truth and lose the ability to influence management or tell a lie and influence management to create a disaster. Not a good set of alternatives.

The Solution
Fortunately, there is a solution to this dilemma. Here are four steps to being able to expose the “warts and all” and still have influence to make a positive difference in creating an appropriate strategy.

Step #1: Anchor Your Discussion on Facts
You will never win the battle of opinions with “warts and all” because:

a) The leader’s opinion carries more weight than yours (the leader gets more votes).
b) The leader’s opinion is usually more favorable and more optimistic (and will reject the warts).
c) Opinions cannot be proven.

The only chance you have is to start with facts from accepted sources. If the irrefutable facts show the warts, then it is harder to ignore them.

And don’t stack the deck or bias the commentary around the facts. Show a balanced approach without emotion. Otherwise you will lose credibility. Let the facts tell the story by themselves. Let them come to the conclusion on their own. This will create greater “ownership” of the conclusions by management.

Step #2: Use Other Voices
It is one thing for you, as an insider, to point out the warts. It is quite another thing if you can have customers, suppliers and partners pointing out the warts. Their voices carry more weight. It is hard to maintain an opinion of invincibility when your own customers are telling you about all of your warts.

I was reminded of this when looking at a recent piece of consumer research by Harris Interactive. According to this study, 77% of the public says that Corporate America’s reputation is bad. I’m sure that this is a lower opinion than the opinions of the leaders of Corporate America.

Go to Google and enter your company or brand name along with the word “sucks.” Usually this search will lead to all sorts of negative commentary about your company. In a world of Twitter, Facebook and other such sites, there are ample ways to track what people are really thinking about you. And if you want to get a bit more scientific about it, you can do surveys.

Remember, the most important opinion about your image is the image held by customer, since that is the opinion which determines your success. Listen to what they have to say. They won’t ignore the warts.

Step #3: Play the Court Jester.
In medieval times, the only one who could get away with giving bad news to the King was the Court Jester. He could get away with it because:

a) It was done in a light-hearted, humorous, entertaining way.
b) The jester was not seen as a threat to the throne.
c) It was an accepted role of the position.

I worked with someone who was quite good at assuming the role of court jester. He was entertaining and appeared non-threatening (in a political power sense). It became accepted that he could speak about all the bad news without fear of reprisal. This approach was quite effective.

I have used a similar approach of positioning myself as the “eccentric genius.” Eccentric geniuses are usually well respected without appearing as a political threat. It allowed me to successfully be the bearer of bad news.

Step #4: Supply a Desirable Alternative
Often times, management embraces a distorted point of view because it is the only way they can see a bright future. However, if you can show them an alternative future which is still bright and desirable, yet includes the warts and all, then they are more likely to accept the more realistic starting point.

In the end, people want a good outcome. It is still possible to have good outcomes when starting form a position full of warts. You just have to look a little harder for it. Once you get leaders salivating over a good outcome and show that it can be achieved even if we are a little weaker than we think, then it has a good chance of being accepted.

So link the bad news about today to some good news about how this can be turned into something great. For example, you may not be good enough to own the whole market, but you may be good enough to own a desirable niche if you focus on it. And that niche may be more profitable than owning the mass position.

Unrealistic starting points lead to plans that usually fail. If you want success, you need to start with a realistic understanding of who you are—warts and all. In order to successfully portray a less than favorable point of view, it helps if you a) Anchor Around Facts, b) Use Other Voices (Like Customers), c) Play the Court Jester, and d) Supply a Desirable Alternative.

Don’t be afraid of the truth. It can be your friend if you follow the advice above.

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