Monday, August 1, 2011
Strategic Planning Analogy #405: Three Steps to Success
Awhile back, I wrote a book on strategic planning and sent it off to the publishers. Below is a very rough and condensed paraphrase of the type of ongoing dialog I had with the publisher.
Publisher: Your book is very comprehensive and integrated. In one place, it provides a complete approach as to how to do strategic planning.
Me: Thank you for the compliment.
Publisher: No, that was a criticism. Business leaders do not want to buy an all-inclusive, integrated, comprehensive approach to planning.
Me: Why not? Isn’t a comprehensive, all-inclusive, integrated approach the best way to do planning?
Publisher: Maybe so, but for a business person to buy into YOUR comprehensive approach, it requires the reader to abandon THEIR current approach. Business leaders have big egos. They’ve been successful in the past…which is why they are currently a business leader. Therefore, they think they already have a pretty good idea as to how to do things well. All they are looking for is a handful of useful tips they can add to their knowledge base to make them a little better at what they already do. Your book does not do that.
Me: So lists of simple tid-bits about planning sell, but writing about comprehensive planning approaches fail?
Publisher: That’s right.
It was not too long after that conversation that I got the idea to write about planning as a series of short, stand-alone articles. Each would be based on a little story with an analogy. It lead to my book “Strategy is Like Barbeque Sauce,” which in turn lead to my starting this blog.
This same idea for books on planning applies to any other communication about planning. Just as a great integrated book on planning is of little value if the audience doesn’t want to buy it, a great integrated plan is of little value if those who have to implement it don’t want to buy into it.
In writing my first book on planning, I made the mistake of confusing the principles of good planning design with the principles of good planning communication. Well designed plans tend to be complex and integrated—a holistic approach. The idea is to design something where the power of the outcome exceeds the sum of the individual parts. Tradeoffs are made throughout the organization in order to get everything aligned in the direction of competitive advantage. This creates a synergistic strength which is stronger than any individual action and difficult for others imitate.
A great example is Apple. Their success is due to taking a complex and integrated approach to their strategy. They didn’t just introduce another mobile phone. They introduced an entirely new integrated business model—phones, apps, app store, and Apple stores, with cool design and easy integration holding it all together.
My mistake was to think that just because plans should be complex, integrated and holistic, so should be the communication of the planning process. But this fails to take into account the stakeholders of the strategy. Stakeholders like things to be simple and easy. For example, the approach used to introduce the iPhone was very simple and focused on ease of use.
And, as the publisher said, you don’t want to insult the implementation stakeholders or bruise their egos, either. They just want simple lists to add to what they already know.
The principle here is that two separate skill-sets are needed to ultimately succeed in planning. One is the skill-set for plan design and the other is the skill-set for communicating the plan execution. The characteristics of these skill-sets are different, and you will have significant difficulties if you confuse the two.
The Two Skill-Sets
The skill set for plan design is all about a holistic, integrated approach. It is about finding a unique way to put all the pieces together in order to win.
On the other hand, the skill set for plan execution is all about simple check lists. It is about dicing up the work into easily managed (and measured) chunks which can be assigned to people (and easily added to their daily work load).
If you don’t believe me about the power of lists, just look at the business web sites which provide lists of their most popular articles. There always seems to be a disproportionately higher number of articles with a number in the title—a number referring to a small checklist. For example, current articles in the American Express Open Forum include:
• The Leader's Checklist For The Startup Manager
• The Best Advice I Ever Received: 3 Top Executives On Tips That Count
• Top 10 Excuses For Not Going Global
• 4 Marketing Ideas That Are Sure To Make A Splash
The problems arise when the checklist approach is applied to design or the integrated approach is used for execution.
Problem #1: Checklists Used During Design
If check lists are so popular why not use them during the design stage? I’ll tell you why. It doesn’t lead to a good plan design. You can put all sorts of steps on a planning checklist—looking at strengths, looking at weaknesses, looking at the environment, writing mission statements, and so on. If you do each one separately and just check it off when it is done, then the work is not building to a creative solution. At best, you will get some small incremental improvement.
No, if you want truly innovative and revolutionary strategies, you need to change your world view and your thinking on complete business models. You need to rethink the entire process, as Apple did with the iPhone. It is a messy and creative process, requiring one to hold a lot of concepts in one’s head simultaneously. It is not a series of discrete tasks that can be done one at a time. There is a back and forth tug on various trade-off options and scenarios. The secret is in the gestalt—how the parts play together—not any individual piece or pieces.
Just remember the Edsel. Each part of the design of that automobile was individually optimized, like a checklist. The grill was designed separately from the headlights or the hood, or the tailfins, and so on. Although each part was designed well on its own, when all of it was put together on the car, it was a disaster. There was no gestalt. As a result, there was no success.
Problem #2: Integrated Approach Used During Execution
However, just because a holistic approach is necessary for design, it does not mean that the approach needs to continue to dominate through execution (as I discovered with my book). Although the integrated approach may allow people to envision what the whole picture should look like, they may not have a clue as to what their particular role is to make it a reality. The end result can be anarchy. Although a little anarchy is good in the design stage, it is poison during execution.
Unlike the Edsel example, if you instead start by first designing the whole (the gestalt), you can then later begin chopping up the tasks into each part which needs to get done (the opposite of the approach used for the Edsel). The constraints of the gestalt are already known, so the individual work on execution of each part will still work towards creating the greater whole.
By chopping up the tasks into lists, one gets several advantages. First, you can assign responsibility for each task. That way, everyone knows what they are to accomplish. Confusion is eliminated. Second, with responsibility comes accountability. Management knows who to deal with when the execution falls short of intended results. Third, it is easier to develop metrics for each task. That way, you can better measure performance. Fourth, by chopping up the tasks into modules, you can create a more sophisticated time-line for execution. Finally, it is easier to develop a motivational incentive plan when the tasks are more narrowly defined and more specifically assigned.
The skills needed to design strategy are different from the skills needed to implement the strategy. Strategy design requires a holistic gestalt approach—simultaneously building the design of the entire business model. Strategy execution requires cutting the gestalt into its component pieces (and put on a checklist), so that responsibilities and accountabilities can be assigned and measured. Therefore, strategy design and execution should each be approached differently—using the approach consistent with its unique characteristics. Problems ensue when the approaches are flipped. For example, the individualized checklist will never lead to revolutionary, innovative strategy design. At best you will get incremental advances. At worst, you will design the next Edsel. Similarly, if the implementation is left at only the gestalt level, you will end up with confusion and anarchy, not efficient execution.
Did you notice I titled this blog “Three Steps To Success”? If that’s the kind of title that appeals to people, then I’ll use it. Think about that when giving a title to your strategic execution. I know that a lot of successful firms select about three key strategic items they want to accomplish that year and then give them a fancy title like Key Result Areas or Key Strategic Initiatives. If you give a great title to the checklist, it will get more attention during discussions.