Monday, July 9, 2012

Strategic Planning Analogy #460: Who’s the Greatest

If you get sports fans talking long enough, the conversation the conversation will eventually get around to an argument over who was the greatest.  Who was the greatest athlete?  Who was the greatest coach?  Which is the best team?

The problem with these types of arguments is that the individual greatness is tough to separate from the given situation.  For example, there are coaches who were very successful coaching one team, but then did poorly coaching another team.  Same coach with supposedly the same brilliant coaching strategies and skills, but different results.  So is the coach great or not?

The same is true for many athletes.  An athlete might have great success playing on one team but not when playing on another team.  Same athlete with the same skills, but different results depending on the rest of the team.  So is the athlete great or not?

And, of course, most teams can have a streak of very successful years, followed by a streak of poor years.  Is it a great team or not?

In the world of business, one can also find heated arguments about greatness—who was the greatest CEO, the greatest business or the greatest business strategy.  In these discussions, you run into the same problem as with sports—the situation plays a major influence.  Some CEOs have great success at one company but fail miserably at another.  A company regarded by business experts as great in one year may go bankrupt a few years later.  Just like in sports, situations can change, causing otherwise great CEOs and companies to suddenly not look so great (or vice versa).

The one that is most relevant to me is the discussion about great business strategies.  Many times, a great strategy on paper may not work out so well in practice.  So was it a great strategy or not?  Should the strategists be rewarded or not?

The principle here is that strategies should not be judged on how great they are.  Instead, they should be judged on how SUCCESSFUL they are.  After all, if the company does not benefit with success from the strategy, what is the point of having it?  Being proud of a “great” strategy on a piece of paper that never gets properly executed (for whatever reason), isn’t much to be proud of in my opinion.

And since success is based on a lot of situational factors (like in sports), strategists need to concern themselves with these factors if they want to see success. The truly great coaches adapt their strategies to the particular situation at hand—the athletes they have, the opponents they play, and so on.  In a similar manner, business strategists, need to look at the larger context in order to be sure that the strategy ultimate leads to success.

Moving from merely having a great strategy to having a successful strategy requires four steps.  These are described below.

1) Moving From Ideas to Actions
It all starts with a great strategic idea—what to be, what winning looks like.  But, if you have no clue how to bring this idea to life, then all you have is an idea.  Dreams are nice, but eventually you have to wake up and face reality.  For example, a sports team can dream about winning a championship, but that’s not enough to secure the championship. The team has to take action—play games, win games.

Moving a great strategic idea from a dream to a reality is the same. You have to convert the dream into action plans.  This doesn’t mean that every detailed action needs to be spelled out in advance.  However, the big action requirements need to be understood. 

A good coach doesn’t just tell his team to “win” and then walk away.  No, he draws up some game plans and set plays.  He devises actions that will increase the likelihood that the team will win.  In the same way, successful strategies are more than just declarations of lofty targets.  They also outline the path of actions needed to get there.

2) Moving From Actions to Skills
So far so good, but this is still not enough.  A great coach could have a great strategy and a great gam plan..  But if the players on the team are incapable of executing the strategy and game plan, then the coach will not succeed.  Somebody has to do the actions.  If the people cannot do the actions, the actions won’t get done.

That is why a great strategy not only includes an action plan, but also a plan for those doing the action.  In sports, it usually boils down three things—having athletes of the proper skill levels, having athletes properly trained, and having the proper equipment and facilities. 

A similar situation exists for businesses.  To execute the action plan you need skilled people who are properly trained and have all the tools and infrastructure they need.  In the past, I have referred to this as the “pursuit" portion of strategic planning.  The idea is that the plans don’t get done by themselves—you have to pursue them.  The pursuit portion of strategic planning makes sure you have all the pieces needed to win—competencies, capacity, and connections.  I spoke in more detail about these in an earlier blog.

Remember, strategic success relies on having the right people properly equipped.  Therefore, strategies need to consider both the human resource element and spending on resources.

3) Moving From Skills to Exploitation
Okay, so now we have a strategy, an action plan and some skilled players.  But that still does not guarantee success.  There have been dream teams in the past with all sorts of skilled players who still had disappointing performance.   Maybe the team chemistry is wrong.  Perhaps there are too many selfish egos in the way preventing teamwork.  Perhaps a key player doesn’t want to be on the team and is sulking rather than playing.  Perhaps the team is not serious about doing what it takes to win.

Whatever the cause, the execution is below the levels necessary to win.  Even if sufficient skills and sufficient training/equipment is there, if the athletes are not sufficiently motivated, the plan will not be properly executed.  The skills need to be exploited to be useful.

That is why great coaches not only work on game plans, but also work on team motivation.  Both are needed if you want the plan to succeed.  It is natural and expected for coaches to do this.  Yet it is not usual and expected that strategists would do this.  I think that is a mistake. 

It is common for strategist to hand off the plan to those executing it and then walk away.  And if the plan fails, the strategist blame “poor execution.” “It’s not my fault,” they say. “It’s the fault of those who are poorly executing that great plan of mine.”  We wouldn’t accept it if a coach used that excuse in sports.  Why do we allow that excuse in business?

No, if you want a truly great strategy, you have to include a process which properly motivates employees to aggressively and enthusiastically execute the key elements of the plan.  Do the people know what you want executed?  Are the compensation systems set up to reward the proper long term strategic behavior?  Are there motivating pep talks?

4) Moving From Exploitation to Strategy
Often times, even having action plans, skilled personnel and motivation is not enough.  For example, on a sports team, a coach may find that the people have skills, but not the right skills or right balance of skills.  Perhaps a star player retired or got injured, leaving a big hole.  Perhaps the matchup with competition is not what is desired.  In these cases, no matter how well thought out, the original plan is in trouble.

Great coaches do not blame these circumstances for their problems and accept failure.  No, they adjust.  If you don’t have the right kind of team to execute the original plan, perhaps you need to adjust the plan to better exploit the advantages you do have.  Look at what you have to find a way to win.

The key is not to have a great strategic planning document, but a successful business.  The environment the company is competing in is fluid and ever changing.  Internal and external changes often require adjustments to the overall plan.  This does not mean that strategies should be in constant flux.  But it does mean that adjustments may be necessary.

Planning is not a one-time event, but an on-going process.  It is a continuous cycle from strategy to action to skills to execution and back again to strategy. 

The goal is not to have a great strategy, but to have a successful business.  Therefore, the strategist should not just come up with a great idea and walk away.  No, the process needs to be expanded to encompass all the elements needed to convert a strategy from an idea to business success.  That includes the development of action plans, plans to ensure the proper people/infrastructure are in place, and plans to properly motivate the right actions.  And if, going through this larger process you notice that the original plan is no longer most appropriate, take time to reformulate the plan to best exploit the situation at hand.

The greatest strategists are the one who create the greatest company successes, not the ones with the greatest portfolio of mission and vision statements.

1 comment:

  1. Hi! I like your post.
    I came to realize that it is more important to be get planned for your work.You can analyze your progress with a proper strategy. Thank for sharing your thought with us.