Thursday, October 18, 2012

Strategic Planning Analogy #472: Watering Seeds

This past summer was unseasonably hot and dry.  My lawn suffered from the harsh weather.  As a result, I needed to plant some grass seed this fall to fill in the dead spots. 

Getting grass seed to grow takes a lot more effort than just throwing some seeds on the ground.  First you have to loosen the soil.  Then you have to keep watering it on a regular basis for several weeks.  Then you have to fertilize it.  That was tough work.  Tossing the seeds on the ground was the easy part.

At first, I thought I wasn’t watering the grass enough.  But then I saw a cardinal giving himself a bird-bath in a puddle where I had watered.  So I guess I watered enough.

And now, my lawn is covered with new grass.

Strategy is like grass seed.  It is something new sown into the business with the hope of increasing the growth and value of the company.  And if you want to take the analogy further and think of US dollars as “greenbacks,” strategies are the grass seeds that create that green (money).

The problem is that just because one throws seed on the ground does not guarantee that the growth will occur.  If the ground is hard and dry, the seeds will just sit there until the birds eat it.  Similarly, if strategy is just thrown at a company, there is no guarantee that the strategy will take root. Just as it took a lot more than just tossing seeds to get grass, it takes a lot more than just delivering a strategy in order to achieve a strategy.

If you see the role of strategy as merely delivering a fancy document with all the clever ideas on it, then all you have done is just toss seeds at the company.  The document will then most likely just end up on a shelf and never be touched again.  It’s as if the birds ate all your seeds.

No, if you want a strategy which gets implemented, you have to get involved in all the other work—the ground preparation, the watering and the fertilizing.

The principle here is that strategies only succeed in a company which is committed to making it succeed.  And that does not usually happen naturally.  In fact, there is usually active resistance to strategies because they require changing the status quo—and that bothers those who are comfortable or have power in the status quo.  Therefore, if you want to successfully implement a strategy, you can’t just give it to the company—you have to actively counter that resistance as part of the strategy process. 

We will refer to those actions as preparing the soil, watering, and fertilizing.

1. Preparing the Soil
In grass-growing, you prepare the soil before planting the seed. The idea is to loosen the soil so the seed can penetrate and get buried in the soil.

A similar activity needs to take place in strategy.  Before presenting the strategy, you need to first prepare the audience so that the strategy will penetrate their wall of resistance.  Since that wall of resistance is in their minds, then the mind is where you need to prepare the soil.

The core idea is very simple.  People act based on the way they think.  Therefore, if you want to change the way they act, you must first change the way they think.  In other words, if you want the leaders embrace and willingly implement the strategy, then you must first get them to think that it is right to abandon the status quo and embrace the new strategy.

There are several ways to change that mind.  The first approach is “The Burning Platform.”  This is where you change how people think about the status quo.  The idea is to convince them to believe that remaining with the status quo is not a viable option for the long term.  It does not work in the changing environment.  Instead, it is like being on a platform which is burning up.  It is only a matter of time before it is all burned up.   And if we do not jump off that platform, we will burn up as well.  It is only a matter of time.  So we may as well jump as soon as possible.

The second approach is “The Locked Door.”  The idea here is to paint a picture of a glorious and prosperous future—a place so desirable that it makes your executives salivate with anticipation when thinking of it.  Then you convince them that there is a locked door between them and that glorious future.  That locked door is the status quo.  It is impossible to reach that future as long as we cling to the status quo, because that approach cannot get you there.  It is only by tearing down the status quo that we can enter that glorious future.

The first approach of thinking prevents actions of turning back and the second approach of thinking increases enthusiasm for actions moving forward.  Depending on the nature of your soil (type of resistance) you may need one of these or some other thinking approach to prepare them for proper acceptance and action.

2. Watering the Soil
Watering the soil is an intensified effort for the period immediately after planting the seed.  It is not a one-time act, but needs to be done continually until the grass seed has fully sprouted.  The strategic planning equivalent is working intensely with executives until they see the connection between the long-term strategy and their daily actions.

If executives do not see a connection between their daily decisions/actions and the long term strategy, then they will not change their daily decisions or actions.  And, as we all know, if the daily actions don’t change, then the long-term outcomes will not change.  The real strategic outcome of a company is the cumulative result of all those daily actions (not the result of that document on the shelf).  So if you want to get the new strategy implemented, if must be meaningfully represented at the point when daily decisions are made.   Watering the seed then means that strategists need to be present when daily decisions are being made—to teach people how the new strategy should influence how those decisions are made.

For example, new strategies are typically about winning a particular position.  And in order to have enough emphasis in the winning area, one usually needs to makes trade-offs with areas less critical to that success.  Therefore, our daily actions need to make the right trade-offs so that we choose in the direction of the winning position.  And if intensive effort is not placed on training people to make the right trade-offs, then wrong trade-offs will occur.

Think back a few years ago to the crisis at Toyota.  Their strategy was built upon winning in dependability.  However, for awhile, management’s daily decisions were not keeping dependability at the forefront.  Ideas of growth, expansion, and low prices got in the way.  As a result, dependability suffered (numerous crashes, lawsuits and recalls) and Toyota had a huge set-back.  Management had to go back and re-water the soil—to get everyone to realize that dependability is top priority and must penetrate every decision made on a daily basis.  Once the soil was sufficiently watered with that intensive effort, dependability came back and so did the prospects at Toyota.

3. Fertilizing the Soil
Fertilization is a brief activity which takes place at set intervals.  For example, many recommend fertilizing grass 5 times a year.  The equivalent activity in strategy is the strategic review.  The idea here is that just as periodic fertilization keeps the grass on track to grow, periodic strategic reviews help keep the strategy on track to proper implementation.

There are several methods to do this.  One is the dashboard approach.  The idea is to set desired near-term outcomes related to the strategy.  These are usually referred to as KPIs, or key performance indicators.  You then measure actual performance against the KPIs and display them on a dashboard.  Periodically you look at the performance on the dashboard and make the appropriate adjustments to get back on track.  Depending on how broadly you want to measure the strategy you will end up with different dashboards.  In the broadest approach, you end up with something like a Balanced Scorecard.

A strategic review which will occur less frequently is the review of assumptions.  The idea here is to periodically go back to the core assumptions behind the strategy to ensure that they are still relevant.  If they are no longer relevant, then it is time to modify the strategy.  Sometimes, this process makes use of scenario planning.  In scenario planning, several potential environmental assumptions are examined.  Strategies are developed for the most like sets of assumptions.  Then, at the periodic reviews, one looks to see which scenario is coming to pass, so that  one will know which path to take.

A third approach for strategic review is known as stage-gating, or real options.  The idea here is that large strategic initiatives are broken down into smaller parts.  Each part optimizes the strategy based on what is known at the moment the stage is started.  Then, based on what is learned over the interim of that stage, you choose the proper next stage, and so on.  The periodic reviews occur for each stage.

An example would be in oil drilling, where one buys an option to drill well before drilling begins.  Then one examines in more detail the likelihood of that being a good place to drill.  If yes, the next stage is to prepare drilling.  If no, you let the right to drill lapse.  The idea is to maximize action while minimizing risk.

Just having a strategy does not guarantee that the strategy will become a reality in the business.  To increase the likelihood that the strategy comes to pass, you also need three other activities:

  1. Preparing the Soil--Changing the way the company thinks, so that they naturally want to work hard to make the strategy come to pass.
  2. Watering the Soil—Intensive effort up-front to teach people how to incorporate the essentials of the strategy into everyday decision-making.
  3. Fertilizing the Soil—Periodic strategic reviews in order to make sure everything is on track, that the assumptions still hold, and that periodic adjustments can be made.

You can’t prepare the soil, water the soil and fertilize the soil if you are locked up in the ivory tower at corporate.  No, you have to get your hands dirty and get out into the field where the soil is.

1 comment:

  1. Gerald Nanninga,
    This is a great post as usual. I like the metaphor. Plantation of seeds and plantation of strategies. The analogy is simply great