Strategic Planning Analogy #539: Great Players Make Lousy Coaches

THE STORY
Have you ever noticed that top athletes usually make for lousy coaches?

The reasoning behind this is simple. The great athletes have natural skill and abilities far above the norm for the sport. They are naturally good because they are naturally gifted. It all comes too naturally for them. They don’t even really have to think about it. They just naturally perform well.

As a result, top athletic performers have no real connection with the struggles of the average athlete. The top athletes never had those kind of struggles. They never had to think about how to overcome them.

As a result, the top athletes are relatively clueless as to how to coach the average player through all of this. Their coaching can sound a little silly to the average player when they say things like:

“Just hit the ball to where you want it to go, like I used to do.”

“Just run a little faster, like the speeds I used to go.”

“React faster to the action around you, like I did.”

“I don’t know how I did it. I just did. So you do it, too.”

That’s why average players usually make better coaches. They’ve had to struggle. They’ve had to think of ways to overcome the struggles. They’ve had to find ways to motivate themselves when times were tough. They’ve had to listen more closely to the teaching of their coaches. They’ve had to try a lot of different approaches to the game in order to find their edge.

The journey of the average player is usually a better learning ground for gaining the skills needed to be a coach. So don’t hire the superstar player to coach your team. Hire average.

THE ANALOGY
The CEO is sort of like the coach of a team. Sometimes when looking for the next CEO, we look for the replacement among the best performers in the company. Since they are such great performers, then they will be a great CEO, right?

But that’s like saying the best athlete will be the best coach. It is not necessarily true and is most likely a false assumption.

Therefore, we need to be very careful when choosing our business leaders. The pool of our best performers may not be the best place to look.

THE PRINCIPLE
The principle here is that different roles require different core competencies. Therefore, excelling in one role may make you unsuitable for another role if the needed competencies are radically different between the two roles.

For simplicity’s sake, we will illustrate this principle by dividing a company’s work force into three layers: The Frontline, Mid-Management, and Leaders. As we will see, excelling at one lever does not ensure success at another level.

The Frontline

The frontline is where the basic work of the business occurs—the manufacturing of the manufacturers or the service of the service industries. Success at the frontline is all about doing your task and hitting your numbers. If you have a specialty, success is about being the best at doing that specialized work.

Therefore, the core competencies to excel at the frontline are twofold: a) understanding your task, and b) doing it at the speed and quality required (if not better). Do that well, and you will be a frontline superstar.

Mid-Management

Mid-management is the connection between the leaders and the frontline. Mid-management tries to appease the leaders by making sure the expectations of the leaders are met by the frontline.

Therefore, the core competencies to excel at mid-management are to: a) understand what the leaders want, b) motivate the front line to get it done, and c) report the results back to top management. Do that well, and you will be a mid-management superstar.

Leaders

Leaders run the company. Their job is to decide what the company should be doing and make sure the business has the competencies, capabilities and resources to pull it off.

The core competencies of leaders are: a) Vision, b) Communication, and c) Appeasing all the conflicting demands of the various stakeholders (shareholders, bankers, employees, the community, etc.). Do this, and you are a superstar leader.

The Difficulty of Moving Between Layers

Although these are very simplified descriptions, they do show how each layer in an organization is different. The core competencies are different as well.

The top frontline performers are great doers of a task. But that doesn’t mean they will continue to be top performers if promoted to mid-management. Mid-managers are not expected to be great doers of a task. They are expected to be able to motivate large numbers of other people to do a task. That’s a different skill entirely.

It is like automatically expecting an athlete who was naturally great at throwing to be naturally great at teaching others to throw. As we saw above, that tends not to be the case. And so is the case in the business world.

Since the top frontline person succeeded by doing, they tend to revert to that when a mid-manager. The result is unhealthy micro-managing—an attempt to continue doing rather than motivating.

Similarly, if you find a top mid-manager, that does not necessarily mean that they will excel at leadership. Mid-managers excel at getting someone else’s goal accomplished. Leaders, by contrast, are the ones that have to dream up what is to be accomplished.

The skills needed to get a task accomplished are far different from the skills needed to determine what should be accomplished. Therefore, promoting a top mid-management performer to leadership does not guarantee success.

Therefore, when a top mid-management performer is promoted to leadership, they resort back to their old skills of getting someone else’s vision accomplished. So they take the vision already in place and keep pushing that agenda, even if that agenda is no longer relevant. They don’t change the vision with the times, because they weren’t skilled at that vision thing. So the company becomes obsolete and dies.

Relevancy for Strategy

Great strategies rely on great insights, great vision, and an ability to think outside the box. These are not qualities needed to be a superstar at the frontline or mid-management. Therefore, if you promote from the top of the frontline and mid-management ranks to get your top leadership and strategic leadership, there’s a very good chance you will not get those necessary qualities. Therefore, you run the risk of having lousy strategies.

It drives me crazy when I see companies promote people into key strategy positions who do not have the core competencies for strategy. They may be great at budgeting, financial models, implementation, or operations, but that doesn’t mean they have a clue about insights and visioning.

There are three ways to mitigate this problem, First, hire for the part. If you want a great leader at the top or in strategy, hire people with the skills needed for that part. Instead of looking backward to see how well a candidate was at doing or implementing, look forward to see how they are at visioning and insights. So what if they were only mediocre at doing or implementing, so long as they are great at what the new role requires.

Second, train your leaders to be better at the skills of leadership. There are ways to make people better at the skills of visioning and insight. Invest in your leaders to shore up these key competencies.

Third, don’t be afraid to bring in the experts. There are all sorts of strategy experts out there who would be happy to consult with you. They have the proper skills. Take advantage of them.

SUMMARY
Just because one is a top performer at one level of an organization does not mean that person will excel when promoted to the next level. Since the core competencies needed at the new level are different than the former, there is probably a greater likelihood that the person will no longer be a top performer after the promotion. To minimize this problem:

1. Promote people based on the new skills rather than the old.
2. Train people to become better at the new skills.
3. Hire experts/consultants to help.

FINAL THOUGHTS
Don’t hire a superstar athlete when what you need is a superstar coach.

Strategic Planning Analogy #515: Follow the Recipe

THE STORY
The nice thing about a “To-Do” list is that you can pretty much do anything on the list in any order you want. The individual items on the To-Do list are independent of each other. If I choose to clean the garage first and mow the lawn second, that’s okay. Or if I choose to mow the yard first and clean the garage second, that’s okay, too. Or if I can get a friend to help me and do both at the same time, that’s also okay. All that matters is getting the stuff on the list done.

A recipe doesn’t work that way. Things need to be done in a particular order. You have to measure the ingredients BEFORE you mix them together. You have to mix the ingredients BEFORE you bake them. If you bake before mixing or mix before measuring, you will have a mess on your hands. The recipe will not turn out as desired. Unlike a To-Do list, a recipe needs to be done in the proper order.

This is especially true if you expect me to eat what you make.

THE ANALOGY
There is a long list of activities associated with strategic planning, like coming up with Visions or Mission statements, analyzing the environment, formulating a budget, creating a position, designing KPIs, assigning implementation tasks, and so on. To get it all done in a timely fashion, there is the temptation to treat it all like a To-Do list. Just get every activity assigned to somebody and let them work at—all at the same time.

That may sound efficient at first. But strategic planning is more like a recipe than a To-Do list. Connections and dependencies exist between the tasks. There tends to be a need to do things in a general order. Otherwise, you end up with a mess.

Unfortunately, I see companies skipping steps or doing them in the wrong order. That’s like mixing before measuring and skipping the baking. I wouldn’t accept that in the kitchen, and I won’t accept it in the world of planning.

THE PRINCIPLE

The principle here is that before embarking on strategic planning, get a good recipe and do the tasks in the proper order. In this blog, I will offer such a recipe. Since most recipe books come with pictures of the recipe, I have one, too—as you can see in Figure 1. Click on it to see a larger version.

Learning

I have summarized everything into three major tasks—learning, deciding and doing. These are the planning equivalents of measuring, mixing and baking. The first task is learning—getting smart about understanding the current state and expected future state. This applies to the state of your internal company/brand and the state of the external marketplace where you will compete.

To learn about the external environment, you need to study the consumers, the competition, regulations and other external factors which can impact your success. To learn about your internal environment, you need to look at your strengths and weaknesses and how you get things done.

This learning is a lot like the measuring in a recipe. You are measuring four things—current state, direction, magnitude and speed. This applies to measuring customer segments, competitive positions, technological advancements and internal issues. The four measurements work like this:

1. Current State: What do things look like today (market share, number of people, size of industry, attitudes, threat of Porter’s Five Forces, internal competitive advantages, etc.)? This is a sort of good or bad measurement.
2. Direction: In the future, how will the current state measurement change in size? Will it go up or down?
3. Magnitude: In the future, how massive will those changes in direction be? Will the changes (up or down) be huge or small?
4. Speed: How fast will the future changes occur? Will it happen almost immediately or will it take some time (fast or slow)?

This is not about making precise measurements. Measuring the future is not that easy and precision takes too long (you have to wait until the future gets here before you can precisely measure it and then it is too late to be useful in planning). For planning purposes, it is usually enough to know good or bad, up or down, huge or small, and fast or slow. I talk about this in more detail here.

Deciding

Once you become smart via learning, you are ready for step two in the recipe—to make some key decisions about how you want to play the strategic game. This is where you put together your unique mix of attributes and processes that you will stand for and win with.

Without gathering the knowledge first, your decisions for this mix will be little more than guesses, hopes, or wishes. Yet, I often see organizations start with some decision activities as their first act. They want to dive in and create visions and missions from the start. They want to decisions about what they want to be begin the planning process. It’s like mixing before measuring.

The problem is that is somewhat irrelevant what we initially want our mix to be. That’s because we do not operate in a vacuum. We operate in the context of the environment and time. The idea is not to pick a place that is pretty and desirable. The idea is to pick a place where we can succeed. And the best place to succeed depends on everything else going on in the marketplace relative to our strengths. And we won’t know that unless we do the learning first.

I remember going to a franchising seminar and hearing a lecture from a successful franchisee. He said that some of the most successful franchisees ignore the glamorous businesses and enter businesses which are dirty, ugly and risky. Why? Big corporations tend to avoid the dirty, ugly and risky. This makes them more profitable for the little franchisee. The idea here is that analysis and learning may point you to away from your first choice (the glamorous option) and put you somewhere else which will make you far more successful. Remember, nearly everyone in the smartphone business is losing money. It may be glamorous, but not a place where everyone can succeed.

In making decisions for your strategy, keep in mind the context of yourself within the environment. Make sure the position you choose is seen by the marketplace as desirable, sizable, ownable, preferable, achievable, believable, understandable, and profitable. I talk more about these concepts here. And then, once you have made your choice about what you want to be, translate it into an external message (position statement) and an internal business model (how I must operate to make the position a deliverable reality).

Doing

The third step is doing—the hard work of making your decisions come to life. This is where you “bake” the strategy. This, by necessity, has to come last. Until you make your decisions, how will you know which actions are the right ones to take? Until you know your way to win, you cannot know which are the winnable actions for your business. 

For example, Aldi and Whole Foods are both grocery retailers. Yet they have decided on radically different positions. Aldi aims for the lowest possible price while Whole Foods aims at health, nutrition, and natural/organic. The right actions for success at Aldi are almost the opposite of the right actions for Whole Foods, and vice versa.

It’s not that some actions are always good and others are always bad. Good and bad is determined by the position. A good action for Aldi can be bad for Whole Foods, and vice versa. So how do you know what the right actions are prior to deciding the position?

Yet, I often see businesses rushing to do the actions first. They claim there is no time to learn (or the future is unlearnable) and that consumers make all the decisions. Therefore all we can do is act quickly and learn from our mistakes. I don’t think it’s quite that simple. I don’t want to stick random ingredients in the oven and then taste them afterwards to learn if it is good. Random actions are not as efficient as making the right action tradeoffs based on a chosen position.

The “doing” actions you choose to prioritize need to address both internal and external challenges. Externally, one needs to convince the customers and the supply chain that you own our position and that it is in their best interests to prefer us. Internally, we need to be sure we have a model capable of delivering the position.

Cycles

Those who want the “doing” to come first aren’t entirely wrong. There are some things which are best

learned via doing and experimenting. But that doesn’t mean that you skip the traditional learning and deciding steps. It means you use the “doing” actions of your current planning cycle to begin the learning of the next cycle.

You can see this in Figure 2. Planning is a continuous series of cycles. Just as you don’t just eat once and quit eating ever again, you don’t just plan once and quit. The planning process never really stops. When you get to the end of one cycle, you use what you learned to influence the next cycle.

SUMMARY
Strategic planning is more like a recipe than a To-Do list. Good planning tends to do things in a particular order, without skipping steps. First you learn by measuring what’s going on (and expected to happen) in the internal and external environments. Then you decide how you want to mix together attributes and processes in order to create a position and business model which optimizes your chances for success in that environment. Third, you “bake” your strategy by doing the implementation actions which make your mix decisions a reality. Finally, you use what you learn from those three steps to do an even better job in your next planning cycle.

FINAL THOUGHTS
This recipe for planning isn’t 100% etched in stone. There is room to experiment with this recipe. But don’t throw it away.

Strategic Planning Analogy #505: Secrecy is Silly

THE STORY

One time I was doing some work for a client which I found very frustrating. I kept trying to give them the insight I thought they needed for their decision, but it seemed like my efforts were always a little bit off from what they were looking for.

It wasn’t until much later (after the project was over) that I found out what the problem was. My client had deceived me about what their true intentions were. They wanted to keep their true intent a secret, so they gave me instructions under false pretenses.

No wonder my insights were a bit off the mark. They were designed to meet the false pretense rather than the real objective.

THE ANALOGY

My client was not the only one who likes to keep secrets. Secrets can be found all over the business world. This secretive approach often finds its way into the world of strategy.

There seems to be this idea out there that if a strategy “gets out” and is made public, it ceases to be an effective strategy. Somehow, mere knowledge of the strategy takes away its competitive advantage.

The problem is that the true value of a strategy is in its execution. And if those executing the strategy are kept in the dark, they cannot execute it well. As we saw in the story, I could not effectively do my job when I was kept in the dark.

THE PRINCIPLE

The principle here is that strategies are most effective when they are well communicated, both inside and outside the organization. A secretive approach to strategy diminishes its effectiveness.

The Problems With Secrecy

There are quite a few reasons why keeping a strategy a secret is detrimental to its effectiveness.

1. If your employees do not fully comprehend the strategy, they will not be able to fully execute the strategy. Thousands of decisions are made all over the organization every day. Depending on how those decisions are made, they can move a company either closer to or further away from your desired strategic direction. If the strategic direction is not known all the way down the organization, it will only be random luck if their decisions move the company in the right direction. Remember that your REAL strategy is not what you put on a piece of paper, but what you actually do. So to get what you do to match what you put on the paper, you’d better make sure the doers know what is on that piece of paper.
2. When your employees know what the strategy is, then they can use their insights and initiatives to make the execution even better. By contrast, if just the top executives know the strategy, then the only way to get the strategy executed is by having the top executives order people to do specific actions designed to support the strategy while keeping the strategy behind the actions a secret. This only makes sense if you believe that:

1. All the great ideas are found only at the top of an organization; and
2. A top-down only control of the business like the old communist economies is the best way to go.

The bankruptcy of the old communist system should be proof enough that a top-down only secretive approach has many flaws. The alternative is to let the people at the bottom in on the secret and allow them to make contributions to the effort. Strategies are made much stronger when input comes from the collective intelligence of the entire organization working on a common known goal.

3. Strategies usually include a reason why certain consumers should prefer patronizing your brand over the alternatives. Why should these consumers flock to your brand if you keep your reason for preference a secret? You should be shouting your strategic benefit from the rooftops, so that there is no mistake as to why you should be preferred. And to make the claim believable, it helps to show why your strategic approach makes the claim a true differential advantage.

Take the insurance business, for example. If your strategy is based on low price and you get there by going direct and eliminating the independent insurance agent to save money, let the customer know. Conversely, if your strategy is based on best service, play up your strategic approach of having the best local independents working for you (something the price-oriented insurers eliminated).

Positioning is about owning a spot in the mind of the customer. You won’t own that position if you keep it a secret.

4. The stronger you cement your position and strategy with your customers and your employees, the harder it will be for the competition to take it away from you. In fact, if you make it clear to your competition what your strategy is and how strongly you will defend it, you can cause your competition to no longer want to fight in that space and instead take a differentiating strategy. For example, Walmart has made it clear they will fight to the death to defend their low price position, so most competitors stop trying to win price wars against Walmart and instead go a different route, which strengthens Walmart as the everyday low price leader.

The Faulty Logic Behind Secrecy

Some believe that if you let the competition know what your strategy is, then they can quickly copy it and take it away. That is why they want to keep it a secret. But this thinking is flawed, because there is a big difference between knowing what a strategy is and knowing how to best deliver it.

Great strategies are built upon great business models. And great business models are often very complex and very difficult to imitate.

For example, Southwest Airlines has done very well with its low price strategy. But if a competing airline merely copied Southwest Airline’s low prices, they would not be as successful as Southwest. Southwest’s strategy works because they have a unique and complex approach to their business model, including choice of airplanes, choice of airports, point-to-point routes, corporate culture, and so on. You need the full business model to make the strategy work. This is nearly impossible for an established competitor to convert to.

In another example, Wells Fargo has created success with a superbly executed plan to win via cross-selling.  Now it’s one thing to say “we will win via cross-selling.”  It’s another thing to have a sophisticated business plan designed specifically to optimize cross-selling.  As Wells Fargo CEO John Stumpf put it recently, “We could leave our strategic plan on an airplane and it wouldn’t matter.  It’s all about execution.” In other words, there is no reason to hide the “what” of Wells Fargo’s strategy from competition, because it would take them years and years to figure out the “how” behind the strategy, and by then you’d have made even further advances, so they never could catch up.

Here’s a little secret for you. If a competitor can immediately copy your strategy upon hearing it, then you really don’t have much of a strategy. A good strategy is based upon making a number of deliberate choices about how you operate. Trade-offs are made in certain areas so that you can better excel in other areas. These choices and trade-offs attempt to optimize against your unique strengths and weaknesses. The net result is a complex business model which is not easily copied due to its complexity and its unique suitability to your own situation.

We live in an era of transparency and openness. If secrecy is your only defense, then you are in trouble.

Remember, great strategies try to find a place where YOU can win, not where anyone can win. If anyone can supposedly win there, then nobody will win there, because nobody will have an advantage.

SUMMARY

When it comes to strategy, secrecy is a disadvantage. Strategic secrecy keeps your employees from doing their best, it hurts your ability to own your position with the consumer, and it weakens your ability to scare off a competitor from going head-to-head against you. Great strategies are built upon great business models, which are extremely difficult to imitate. As a result, even if competition knows your strategy, it doesn’t mean they know how to take it away from you. So don’t keep your strategy a secret.

FINAL THOUGHTS

If your strategy is nothing more than a hollow platitude, like “We will be the Best” or “We will be the Most Profitable” then I might consider keeping it a secret, because I would be too embarrassed to let others know how silly my so-called strategy is.

Strategic Planning Analogy #464: The Blue Screen of Death

THE STORY
This past week has been very frustrating for me.  My computer was getting slower and slower.  Eventually, it kept coming to a complete stop.  The screen would go completely blank (the blue screen of death) and the disk drive wouldn’t stop whirring away. 

I had to keep manually stopping the operation without going through a normal shutdown (Windows doesn’t like that).

Usually, I could get a fair amount of work done in the first hour after re-booting, so I used that time to go online to find out how to fix the problem.  What I learned was that my computer was filled with thousands upon thousands of little glitches which had developed over time.  It was nothing major; just so many little problems that the computer wouldn’t work anymore.

So I downloaded a program to clean up the bulk of the mess.  Then I slowly fixed all the remaining errors one by one.  Now my computer works fine again.

THE ANALOGY
A similar type of frustration can occur in strategic planning.  You may have a great strategic vision and a great plan to bring it to life.  However, once the plan is put into motion, it seems like nothing is happening.  Although it may have appeared like progress was being made at the start, that progress slows down over time.  Everything related to implementation slows until it seems like all progress has stopped.  You have the strategic equivalent of the blue screen of death—a strategy which no longer functions.

Many articles have been written about strategic implementation (including many of my own blogs).  Most of these articles deal with major issues, such as:

a) Resistance to change;

b) Dealing with those who try to sabotage the strategy because it hurts their power base;

c) Political struggles.

These are major roadblocks by people proactively resisting the strategy.  This is important stuff.  But it may not be the most important roadblock.

As we saw with my computer, the slowdown was not caused by a few major attempts by others to proactively destroy my machine.   No, it was thousands of little glitches which innocently crept in while I was doing millions of little tasks which had no malicious intent. 

In the same way, most strategic initiatives grind to a halt not because of a major malicious act, but because thousands of little barriers creep in while thousands of employees just try to innocently do their jobs.  No one barrier is enough to halt the strategy, but the accumulation of thousands of these acts eventually clogs the system and prevents implementation.

Think of it like this.  I could destroy my computer by attacking it with a hammer.  I could also destroy my computer by innocently eating cookies while I worked.  Only a few cookie crumbs would innocently fall into the keyboard from each cookie eaten.  However, after eating thousands of cookies, there could be so many crumbs in the keyboard that it no longer works. 

 
This latter problem is common in strategy.  While we are working to prevent someone from taking a hammer to the strategy, we fail to see all the little crumbs building up.  Right under our noses, the factors causing the strategy to fail are building up.  And although this attack is more innocent, the result is still the same.

 

THE PRINCIPLE
The principle here is that strategic implementation does not need malicious resistance to slow it down.  It just needs to allow tiny barriers to accumulate.  Therefore, have a plan to prevent this accumulation.

If you want to keep a computer running smoothly, two actions are recommended.  First, install a program that tries to block errors from getting into your system.  Second, check and clean up your system on a regular basis, before the errors get to the point where they seriously impact performance. 

Let’s see how to apply this to strategy implementation.

1) Identifying How The Errors Creep In

Two types of errors can creep into a company to prevent implementation.  I call them the errors of dilution and thickening.

Dilution occurs when the strong imperatives of strategy are weakened by compromise.  It comes about like this: Winning strategies typically emphasize owning a position of leadership in a particular area.  It is the place where your business can claim to be the best.  This could be one of a number of things, like best price, highest quality, most service, most authentic, most prestigious, most entertaining, best tasting, and so on.  It is this point of superiority which provides your reason for existing—your path to winning.

To attain and retain that point of superiority requires a diligent focus on improving that point of superiority.  Trade-offs must be made to reduce effort in other areas in order to put required resources in the desired area.

Unfortunately, in the small everyday decisions of business, these trade-offs can sometimes be ignored.  Small decisions may be made which move the company away from this focus.  It may be a decision to vary slightly from the focus to pocket a small amount of business near-term, to meet this month’s quota, or the desire to broaden one’s appeal a little bit.  These look like small compromises—just small, temporary departures from the long-term focus to perhaps make a small immediate gain.  But do enough of these small compromises and you end up with one big departure from the desired path.

The result is that these compromises dilute one’s effectiveness at the desired point of superiority.  You become less superior where you need to be most superior.  You confuse the customer as to what you stand for.  Or those actions may actually destroy your position.  Toyota’s point of superiority had been reliability, but it got diluted by a series of actions to broaden the range, increase geographic distribution and lower costs.   The accumulation of these acts severely hurt Toyota’s reliability image in 2011.   Like with my computer, this accumulation of dilution slowed things down for Toyota.  They needed to stop and “re-boot” their strategy.

Besides dilution, one can slow down the strategy through thickening.  This is the process of adding so much additional activity to the agenda that the strategy part of the agenda loses emphasis and priority.  It’s one thing for a company to focus on three major goals.  It is quite another to simultaneously focus on 35 major goals. 

Once everything becomes important, then effectively nothing becomes important.  There is no priority to the strategic path.  A little effort in 35 different directions means no great effort in any direction.  No single extra task breaks down the process, but over time the accumulation will.  Pouring in all these extra tasks is like pouring molasses into the river.  After awhile, so much molasses will be in the river that it doesn’t flow any more (it’s gotten too thick).  Progress stops...like my computer.

2) Having a Plan to Clean Out the Errors

So how do we clean out the errors of dilution (through compromise) and thickening (through added tasks)?

Dilution needs to be attacked two ways.  First, strategic implications need to be brought down from the ivory towers to where everyday decisions are made.  Before making every, and I mean every decision all over the company, first ask yourself which answer moves you closer to your point of superiority.  Realize that every decision can compromise your position and make sure you understand the ramifications of such a compromise on your ability to hold your position of strength.  This needs to become a natural activity done all the time, modeled by top management.

Second, one needs to constantly monitor where one stands with the customer regarding their point of superiority.  Is the perception increasing or decreasing.  If the position is decreasing, then one needs to quickly root out the diluting activities and eliminate them.  

Regarding thickening, one needs to constantly monitor the size of the list of priorities and the number of tasks expected.  Keep the list small.  The idea should be something like for each new priority added, an old one needs to be eliminated.  If you have a lot of things you want to do, do them sequentially rather than simultaneously.  In other words, after priorities are accomplished, take them off the list and replace them with new ones. 

And finally, step back every once in awhile to reassess how many errors have crept into your system.  Just as the experts tell you to run a clean-up program on your computer once a week or once a month, companies should do a formalized clean-up effort on a regular basis—perhaps twice a year.  This is a formalized time to look for ways to cut out excess tasks and diluting compromise practices.

SUMMARY
Strategic efforts often fail not from large malicious acts, but from an accumulation of small innocent acts that eventually slow down progress to a halt.  These acts tend to slow down progress by either diluting one’s focus (through compromise) or overburdening you with too many other tasks competing for your attention (called thickening).  To stop this from happening, one needs to put in place programs to attack dilution and thickening on a continual basis, like how an antivirus program works on a computer.  Then one needs to periodically focus on cleaning up any dilution or thickening which crept in anyway (like running a computer clean-up program).

FINAL THOUGHTS
Remember, it’s easier to fix all these problems when the threat is still low.  If you wait too long, you end up like I was with my computer—a machine that crashed all the time and could do nothing.

Strategic Planning Analogy #422: Hatching Chickens

THE STORY
Back when I was a child, the family living next-door hatched chickens in their garage. They had a number of incubators full of eggs. As long as the incubators were kept at the proper temperature, those eggs would hatch. Then the neighbor’s garage was full of cute yellow baby chicks.

Eventually, those chicks would be gone, and they’d have a bunch of new eggs to hatch. I never asked what happened to all those baby chicks…or asked why someone living in an inner ring suburb of Detroit was hatching eggs in their garage…or why they also had a machine to make ceramics in their garage. I guess as a young boy, you just thought it was cool to see a bunch of baby chicks get born and didn’t think about the rest.

THE ANALOGY
Chickens are not the only things which are hatched. Companies try to get strategies hatched which will grow the firm. But just as all eggs do not lead to hatching chickens, not all strategies result in growing a firm. Instead, some just die in the shell.

To reduce the risk of failure, my neighbor put the eggs in an incubator. The incubator had a temperature level which was tightly controlled. There was a thermometer in each one, so that one could make sure the temperature was ideal for hatching eggs. At the right temperature, hatching was more likely to occur.

The same is true for strategies. Strategic success has a lot to do with the characteristics of the company where the strategy lies. If the environment is wrong, then the strategic idea will die (just like those eggs if held at the wrong temperature).

THE PRINCIPLE
The principle here is that even great strategic ideas will die if they are placed in the wrong environment. Therefore, having great ideas is not enough. One also needs to manage environment, so that the ideas have a chance for survival.

1) Don’t Try to Hatch a Strategy Which Requires a Distinctively Different Environment
For example, one time I worked with a company and came up with what I thought was an excellent strategic idea. It leveraged a lot of the company’s core competencies in a way which could reinvent an entire industry, creating huge growth opportunities. Unfortunately, I could never get the idea to hatch within this company, no matter how hard I tried.

The problem was that the corporate culture at this company was centered on helping people have more fun. This new strategy had nothing to do with “fun.” It was more focused on alleviating pain. This incompatibility with the prevailing culture doomed the strategy. It didn’t have a chance of hatching. The corporate temperature was wrong.

As in this case, the temperature was wrong because the energy of the company was focused in a different direction. However, sometimes there just isn’t any energy at all to support change. The incubator is turned off and it is too cold to grow anything.

These are the companies who resist any kind of change. New ideas are shot down quickly. Energy is spent on protecting the power bases of the status quo rather than moving the company forward. Anything out of the ordinary gets vetoed.

We talked about the need for getting power behind a strategy in the prior blog. But if there is no power to harness, then you have what I referred to in an earlier blog as “hard clay.” Once clay has been baked hard in a kiln, you can no longer reform the clay into something new. The hardened shape stays forever. Just as you cannot remold the hard clay into a new form, you cannot remold a cold company into a new strategic reality. The efforts are a waste of time.

If you find yourself in a cold environment with hard clay, don’t waste your efforts on radical strategic change. You won’t get anywhere. Your strategic options are more limited to things like:

a) Milking the old strategy as well as one can on its way down (a harvest strategy); or
b) Divesting the operation (all or in part) (a liquidation strategy).

Although these may not be the most dynamic options, at least they are compatible with the temperature of the company, so that they have a chance of succeeding. I’d rather have a successful harvest strategy than a failed repositioning strategy—no matter how appealing the repositioning at first appeared.

2) Build Strategic Incubators
Sometimes, if the core business is not the right temperature, you can still have success if the company allows you to build separate incubators. For example, when IBM was trying to invent the PC, it was soon apparent that the core business environment at IBM was the wrong place to hatch such a strategy. The structure, the bureaucracy, the culture…they were not designed for such a radical start-up. The PC would have died before hatching. Wrong temperature.

IBM was clever enough to realize this, so they moved the PC development off-site. It was freed from the old corporate structure and allowed to incubate on its own—far away from headquarters in an environment ideally suited for such a start-up. As a result of the isolation, the diversification into PCs was a success. It hatched well because it was allowed to be put in the right kind of incubator—even if it required being separated and held at a different temperature than the core business.

Incubators work on eggs because they properly control the entire environment around the egg. They protect the egg from the wrong environment. The same is true with strategies. If you separate them from the pressures of the core business and nurture them in the right culture, they can hatch into a successful business. Therefore, pre-plan the incubator needs when proposing a strategic move which would die if started within the core. Include the incubator as part of the proposal.

Beyond that, the trick here is how one handles the strategy once it is successfully hatched in the incubator. Eventually, the project needs to leave the incubator and get reunited with the core. Otherwise, the core will never benefit from the strategy. However, the newly hatched business is still young and weak. It can still get stomped on and killed by the core if one is not careful.

Therefore, your great idea may not only need an incubator strategy, but also a post-incubator strategy.

3) Sometimes You Need to Change the Core Culture
If keeping a culture which has either gone cold or is no longer suitable to the future is not acceptable, or if incubation of a small offshoot is not enough, then one is left to change the core culture. This is extremely difficult and highly risky. The likelihood of success is low.

If this is your choice, understand the risks and enter the project well prepared. Start early and expect a long battle. Anticipate resistance and head it off early.

One of the biggest errors I have seen is leaders trying to push a new strategic agenda and think that all they are doing is pushing a strategic agenda. If the agenda is radical, one is not only pushing a new strategic agenda, but one is also pushing through a new culture, a new bureaucracy, a new corporate climate. If all your forces are lined up to push the strategic agenda, then the forces of the status quo culture will resist your effort at the cultural level.

This is a two-front war—a war of strategy and a war of culture. You have to win at both to win at all. That is why trying to change the whole corporation is so difficult and risky.

SUMMARY
Even great strategic ideas will fail if launched in the wrong environment. To prevent this failure, one must either:

a) Limit one’s strategic options to only those options compatible with the current corporate environment;
b) Launch the new ventures in a separate incubator, protected from the core and run with a more appropriate culture; or
c) Launch a risky two-front war to change both the strategy and the culture of the core business at the same time.

FINAL THOUGHTS
When someone outlines a strategy to me and asks me if I think it is a good one, my first response is to ask them who the strategy is for. After all, strategic success depends not only on the idea, but on who is going to implement it. A strategy which is great for one company could doom another, depending on the situation and the culture. Therefore, don’t just try to seek a “good strategy.” Instead, seek out the “strategy most appropriate for me (and my culture).” Find the strategy which will hatch in your incubator.

Strategic Planning Analogy #411: Strategic Pep Rallies

THE STORY
Back when I was in high school, we used to hold a big pep rally for our football team. All of the students would leave their classes to go to the gymnasium and sit on the bleachers. The band would play peppy music.

There would be speeches about how wonderful the football team was. The team would come out on the gymnasium floor. The students would scream with excitement. It was a fun time of camaraderie filled with inspiring speeches and things designed to boost everyone’s emotions regarding the coming football season.

These pep rallies were done because it was felt that it built up fan support and made the team feel more confident about winning. All of this was to help increase the success of the football season.

THE ANALOGY
High School football teams are not the only ones looking for success. Businesses want their strategies to succeed as well. So maybe companies should also hold pep rallies.

In a way, many companies do. Think about those annual strategy retreats. They’re a lot like pep rallies. People leave their offices to congregate together. There is lots of camaraderie and lots of inspiring speeches. People get more emotionally tied to the strategy. Enthusiasm to win is increased.

A lot of people complain about these types of strategy retreats. They think they are a waste of time because not a lot of serious strategic activity takes place. But consider this…you don’t see the football coaches doing serious planning activities at pep rallies. They aren’t sitting there at the pep rally developing their playbook. They are not designing their plan of attack against the next opponent.

I’m not even sure that such activities could even be possible with the band playing loudly and the students screaming in the background. Yet schools continue to hold pep rallies because they see value in the activity.

So maybe there is even value in a strategy retreat when strategy is not created at the event.

THE PRINCIPLE
The principle here is that strategic success requires more than just a well thought out mission and viable plan of attack. At the end of the day, strategies have to be properly implemented by people in order to succeed. Ignore the people element, and even well thought out plans are usually doomed.

People are both rational and emotional beings. And for most of them, strategy work is layered on top of a full burden of day-to-day activities (with lots of pressure to get them accomplished). If you do not break through the clutter of the day-to-day and create enthusiasm for the plan at both a rational and emotional level, the strategy will lose the battle for attention against the day-to-day. Implementation will suffer.

Studies show that strategies typically fail due to weak implementation. Strategy retreats can help “rally the troops” around the strategy in a manner which increases the enthusiasm for the plan. This improves the level of commitment in the people and increases the likelihood of successful implementation.

Here are some suggestions about how to make the best use of a strategic retreat.

1) Don’t Try to Use Strategy Retreats to Create Strategy
As it turns out, strategy creation is a complex, time consuming process. Great strategies cannot be created over a weekend once a year. Besides, not everyone is great at strategy creation. It takes a different kind of thinking to be great at strategy creation. Therefore, trying to create strategy at a strategic retreat is a waste of time. Don’t even try.

Instead of trying to get people to “create” strategy, try to get them to “react” to strategy. As I’ve mentioned in a prior blog, most people are better at reacting to ideas than creating them. Therefore, use the retreat to deal with reactions. Find out:

a) Where the rational and emotional resistance lies among those required to implement it.
b) How the strategy can be improved.

By incorporating this feedback into the plan, you give the people a sense of having participated in creating the plan without actually having a creation session. This minimizes implementation resistance and increases emotional commitment in a very efficient manner. And efficiency is important if all you have is a weekend at your disposal.

Pep rallies don’t create strategies. Follow their lead.

2) Use Strategy Retreats to Break Through the Daily Clutter
It is difficult to get enthusiastic implementation from people who do not fully understand or comprehend what it is they are being asked to implement. Lack of comprehension can be one of the biggest enemies of implementation. Therefore, use the retreat to maximize comprehension and understanding of the strategy.

It often takes time for all the rationale and all of the nuances of a strategy to sink in. It cannot be done in little “sound bites.” Back at the office, where all the daily pressures take place (the “tyranny of the immediate”), about all the time the strategy can get is little sound bites—spoken when the audience is only half-listening. The real benefit of the retreat is that it pushes away the tyranny of the immediate, so that the ears have the time and the attention levels necessary to fully comprehend and embrace the strategy.

Use that time to fully explain why the strategy is so critical to future viability and success. Explain how the environment is forcing a need to change and why this is the best change to take. Explain the dire consequences of the status quo. Show how its importance truly eclipses the day to day. Show why this strategy is worth becoming a priority in their life. Make them BELIEVE in the rightness of the strategy, both rationally and emotionally.

This is more than just lecturing. Make it come alive through demonstrations and role playing. If you let them play the part of the competition who seeks to destroy the company, they will quickly see the vulnerability of not embracing the right strategy. Show them interviews with disgruntled customers. Let them experience the competitor’s products first-hand. Appeal to all the senses—seeing, hearing, touching, experiencing.

Keep the daily pressures as far away as possible. Ban electronic devices. Prevent digressions into daily problems. Don’t let them communicate with the office. That way you have the full attention of all the senses. Then you can make the strategy truly come alive and become something more than just a clever slogan. It is then something real which can be understood, believed and embraced.

3) Use Strategy Retreats to Break Down Silos
Not only does strategy implementation require people, it requires people to cooperate. Cooperation relies on three elements:

a) A willingness for people to set aside personal agendas for the greater good.
b) A willingness to trust others and work together.
c) An understanding of how your role fits within the larger picture—what you are responsible for and how that interacts with what others are responsible for.

Strategy is not a “corporate” thing. It is an “everybody” thing. If people don’t understand how they fit into the implementation plan (and make it a priority), they cannot fulfill their part of making the implementation a success. It has to get very personal at all levels.

Strategic retreats are a good time to break down those individual silos and improve cross-departmental cooperation. After all, this may be one of the rare times when these executives get to interact with each other in a neutral environment where daily pressures don’t get in the way. It is a time to build bonds of trust.

It is a time to show how all the pieces fit together…a time to for people to see how they fit into the plan and what they need to do. Never let a strategy retreat end without people seeing how their role fits into the strategy implementation. You may never get a better opportunity.

Pep rallies break down own individual concerns and get us thinking about the entire school and the entire football team. It makes us want to do whatever we can to help the TEAM win. That sounds pretty good for businesses, too.

SUMMARY
Although strategy retreats are not great places for strategy development, that doesn’t mean they are a waste of time. Strategy retreats are a great place for improving the rational and emotional commitment of people to the strategy. And that goes a long way towards improving strategy implementation. Use them to increase understanding, get feedback and increase cooperation.

FINAL THOUGHTS
Pep rallies are not the only time students think about football. They also go to where the games are played each week. The support follows where the action goes.

The same principle should apply to businesses. The strategy cannot be isolated to a remote location once a year. It needs to come along to where the game is being played every week. Regular interaction is needed so that people are reminded of the strategic implications of their daily decisions. I think that strategists should have an audience with senior management at least once a month in order to keep the commitment to strategic implementation strong all year long.

The retreat should just be one small piece in the larger context of influence.

Strategic Planning Analogy #379: Strategy Leash

THE STORY
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 ANALOGY
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
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.

SUMMARY
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.

FINAL THOUGHTS
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.

Strategic Planning Analogy #356: Followership

THE STORY
Imagine, if you will, a marketer explaining her new marketing plan. This is what she says:

“I have 100 consumers for my product, but I am going to spend my entire marketing budget on reaching only one of them. I will ignore the other 99.”

You might want to ask her, “Does this one customer spend a lot more than the other 99?”

Her answer, “No, that one customer is slightly below average in spending.”

Then you might ask, “Are the other 99 so loyal that they do not need to be marketed to?”

Her answer, “No, they defect to the competition all the time.”

At this point, you might conclude that this woman is in the wrong profession and should give up a career in marketing.

THE ANALOGY
It seems silly for a marketer to focus all their effort on one person and ignore everyone else. How can you expect consumers to patronize you if you ignore them?

Yet businesses do something equally silly. It seems that all the business books and consultants are focused on “Leadership”. For example, there are tons of books out there on how to become a great CEO, but try to find a book on how to become a great low level employee. They don’t exist. Last time I checked, there are a lot more followers in a business than there are leaders. Why don’t we spend more attention on followership?

Although strategies may be created by leaders back at the corporate offices, strategies are implemented primarily in places far away from the corporate offices by the hundreds and thousands of rank and file employees. A well crafted strategy at headquarters can be utterly destroyed by a front level employee who mis-handles a contact with a customer. How can you expect employees to properly implement the strategy if you ignore them?

Focusing only on leadership is like a marketer who focuses only on one consumer. It misses all the potential from everyone else. I understand why the authors and consultants focus on leadership…that is where their money is made. However, your money is made primarily by the labors of the followers. A strategy which ignores the followers will most likely fail.

THE PRINCIPLE
The principle here is that strategic success should not be determined by the cleverness of the plan, but by the effectiveness of the implementation. Therefore, careful consideration should be given to how the plan impacts the implementers.

For example, many strategic plans try to implement change. Although that change may be good and desirable, change is typically resisted by the rank and file employees. If your strategy does not include specific attention to overcoming that resistance, then it will fail to be properly executed by those who resist it. Hence, the plan becomes worthless…all because of ignoring the implementers.

Although this principle has always been important, recent trends are making it even more important.

1. De-layering and Empowerment
There has been a trend in business to eliminate many layers of leaders and give more decision power to front-line employees. This can be a very good thing. It improves flexibility and the ability to react quickly. However, it also increases the risk that a strategy is implemented improperly. If those front-line employees are (a) unaware of the plan or (b) do not buy into the plan or (c) do not see the connection between what they do and the plan, then that extra empowerment they have will empower them to ignore the plan.

2. The Nature of Knowledge Work
Back in the days when most labor was assembly line factory work, the typical difference between the most productive and least productive employee in terms of output was about 20%. That was because the assembly line itself served to help people conform to the norms of efficiency. If you deviated much from the norm, you upset the entire assembly line. This was highly noticeable and the inefficient would soon be eliminated.

However, in knowledge-based work, it is a lot harder to detect and control output. In knowledge-based work, it is not uncommon for the best employee to accomplish more in a couple of hours than what the worst employee does in an entire week. In knowledge-based work, there can be a lot of people like Wally in the Dilbert cartoons, who can go for months without doing any real output and go undetected.

Without the assembly line to help enforce conformity, it takes extra effort to get employees committed to executing in conformance with the plan. If you do not pay special attention to this issue in your planning, these knowledge-based workers may end up doing nothing to advance the plan, or worse yet, apply their knowledge in a way that acts counter to the plan.

3. Social Networking
In the world of social networking there are no secrets. If a front-line employee screws up in the interaction with customers, it will soon be broadcast to the world via emails, blogs, Facebook, Twitter and other such media. Rather than accept your strategic claims at face value, customers go to social networking sites to hear other voices speak about your company.

In the world of social networking, headquarters has less control over its image than ever before. Successfully getting consumers embrace your strategic position and trust you with their patronage is harder than ever. Therefore, it is more critical than ever to implement the strategy well—even at the smallest levels. This requires more diligence in working with your implementers on execution.

4. Lower Employee Loyalty
The loyalty contract between employer and employee is not what it used to be. In general, newer, younger employees are not as blindly committed to their employers. They are more likely to quit if things do not go their way. They are not accustomed to blindly following orders. They ask a lot more questions.

As a result, loyalty can no longer be accepted as a given. If you want loyal employees, you have to earn it by “going the extra mile.” Good strategic plan implementation works best when implemented by loyal employees, particularly if the plan involves a lot of change. Therefore, an investment in building more loyalty throughout the organization can be very important to strategic success.

So What Does This Mean?
Keeping this in mind, strategic planning can improve its success in implementation by doing the following:

a) Consider how the strategic plan impacts your expectations of how employees should act (what they should be working on and how they should interact with others).

b) Consider what barriers may exist to cause employees to resist acting in this manner.

c) Develop tactics to remove those barriers.

d) Incorporate into the plan a means to communicate the essence of the plan to all workers (on a regular basis) so that they understand it, buy into it, see its relevancy to what they do on a daily basis, and want to work to make it a reality.

e) Link rewards and compensation to strategy implementation.

f) Whenever key decisions are being made in the organization, make sure its strategic implications are a part of the discussion. Institutionalize it into your decision-making process.

g) Get strategic issues into the daily conversation at the lowest levels of the organization, so that it is not forgotten.

h) Proactively work to improve employee loyalty.

SUMMARY
Clever plans can be fun to develop, but true success depends on getting favorable results. Therefore, a large portion of one’s strategic effort should be focused on barriers to implementation. Since implementation depends on the implementers, significant attention needs to be given to the lower level employees who do that work. They will only execute the plan well if they understand the plan, see its relevancy to their work, and are motivated to want to see the plan succeed. Getting this right can do more for your success than just being clever.

FINAL THOUGHTS
The definition of a leader is someone who has followers. If you only focus on creating a great leader, you may not get great followers (and have failed in your task). However, if you focus on creating great followers, you will have (by definition) a great leader.

Strategic Planning Analogy #315: Magnetic Pull

THE STORY
Electricity can be a powerful force. When I was a young Cub Scout, I did an experiment with wrapping a wire around the metal part of a screwdriver. The ends of the wire were then connected to a small battery. The result? A powerful electromagnet that could pull towards it any iron substance nearby.

Of course, I was told not to directly touch the wires but to hold onto the plastic handle of the screwdriver. Otherwise the power of the electricity would affect me as well.

I found that out the hard way. When I was in high school, I picked up an electrical item. I thought it had a protective cover on the bottom. It did not. There were exposed wires on the bottom with which my hand came into direct contact. The electrical current caused the muscles in my hand to contract around the device so that I could not release my grip. I could feel the sensation of electricity through my hand. I thought I was going to be electrocuted. The electricity certainly had 100% of my attention at that point.

Fortunately, I was able to grab the device with my free hand (in an area where there were no exposed wires) and yank it out of the grip of my other hand. Needless to say, it was a very shocking experience.

THE ANALOGY
I learned two things from these experiences. First, the closer something is to an electromagnet, the more it is influenced by it. If an iron piece was close to the electromagnet, it would jump up and attach itself to the screwdriver. If it was far away, there was no natural attraction.

Second, if you are directly on top of the electrical current, it will grab you in a way that makes it almost impossible to escape. All your energy is focused on coping with the situation at hand. It consumes you.

A business can be a lot like that electromagnet. The closer you get to the core of the business in the organization chart, the more you are naturally drawn in. Your time, your attention, and your enthusiasm become attracted to the business like iron to a magnet. It is powerful and exciting. Your identity and self worth are more closely tied to the business and you are naturally motivated to put in the extra effort to help the company excel.

For the CEO, it can be even more powerful—like putting your hand directly on the current. The powerful current of the business takes control of the muscles. It is nearly impossible for the CEO to let go. The CEO becomes a workaholic, who can never separate him/herself from thinking about or acting on behalf of the business. The attachment consumes them.

Of course, the opposite is also true. If you are at a distance from the core of the business, the pull is weaker. Entry-level workers out on the front lines are not as emotionally grabbed by the power of the business. To them, it is often just a job, nothing more. There is no natural pull.

One of the challenges of strategy is that successful implementation often relies on getting extra effort and close cooperation from all those folks distant from the core who are not naturally drawn in.

THE PRINCIPLE
The principle here has to do with proximity. The ones with close proximity to the top of the organizational pyramid are living in a different world than the employees who are at a distance. When you are near the top, there tends to be a natural force causing you to focus extraordinary time and effort for the good of the business. It all seems so natural and normal when you are within the magnetic power of the core.

Those distant from the core are not under that magnetic pull. Non-work aspects of their life have greater influence. Putting forth extraordinary time and effort for the good of the business does not seem natural and normal. Instead of being pulled in, there is resistance that must be overcome.

One problem I have seen over the years is that those inside the magnetic pull can often forget what it is like to live outside that pull. The pull becomes so natural to them that it is hard to imagine life without it. Therefore, these people on the inside of the pull start thinking everyone is being naturally pulled in. This leads to two strategic problems:

1. They overestimate the natural commitment of the troops to achieving the strategy.
2. They fail to create sufficient incentives into the strategy to overcome the lack of natural commitment (since they were not anticipating such a need).

As a result, strategic implementation fails to live up to expectation and the plan suffers.

I was reminded of this fact while watching episodes of Undercover Boss on TV. In this reality show, CEOs of large companies change their identities and pretend to be entry-level employees in their business. Although it is a different CEO from a different company each week, the story lines in each episode are very similar. The CEOs go out there expecting to learn a lot about their business on the front lines. Instead, they learn a lot about their people on the front lines.

These CEOs discover that the people on the front lines are struggling with a lot of issues that have little to do with the business. Because they do not earn a lot of money, it is harder for entry level employees to cope with all of these issues. This can act as a barrier to getting 100% commitment from them.

At the end of the TV show, the CEO reveals his identity and rewards some of the people he worked with on the front lines with recognition and financial support. The front line people are so tickled with being recognized that suddenly they are more committed to the company.

So what can we learn from this?

1. Don’t Assume that the Magnetic Pull is as Powerful out in the Field as it is at the Core.
Instead, assume that the motivation out in the field is less than what you see in your world. Assume more distractions from a strategic focus, either from life issues or the pressures of just getting the day-to-day work quotas accomplished in an 8 hour period.

2. Find Ways to Get Magnets out into the Field.
If you cannot get the front lines closer to the magnet at the core, build more magnets out in the field. This could include things like:

a. Greater Recognition of the Work of Individuals out in the Field.
b. Assistance with Coping with Life Issues (like having on-site daycare).
c. Linking Additional Pay/Rewards to the Additional Work Involved in New Strategic Initiatives (like Contests or Rewards for Meeting Milestones).
d. Showing a Better Long-Term Career Path to Entry Level Employees.
e. Enriching the Jobs.
f. Listening to the employees and Paying Attention to Their Suggestions.

Many of these things cost little to the company, but can have large rewards. When designing an implementation strategy, design magnets into the plan. Put aside money in the budget for this purpose.

SUMMARY
The people out in the field live in a different world than those close to the top. Therefore, do not expect them to have the same natural level of devotion to the company. If you want high levels of strategic execution out in the field, you may need to incorporate more incentives as a way to increase the devotion to the task.

FINAL THOUGHTS
As I’ve mentioned before, Henry Ford used to complain: “Why is it every time I ask for a pair of hands, they come with a brain attached?” Ford’s point was that when you hire people out on the front lines, you don’t just get robotic hands doing the task without question. Instead, you get the whole person, mind and all (whether you want it or not). If you don’t work on properly engaging the mind, you will not get all you desire out of the hands. Put some magnets out there to draw in the whole body.