Strategy aint all that easily implemented!
Over the past few years I have increasingly realized that strategy is not being implemented. I see it in the business world. I read about it in the academic world. I hear about it from managers and MBA students. The big question is: “WHY?”
It’s not as if there is a lack of information! Do yourself the favour and do a bit of research on Google. But only if you have a lot of time. The reason for this caveat is because there is so much written about strategy and strategy implementation, that it will take you a long time! There are hundreds of tools available to do strategy analysis – if not thousands!
If you want to know what’s cooking in the macro environment, you can use the PESTLE analysis. Then there is the Miles and Snow analysis, the SPACE Matrix, and many more. Other industry analysis tools could include SPACE, Anshoff’s matrix, Porter’s tools, analysing drivers of change and key success factors, analysing the competitors, using the GE grid, doing an industry value chain and supply chain analysis, and so we can go on and on and on…
As for understanding the internal environment, you can use the SWOT or TOWS analysis, the value chain analysis, the competitive analysis, customer and stakeholder analysis, and so we can go on, and on, and on…
Using these tools, and going to exotic destinations, managers and executives design great looking business models and impressive strategies (corporate, business, and functional).
And then? Then, nothing happens – mostly! It is mostly a continuation of the present practices, more of the same!
It is not because there is a lack of knowledge of what is going on in the macro environment!
It is not because there is a lack of knowledge of what is going on in the industry!
It is not because there is a lack of knowledge of managerial responsibilities and strategy tools and processes!
We know all of this! And yet nothing frequently happens, and continues for far too long!
We know about the following reasons for the failure of implementing strategy:
- People Can Not Implement What They Do Not Know
- People Do Not Implement What They Do Not Understand
- People Do Not Implement What They Are Not Committed to
- People Give up on a Strategy Whose Implications Have Not Been Anticipated
And we know about the core capabilities required for effective strategy implementation:
- A leadership style that embraces the paradox of top-down direction and upward influence
- Clear strategy, clear priorities
- An effective top team, whose members possess a general management orientation
- Open vertical communication
- Effective coordination
- Down-the-line leadership
And we know that successful strategy occurs when:
- Knowledge of how strategy is formulated, translated, communicated, implemented and assured within the organisation, exists.
- The formal business processes that are required to optimise the organisation’s capacity to fulfil its strategy, exist.
- The specific and different roles, rights and accountabilities that each level, function and stakeholder has to fulfil, are known.
- A clear understanding of personal and team roles that have to be fulfilled to ensure optimum contribution to strategy by people across all levels and functions, exist.
- Comprehension of the various requirements and roles for different levels, and an appreciation for the fact that strategy consists out of multi-level and multi-functional activities.
- Popular acceptance that legitimate hierarchy and rank are essential components of successful strategy.
- Definition and acceptance of the roles, rights, and accountabilities that specifically do not apply to a certain level, function, or stakeholder.
And despite of all this knowledge about what strategy is and what is required, we still see that only 4% of companies survive after year 10!
But the problem that I see is that it happens because we know about all of it. And we assume there is a link between knowing and doing, between knowing and bringing about a behavioural change.
There is no direct link between knowing and doing! Picking up the knowledge is but an important first step! We need to go through a few stages thereafter:
- The knowledge we gain should first change our thinking patterns.
- Then we should change who we are – our mental models and paradigms.
- Then only can we get to a sustainable and productive change of behaviour
And we need to do this. A change in strategy, or the implementation of any new strategy, effectively requires from us a change management intervention. Otherwise you will be stuck with business as usual – more of the same. And this is not a good place to be in!
Adam Kahane, well-known futurist and expert in strategy, says the following about his participation in the Mon Fleur Scenarios in South Africa in 1991/1992:
“I learned my third lesson from these experiences. Strategy work is not only work of the mind—the only training I had ever had for it—but work of the heart and spirit as well. Without open acceptance of that heart and spirit, you can have neither true connection nor true passion—the source of commitment and will, and the root of all great strategy.”
Readers could do themselves a big favour and read Adam’s work, “Solving Tough Problems” and “Power and Love.”
The relevance of Adam’s remark is that we need to go deeper than just the cognitive level. We need to move into the EQ (emotional intelligence – heart) and the SQ (spiritual intelligence – spirit) levels if we want to get anything meaningful done.
Another author, Otto Scharmer, developed his Theory U, as a meaningful process to get change institutionalized within the organization. He identified 7 stages, where the individual or organization as a whole needs to move from the cognitive level down into the emotional level and still deeper into the spiritual intelligence level, where after they need to move back into the emotional intelligence and then into the cognitive level. The stages are as follows:
- Downloading the facts
- Seeing from the outside
- Sensing from within
These 3 stages fall within the Observation Phase, and require analysts and practitioners to transform what and how they see. It also moves from the cognitive level (downloading) to the emotional level (sensing from within)
This stages require the analyst to move into the soul – it is about letting go the old self and letting come the new Self. It is about transforming who and what you are deep down.
- Visualizing – the ideal future
- Prototyping – in a small part of the company and learning as you go along
- Institutionalizing – once perfected, taking the prototype into the whole organization.
These 3 stages are about transforming action – also referred to by Otto as realization. It takes the analyst and the organization back form the spirit level to the cognitive level, where you need to be to act and to implement.
This is where I lose a lot of my audience. They tell me to get real and realize there is a tangible world out there. But then I tell them about my Viking friends – the MBA students at Aarhus Business School in Aarhus, Denmark. They do an MBA in Change Management, where Otto’s Theory U plays a central role. And I’ve seen engineers and accountants, strong left-brained people, descendants of the Vikings, talking about “going down the U”! How I envy those people!
So it can be done. And it needs to be done!
So how do we move into the level of the spirit? It is not easy. It is not a quick fix. It requires that you transform how and what you look at. It requires that you understand that the economic and technological dimension of the business is but 2 of about 8. You need to understand the psychological and cultural dimensions as well, as you should understand the political dimension – national and organizational! It requires that you know who and what you are – as an individual and as an organization. What is your ethos about? What is your DNA? Your world views and paradigms? How relevant are they? What needs to be changed?
The reality is that this is a difficult journey. But you don’t really have an option. Take the time and study Adam and Otto’s work. Read what Peter Koestenbaum writes about in his excellent work on leadership and the need to be authentic. Read the work of Cameron and Quinn on organizational culture, as well as the work of Goffee and Jones, of Richard Barrett, and Ken Wilber, and many others like them.
The alternative is mediocrity, and slow death, if you are unlucky. The lucky amongst the failures go down fast!