You know there’s an elephant in the room. You don’t have a strategic plan until you’ve been unreasonable enough to name it.
Imagine a corporation’s strategic plan that has all the check-the-box elements required of it. It has a market definition, a strong fact-based trend analysis, a good view of where the business competes and against whom, a nice vision for the future, and even a neatly tailored set of strategic actions to get there.
The plan leverages all the disruptive, innovative, differentiated, mindful, action-oriented, blue-ocean, globalized, core-competence-on-steroids buzzwords and frameworks that the executives and their underlings could find.
It’s beautiful. The board eats it up. And … it’s entirely incomplete and insufficient, to the point of being dangerous. It will not only be in the dustbin in a matter of a year or so (in some cases right after the board meeting), but it will also become a subtle punchline that denigrates the notion of strategic planning for those who are its victims.
OK, that’s the scenario. If you’re an executive of any significant seasoning, you’ve seen this movie before. Let’s look at why this happens.
Why strategy is all too often left incomplete
Strategy of any type—from checkers to chess and football to financial engineering—requires a brutal assessment of the problem at hand. That problem may be definable in broad terms like “growth,” “profitability,” and “market share,” but I doubt it.
The strategic problem is, more often, just a tad more subtle. It revolves around specific, granular realities in the business and competitive landscape. Often, the realities are directly known—even quantified—but they may not be discussed.
To be sure, some executive teams surface problems easily. The problem may look like a cost disadvantage, an aging workforce, a competitor’s new product, slowing salesforce productivity, or any number of other specific issues that when placed in the blinding flame of the corporation’s or business unit’s tidy grand strategy will extinguish it. These teams, typically through lots of practice, talk plainly. They spot the elephant in the room, and they name it.
Other executive teams like to nurture their elephants. They see issues like new-program and M&A failures as things to punish soundly in the hierarchy while excluding from high-level strategic discussions. They find scapegoats at a moment’s notice (and even sometimes name their scapegoats before things turn bad). They very often know there’s a problem, but they lack the courage (or, perhaps more often, have too many competing incentives) to name the elephant. The elephant goes on living, breathing, and sucking the life out of the company’s strategy with its prodigious trunk.
That’s why strategies are incomplete. In the midst of tidy stories of leverage, innovation, and creative competition is an elephant sucking the life out of performance and sustainability. It’s the elephant without a name.
So, what to do?
Let me put this simply: Name your elephants. Get help if possible.
Ideally, you identify them with names and numbers. Most business problems can be stated in quantitative terms. Think you have a capital-allocation issue? Check whether your return on invested capital is too low (or too high!). Think you have a salesforce issue? Selling opportunities per rep can lead you to the answer. Worried about an aging workforce? The numbers don’t lie. Competition eating your lunch? Look at the numbers for market share or Net Promoter Score to see what the market says.
I’m being simple here because naming your elephants doesn’t require a full-blown study.
But there’s a catch: Senior management must be open to discussing elephants. If naming elephants runs counter to incentive plans or egos, you’re likely pushing the proverbial rope up a hill. Motivated board members sometimes fail to name elephants when faced with management who won’t play along. And if that’s the case, you can imagine what happens in the same circumstances to people lower in the hierarchy.
A practical view of how to do it
In our work at Wilson Growth Partners, we focus intensely on establishing fact-based views of our clients’ strategic elephants. It’s our goal to name the elephants alongside management in order to build a complete view of corporate and business-unit strategy. One method I’m fond of is working with senior leaders to establish expectations for performance alongside capabilities required, and forcing (yes, forcing) a candid discussion on the gaps in both. Many elephants reside in those gaps.
Elephant hunting has to be done deliberately and early in the process. And even in the best-resourced organizations, it’s the one action that often can’t be done by internal resources in a strategic-planning process. An independent, objective advisor can name elephants that management and boards simply can’t. Outsiders can be just unreasonable enough to bring up the hard stuff (as they should).
Now it’s your turn: What examples of destructive elephants have you seen? How have you seen teams name their elephants (or not)?