Formulating and deploying effective strategy during good times is hard…A few basic practices can help you along.
One of the fascinating things about most people is their ability to rise to the occasion during times of stress. For many of us, stressful times create focus. They foster creativity. They engender a competitive edge.
Apply heat to most of us, and we respond well. Crisis cuts through the crap. It liquefies culture and allows it to flow.
Nobody questioned the need to change when responding to the global financial crisis. Nobody questioned the need to drastically re-think homeland defense following the 9/11 attacks. Those things, by themselves, liquefied old thinking.
But a crisis shouldn’t–can’t–be the only way to create strong and responsive strategic discipline. How do you get all of these really good things–focus, creativity, edge, and responsiveness–during times of plenty?
How do you, in short, create a strategy that is liquid at room temperature?
I’ll describe one way that might work for you and that I’ve seen work well in many circumstances. And, I’ll give you one that probably will work but that is the wrong way.
Strategic Search As A Liquefying Agent
The fundamental mindset underlying strategic discipline is search. A spirit of inquisitiveness–about one’s flaws, one’s strengths, one’s competition, one’s product, and one’s customer–is the spirit of fluidity that strategic discipline requires.
In your organization, you probably need to build periodic search time into the calendar on each of these aspects. Sure, you can complete a yearly SWOT analysis and get there to some degree (to be clear, a surprising proportion of business leaders don’t even apply that level of periodic discipline). But, a relentless search for the facts in good and bad times is the catalyst of fluid strategy. Why? because without facts and data, you can’t test hypotheses.
So, how do you get there?
One means of getting there is building a strong and ongoing intelligence gathering apparatus. A fatal flaw of too many strategic plans is that they are built upon fact bases that were crammed for the test. A far, far better approach is to constantly scan and gather competitive and customer data as a matter of course, and to use periodic strategic planning sessions to draw implications from the data, rather than to try to gin up data and implications at the same time. Investing in just a bit of excess capacity to gather and disseminate good business intelligence can be a godsend.
Another means of getting there is to enlist a broader set of people in the search for insight. A typical corporate approach to strategic planning during good times is to gather a few experts and draw on their expertise on the way to an incremental adjustment to the plan. Let everyone else keep executing because, well, they are busy with good stuff…
The problem with this approach is it tends to confirm the good times and avoids looking for any canaries in the coal mine. An approach to creating employee, supplier, customer, and other focus groups as critical inputs to strategy on a periodic basis can keep your strategic plan liquid at room temperature.
Finally, the notion of “liquid at room temperature” has to permeate your leadership culture. If your leaders believe that the good times are permanent, they are much more likely to shut down their search for strategic insights before the work is done. Your leaders have to install search as a fundamental part of their job, vs. a reaction to poor business conditions.
A method to avoid…
That last leadership point brings me to an approach that may work for you, but that is best to avoid. I’ve been near leadership cultures who use secrecy as a means of manufacturing a crisis mindset. Leaders were good at masking how good things really were and creating a tense sense of unease among their subordinates…even going so far as to set vastly different performance expectations for subordinates than they set for themselves. This absolutely created liquidity and creativity when it came to strategic search…
…but it’s an approach that, put simply, lacks integrity. Now, if you are the shareholder of your business, you may do as you like. However, if you rely on fooling people into a false sense of insecurity, it will eventually come around to bite you.
To wit: the best example of this is when subordinates, spun up into a sense of crisis by goals that they have to attain in order to meet highly inflated “false crisis” metrics, create and recommend options that senior management never seems to act on (because senior management doesn’t have the same compensation metrics and knows that their own life is good). They conduct a frantic search for options, senior management cherry picks a few and disregards the rest, and subordinates are left to wonder why their superiors don’t share their own sense of urgency–given to them by their superiors.
Do that for a few cycles and people will catch on.
Creating strategy that is liquid at room temperature requires a leadership culture that engenders search, and that builds search into the very fabric of strategic management processes.
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