https://hbr.org/2024/08/keep-strategy-simple#:~:text=At%20the%20end%20of%20the%20day%2C%20the%20key%20thing%20to%20remember%20is%20that%20a%20strategy%20is%20about%20identifying%20where%20you%20need%20to%20go%20in%20order%20to%20satisfy%20your%20stakeholders%E2%80%99%20needs
Keep Strategy Simple
In one of my recent LinkedIn discussions about business strategy, a commenter lamented: “Unfortunately, many of the strategic plans we see are no more than a mish-mash collage of ‘individual level’ rush-to-do’s, often missing out on an ‘organization-level’ cohesive and thought-through design intent.”
My correspondent had tagged an important challenge for all companies: where does strategy making end and execution begin? Most haven’t found a clear answer to this question and the impact is immense. It means that businesses develop strategic plans where they’re not required and fail to develop strategic plans where they are.
The reason for this failure is that they are rushing to action without taking the time to develop a clear and easy to understand strategy to guide their action planning. And that’s because they haven’t realized that articulating a simple strategy is a challenging task. As Steve Jobs once put it: “Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.”
There’s no one right way to make a strategy. If there were, then we’d all know it by now. But I can offer some tips that will help you get there.
Don’t develop strategic plans for functions.
Clive is CEO of a business I’ll call “Scrupulous,” which provides commercial cleaning equipment, parts, and service to its business customers. I reviewed the company’s documents in preparation for a senior management strategic planning and performance measurement workshop.
What struck me was the number of “strategic plans” they had. One each for Marketing, HR, and IT. (This is not an uncommon practice and even advocated by consultants.) And each contained a list of actions. For example, the Marketing Strategic Plan was a list of actions to be carried out by marketing staff, such as, “Arrange face-to-face meetings with major accounts” and “Research companies operating in the industry to identify prospects and add to [customer relationship management system].”
Marketing is a process or, if you prefer, an activity carried out by individuals. (The “ing” on the word tells you that.) So, if you couple “marketing” with “strategic plan” the result is most likely to become a list of actions carried out by individuals.
Marketing’s plan was indeed an operational one not a strategic one. While that’s as it should be, why label it a “strategic plan” except to make it sound more important. The practice lowers the significance of “strategy” and “strategic plan” for members of the organization where it is relevant and important.
Confine “strategy” to the business level.
Scrupulous lacked a strategic perspective at the business level because executives equated “strategy” with action. Strategy involves positioning, not action. For example, a company may take a position on product quality — such as high end with a premium price, or low end at a low cost.
Take this product quality position snapshot from Toyota. “We will continuously strive to delight our customers with the outstanding quality of our products and services.” With this and back-up statements, Toyota draws a line in the sand by stressing the importance it places on its products being consistently reliable. It sees this as part of achieving a competitive advantage. We know it follows through on this by the way it instantly recalls any models with problems.
As another example of positioning, also from a well-known brand, catch this glimpse of McDonalds positioning on customer service: “For individuals looking for a quick-service restaurant with an exceptional customer experience.” Note that it is a position of the company not an action by an individual or an activity of a department. McDonalds sees this as a key ingredient to its competitive edge.
Clive’s task is to articulate these strategic positions in statements so that his executive team is clear about where Scrupulous stands. Clarity at the business level about the positioning then informs operational planning for the functions and teams.
Keep strategy and action separate.
Individual action focused on execution sits below business strategy and falls on the shoulders of various departments or functions (HR, finance, manufacturing/operations and marketing). In Toyota’s case this includes actions from members of functions such as “create and nurture people of quality by continuous education and training” (HR) and “strengthen supply chain by an effective traceability system” (manufacturing).
To avoid strategy becoming mere action, you need to take a helicopter view of your organization and consider its relationship with its key stakeholders and competitors. This idea is congruent with the origins of “strategy” in the military. There, armies looked at their positioning “from above,” so to speak, to assess their strengths and weaknesses against the opposition.
From that helicopter view you see the interactions between Scrupulous, its stakeholders and competitors. “Strategy” involves obtaining a competitive advantage on the strategic factors that these stakeholders value such as product quality and service for customers. Doing so bats away the competition.
A critical change in thinking can often be affected by changing the language used within the organization. I recommended that Scrupulous’ executives use “customer strategy” in place of “marketing strategy” and “employee strategy” in place of “HR strategy,” for example. This places their minds where it should be for strategy — outside with stakeholders, not inside with functions.
Mind your language.
The use of language and terms has a fundamental impact on thought and behavior. Whenever you find yourself confused about the boundaries between your strategy and the actions you’re taking, it may help remember this simple aphorism: What happens on the outside is strategy, what happens on the inside is action.
Start by ditching terms like “marketing strategy” and “HR strategy.” It’s a big call, I know, because it’s common practice. But common practice doesn’t make it best practice. Replace them with “customer strategy” and “employee strategy.” This is more than semantics as it broadens thinking. The term “customer strategy” is more likely to keep you focused on the customers. It forces you to look outside to your stakeholders’ needs.
Then shelve terms like “IT strategic plan.” A plan is not a strategy. That’s not to say that plans aren’t important — IT, HR, and all teams and functions should have plans — but plans are operational constructs, however you label them. If you start calling plans strategic, you’ll be tempted to short-change the effort you need to make to create a good strategy.
• • •
I can’t guarantee that that this advice will get you to the right strategy. But it should, at least, start you on the way there, and prevent you from making some basic mistakes. At the end of the day, the key thing to remember is that a strategy is about identifying where you need to go in order to satisfy your stakeholders’ needs. As such, it is essentially an outward looking, relatively high-level exercise. Only after you’ve figured out where you want to go should you move to the operational challenge of figuring out the specific steps you’ll need to take on the inside in order to get there.
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