How to Set and Simplify Business Strategy

stand out strategy

Making Big Decisions Better

All organizations are faced with decisions. What to focus on, what to invest in, how to get to there from here are all common questions when approaching strategy.

I’ve read many books on strategy. There are many that are theoretical. I enjoy them and think about the implications. But there are a few that are actionable. As a CEO, I can use aspects of them immediately. That’s what I found when I read Tim Lewko’s new book, Making Big Decisions Better: How to Set and Simplify Business Strategy. Tim Lewko is the CEO of Thinking Dimensions Group, and his book goes right to the core of setting strategy that you can implement immediately.

I followed up with him to discuss his new book and his strategic work.

 

“Strategy is decision-making.” –Tim Lewko

 

Develop a Common Definition of Strategy

Why is it problematic that most of us don’t share a common definition of “strategy”?

Not having a common definition of strategy creates all the problems CEOs, executives, managers and people who want to make their mark are trying to avoid in the critical areas of:

Purpose

Growth

Profit

 

What are some of the common misconceptions about strategy?

The list could be quite long but I will share the top three that trip up firms in setting a quality strategy—and that are easy to fix if the CEO and leadership chooses to. They are:

  • EUREKA – It’s a magical idea that just comes to you
  • SINGULAR – One person holds the key to the great idea
  • BYPASS SWEAT EQUITY – Outsiders can tell you the answer and it should work

 

“Cause is king for sustaining results.” –Tim Lewko

 

Be Wary of Outsourcing Strategy

Why is it often problematic to “outsource strategy” work?making big decisions better book jacket

There are many large successful firms that come and provide the “answer” that shows up as a long set of PowerPoint slides – and this prescriptive approach is the choice for many CEOs.  However, the approach which I practice is process based – where we bring a proven strategy system that “forces tough tradeoffs” and leaves them in a better place because they created the strategy and understand how to modify the choices as events fold.  This process approach helps to avoid the problems associated with outsourcing strategy including:

  • DEFAULT on sweat equity – missing out on working through, understanding and deciding the key things that matter from EXTERNAL and INTERNAL standpoints
  • TOLD WHAT YOU ALREADY KNOW – in my experience, clients already know 85% of what’s holding the business back (outsiders may give you 60%) so why pay for what is already known?
  • DELAY or DESTROY BUY-IN – if you outsource strategy, you have already short-changed your ability to implement the strategy – because you have side-stepped the most important people – your executive team and workforce who need to intimately understand the why behind the PRODUCT, MARKET and CAPABILITY choices that are being made. Sure, a great CEO communication or town hall helps to sell the outsourced strategy, but deep down those closest to the issues feel side-stepped – and it takes an awful lot of time to get them to buy in to something that is not theirs.

 

“Unwarranted complications are killing strategy in organizations.” –Tim Lewko

 

Have a Visible Process for Strategy

Your Playbook to Digital Transformation

Digital Business Transformation concept with arrow of compass (3

Reach for the Future

Nearly every business is impacted by digital transformation.

The key question for leaders is how to overcome the pull of the past to reach for the digital future. The authors of Digital@Scale: The Playbook You Need to Transform Your Company have developed a playbook based on years of McKinsey experience and research.

I recently spoke to author Anand Swaminathan, Senior Partner in McKinsey’s San Francisco office, about the book and his work in the area of digital transformation.

 

“Change is the end result of all true learning.” -Leo Buscaglia

 

3 Barriers to Change 

What do leaders need to know about identifying the barriers to change?

In our experience, executives face a fundamental conflict: Change requires a sense of urgency while highly-efficient organizations tend to have high levels of inertia. When business is going well, managers and employees generally only pay lip service to change requirements. Knowing that, there are three barriers we’ve identified:

  1. The good is the enemy of the better: Efficient, currently successful organizations often slow down the necessary change: Why cannibalize what is successful today? Why destroy efficiency gains of a ‘well-oiled machine’?
  2. Watch out for your top team: Ironically, today’s most successful managers might be the ones slowing down your transformation efforts since they have the most to lose. Transformation needs to start with the person at the top, and it’s often those who have grown accustomed to success that find it most difficult to change course.
  3. Your DNA takes time to change: Don’t underestimate the time and effort required to change deep-rooted mindsets and ways of working. Your legacy business exerts a natural gravitational pull that will stop all meaningful change unless you’re persistent and change at enough scale to break through

 

“Transformation is often more about unlearning than learning.” -Richard Rohr

 

What is the role of the CEO when it comes to digital transformation?

The successful digital transformations we see out there have one common denominator: the CEO spearheading and promoting the digital transformation. They are making it front and center of their personal agenda. Only if change is demonstrated and exemplified by the top management will the necessary changes to structures, processes, management instruments, as well as the establishment of new skills and new IT systems, be successful. That can mean using new technologies, challenging existing ways of doing business, and making the bold decisions necessary to change the trajectory of the business.

 

Assess Your Readiness

How can management assess the current strategy of the company and its readiness for digital transformation?Digital@Scale book cover

That’s two questions. The first is understanding your strategy, and that requires looking at sources of value – where they’re created in your business and in your sector. Most important, you need to look at where sources of value are being created outside of your sector – that’s where some of the biggest changes (and challenges) might be happening.

Then you need to look at where you are today and what needs to change. There are lots of assessments and diagnostics out there, but you need to take a cold-eyed view of where you are as a digital business and what needs to be in place to drive value at scale. As an example, we have developed a comprehensive benchmark to derive a company’s Digital Quotient (DQTM), road-tested with several hundred organizations across the globe. It helps leadership to take stock compared to best practices across sectors and within its own industry.

In addition to the benchmark, some questions that management should start with to determine the urgency and their organization’s readiness for change include:

  • Are we assessing whether we can use our strengths to penetrate completely new industries within the current rules?
  • Are we actively creating an ecosystem of partners, customers and suppliers that will last into the digital world?
  • Have we defined a feasible timescale and meaningful KPIs to reliably measure success or failure?

 

“Transformation literally means going beyond your form.” -Wayne Dyer

 

Break the Silos

A Leader’s Role in Achieving Excellence in Execution

Leadership execution
This is a guest post by Robin Speculand, author of Excellence in Execution: How to Implement Your Strategy. Robin is the founder and CEO of Bridges Business Consultancy and creator of the Implementation Hub.

Don’t Lead by Example

To guide an organization through the execution of its strategy, leaders… don’t lead by example.

In strategy execution, leaders are responsible for driving the strategy forward and championing the direction the organization is heading. This involves, for example, reviewing progress, coaching people, resolving issues, and ensuring the right outcomes are being achieved. Leaders don’t lead by example as they don’t implement strategy; their employees do.

Before you even start your strategy execution, the odds are stacked against you as more fail than succeed. I have seen from my seventeen years consulting in this field that leaders are guilty of delegating the execution and not paying adequate attention to it. When leaders do this, their people also stop paying attention to it. McKinsey & Company stated that, “Half of all efforts to transform organization performance fail either because leaders don’t act as role models for change or because people in the organization defend the status quo.”

 

Show Confidence in the Strategy

If leaders perceive execution as an interruption to the business, they will not drive and champion it.

Anything short of embracing a new strategy and its execution by leaders can be seen by employees as a lack of confidence in the strategy itself. That feeling will spread throughout the organization.

  • If you only apply lip service to the execution without championing it, employees will sense the lack of commitment and not step up; the execution will fail.
  • If you don’t create the time to oversee the implementation journey, change the agenda and explain why the organization needs to transform, then employees will sense the lack of commitment and not step up; the execution will fail.
  • If you don’t set the strategy and create the budget to allocate required funding, employees will sense the lack of commitment and not step up; the execution will fail.

 

Booz and Co. Survey: 53% don’t believe their company’s strategy will lead to success.

 

A key question to consider is:What are you willing to do to execute your organization’s strategy?”

In contrast, strategy execution progresses when leaders support their comments with time and actions. Because only so much can go on a leader’s radar, he or she has to carefully select which actions will best drive the execution forward and where to invest their time.

Booz & Company surveyed executives from around the world on the results of their organizations’ strategic initiatives. Given more than 2,350 responses, the findings suggest a high degree of disillusionment, including:

  • Two-thirds (67%) say their company’s capabilities do not fully support the company’s own strategy and the way it creates value in the market.
  • Only one in five executives (21%) thinks the company has a “right to win” in all the markets it competes in.
  • Most of the respondents (53%) don’t believe their company’s strategy would lead to success.

If leaders don’t believe in the strategy, they will never be authentic and sincere in executing it.

 

PWC Survey: 55% of CEO’s state lack of trust is a major threat to growth.

 

Demonstrate Increased Commitment

How Your Business Will Profit from Innovative Collaboration

Drive Strategic Collaboration

Imagine a world where your customers want your organization to succeed. Where your employees are personally committed to your company’s success. Where your organization is not focused only on its own results, but on a collaborative effort that spans a community and beyond.

David Nour’s new book, CO-CREATE: How Your Business Will Profit from Innovative and Strategic Collaboration, takes these dreams on as he explores ways to drive strategy and innovation. His new work challenges us to think about relationships in a completely different way. I recently asked him about his work and new book.

 

“Your brand identity is beyond your control.” -David Nour

 

Co-creation. Share with our audience what it is and why it’s important.

It means collaborating with your most valuable business relationships to transform your business or revenue model. It can drive how you iterate, innovate or disrupt your market and in the process, evolve far beyond anything you could do alone.

 

“Introspection leads to right action.” -David Nour

 

You start the book by saying that, “Introspection leads to right action.” What’s the best way to do this?

Real introspection takes three critical elements:

  1. Think Time – Unfortunately, given the hectic pace most of us work these days, we don’t get enough quality think time to set the minutia of the day aside and really consider our relevant strengths and strategic relationships, as well as personal or professional growth opportunities.
  2. An Inner Circle – We need to surround ourselves with fewer, but more authentic and impactful, business relationships. Most of us could dramatically benefit from fewer partnerships and alliances and more thought partners who will tell us what we need to hear.
  3. Leading Drivers – We can’t raise the bar on our intellect, performance, execution and results… if we don’t measure leading drivers of our progress—not lagging indicators of where we’ve been, but predictive insights toward where we’re headed. You can’t win a race looking in the rear view mirror. Focus your energies on the road ahead.

 

Stay In Tune With Your Customers

What A Caterpillar Can Teach You About Growing Your Business

Master Near Constant Change

 

Many people think that businesses should develop a strategy and stick to it at all costs.

But Sid Mohasseb, serial entrepreneur, investor, venture capitalist, and former the Head of Strategic Innovation for KPMG’s Strategy Practice teaches an entirely different approach: It’s the ability to adjust your strategy, almost constantly, that brings success. The environment is uncertain and changing, and changing with it is vital.

Sid teaches that we must push for more and evolve from one approach to another.

I recently had the opportunity to talk with him about his new book, The Caterpillar’s Edge: Evolve, Evolve Again, and Thrive in Business.

 

Prepare for Constant Flux

Why a caterpillar?

The caterpillar evolves many times over before it becomes a butterfly. It changes form until it turns into a completely different species. The caterpillar teaches us the wisdom of constant and incremental evolution and offers the promise of flying.  To compete, to advance and to win, in our businesses and in our personal lives, we must evolve constantly and purposefully, always.

 

“Things do not change. We change.” -Henry David Thoreau

 

How is the game changing? And how do leaders prepare for the constant flux?

Innovation is constantly approaching from every corner of the world. The speed of change fueled by unprecedented technological advancements and constantly increasing customer expectations are challenging companies to “stay relevant” – competitive advantages are temporary. The game has changed from, “How do I gain an advantage and defend it?” to “How do I change to stay relevant?”

To win in a state of constant flux, leaders must shift their minds and change their actions. First, by realizing their addictions (old assumptions, orthodoxies, biases, etc.). Next, by aligning with uncertainty – no plans can be permanent and no decisions are certain. Leaders must learn to live with probability and a portfolio of related plans – always ready to take the path that offers the most likelihood of success. They should also appreciate the reality of their capabilities and aim to build the future in increments; success cycles must be shorter and capabilities (people & systems) have to be created accordingly. Last, leaders must constantly look for the next advantage and aspire for more “Aha’s.” They should look for and discover the next challenge or opportunity, always; innovate, always (create new value), and evolve, always.

 

“To win in a state of constant flux, leaders must shift their minds and actions.” -Sid Mohasseb

 

How to Embrace Change

Why do we so often refuse to deal with change and uncertainty?caterpillar-cover

The refusal is more natural than intentional. We refuse to deal with change because of our fears of unknown (what is on the other side of change) and comfort with the status quo (comfortable routines we are used to and have served us well in the past). Most people embrace change when they i) realize the severity of the problem they face and ii) gain trust that what they can change to is a better state. We often refuse to change because we believe that the status quo does not present a major danger and/or we don’t trust the alternative paths offered by our leaders.

At business school and later at work, we are trained to look for certainty to plan to and execute against – assuming reduced risk. In our personal lives, we are comfortable living with probability and operating in uncertainly – there is a 40% chance of rain, and we decide, based on our risk tolerance, to take an umbrella or not. In our professional lives, we are expected to be certain and execute with confidence in outcomes. People, on a personal level, can innately adjust to uncertainty. However, they are reluctant operating with uncertainty at work because corporations expect and reward the illusion of certainty.

 

“The only thing that is constant is change.” -Heraclitus

 

3 Categories for Leaders to Plan in a World of Change