It’s how decisions are made.
STRATEGY IS NOT
Strategy is not a thing nor is it an event. Annual strategic planning is not strategy. Having a strategic plan is not strategy. Strategy is not linear. Leaders who gather one time a year to develop a strategy is not strategy. Science alone is not strategy. Art alone is not strategy. An officer in charge of strategy is not strategy. Having profit goals is not strategy. Customer focus is not strategy.
Why start out with what strategy is not?
To support a reset. To challenge conventional understanding. Books about performance, execution, implementation and outcomes remain among the most recommended business books.
Leaders and managers in all types of organizations have fallen into the ‘pressures of results’. Pressure that publicly traded companies assume on ‘managers’ to perform which equals return a profit to shareholders. The flaw in this focus is that it is not only narrowly defining what success means but it also puts weight on the outputs and not the things that go into creating a growing, high performing organization. (We’ll delve more into this in a future post.)
Strategy is a lot of things but most simply ‘strategy is how decisions are made.’
Nothing helped me to distill that simple ‘tweet length’ definition better than the engaging, curious and challenging dialogue with master’s degree students in sustainability. With an open mindset they also reconcile that ‘business as usual’ is not working and success looks differently. That opened my own mind to consider the limitations of a business model that had relegated strategy to a function, person or event.
No matter how much or how little planning or formalization goes into defining a decision or the decision-making process, is informed by strategy or lack of one.
“The Ritz–Carlton is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience.” – Ritzcarlton.com
In alignment with this mission, Ritz-Carlton has granted every employee with $2000 budget, daily, to use at their discretion to rectify a customer concern. Consider the time when a member guest did not receive a wake-up call at the requested time and missed his flight. The hotel agent receiving this situation was able to mail him and his wife (known as part of the customer profile) an embossed robe shipped to his home with overnight service with a note of apology.
Ritz-Carlton’s strategy is to ensure that they deliver on their mission through empowering every single employee with decision-making power: a no-questions-asked-budget to rectify any customer issue or to provide service that delights them. This spurs creativity, agency and ownership of the brand which pays greater dividends than the cost of using the budget amounts.
Whether a barista in a coffee shop or a manager on a manufacturing floor or a teller at a bank or the founder of a start-up, the information an individual uses to make a decision is largely and sometimes exclusively driven by strategy, good or bad.
ART AND SCIENCE
Comprehensive definitions of the components of creating strategy include aspects that
are science based and components that are art based. Military leaders have provided a model of leadership that balances information, tactics and knowledge with deduction,lessons learned, insights and even intuition.
The things that comprise a strategy include the components core to an organization’s reason for being: vision, mission, values and purpose. Strategy is also informed by decision-rules, organizational structure, and most importantly the promise to the customer. (yes, this last one is informed by mission and purpose in a well-founded organization but I’ll share later why I call it out as separate.)
Some questions that inform an understanding of how decisions are made: is the organizational structure hierarchical or traditional in managers having command and sharing information? Are ideas formally asked for or is there a culture of trust with a ‘no fear of failure’ where any idea is something to consider and vet? Are all individuals tied to the mission or customer impact or just a specific customer-facing group? Is the purpose of the organization aligned to the day-to-day work of the organization? Is time dedicated to strategic thinking, as a distinct exercise different from planning or implementation?
As part of my own learning to teach strategy after years of consulting on strategy, I most serendipitously met Julia Sloan. She is the world’s expert in Learning to Think Strategically and just gifted me the 4th edition copy of her book.
How we learn to think sets the foundation for how we actually do strategy. And if we are not prepared to learn and grow from that learning, we are limited in our ability to ‘do’ strategy or be strategic. Her research with leaders about the role that thinking plays in doing strategy has informed all that I do. She sets forth a simple triangle.
Her lectures confirm that there are tensions that connect each aspect of the strategic process: thinking, planning and implementation. They change all of the time based on circumstances and factors that affect business and organizational interactions. This requires that the manager of strategy be comfortable in such tensions and navigating a changing environment. Using structure to honor the role of thinking by all players, is the ultimate objective of any leader.
Strategy is dedicated time for thinking. Ensuring the problem is defined correctly before diving into solving. Ensuring ideas are exhausted to best position for innovation. Ensuring trust is established to welcome the identification of the proverbial elephant in the room.
Strategy is a system. Interdependent parts of art and science each being called upon depending on the situation at hand or the objectives aspired.
Strategy is supported by all roles having clear expectations and contributing in alignment – aka complimentary or mutually supportive, to the purpose of the organization or it’s reason for existence.
Strategy is bringing inputs – people, resources, knowledge, information and potential all together in the most essential, thoughtful and consistent manner possible.
Strategy is realizing (that means subsequent to something) that the inputs you have brought together will respond, creating outputs. These in turn will yield outcomes, good or bad.
Strategy is most often associated with business practices or large organizations. But any organization of people, for profit or not, incorporated or community organized, either formally or informally evolves from strategy that is strong or strategy that is lacking.
So after reflecting on both the living of strategy in organizations, the teaching of strategy to business students worried about shifting business for good and my own process of learning, I remain committed to this definition. It invites us to consider the inputs, the complexity of those and that our leadership creates impact, taking time to shift that impact.
Strategy is how decisions are made.