Vision regulates potential

Many senior leaders view their role as a responsibility to maintain or incrementally improve the performance of the organization that pays their salary. What they see in terms of structure, markets, culture is fairly static in their minds. They feel like a steward of the current state. There is a sense that maintaining what currently is, with marginal improvement equals success. Most leaders fall into this category.

There are other leaders, who see their job as being focused on more than maintaining. They truly see themselves as a steward of the potential of the organization. They understand that their organization has a thousand potential futures, and they are busy selecting and creating the future in their minds. They are aspirational thinkers who have built-in blue ocean strategy thinking. These are the leaders that are creating the future world that you are going to live in, and manage the organization that you’re going to try and keep up with.

Real visionary leaders speak passionately about a future that doesn’t yet exist, and work to create momentum that stays with the organization long after they’re gone.

Raising eyebrows as a path to changing the world

What role does vision play in the future of your organization? If you have gone for more than a few corporate meetings without a senior leader referencing some component of it, it’s not playing the role that it could. This is the point where many would stop reading this entry. Are vision statements really that big of a deal? They are if you’re trying to change the world, they aren’t if you’re treading water and trying to maintain status quo.

When a vision statement is bold enough, and matched with the confidence to make it happen, it can become an entity unto itself. It can be the exciting voyage that you’re all lucky to be on. It can become the motivating mechanism that changes not only your organization, but your entire industry. It can transcend the leaders that wrote it. We see this through examples where one leader sets a HUGE vision, and it passes to others to complete it, with no less energy behind it.

• US space race passing from one president to the next
• Boeing changing the airline industry with the ballsy development of the 747 – multiple CEOs
• Walmart and its rise to global dominance from a small store
• Disney
• Etc…

Every organization that plays a sustainably significant role in its industry is led by people that understand this. If you want your organization to accomplish something significant and exciting, it all starts with a leader who is willing to stand in front of the employees and declare something that raises eyebrows.

Your first 2 weeks in a new strategy management job

So you’re starting a new job in a new company. You’re on point for managing strategy, and you have no idea what is going on in the new environment. Strategy management is about fixing, increasing alignment, driving out greater strategic clarity. So, you can’t start fixing until you know what the gaps are. What are the right questions to ask?

Strategic clarity
– How is the vision articulated? Is it a true BHAG?
– Is there a value discipline? Does the organization relentless pursue alignment?
– Is there a strategy map? Does it describe transformational objectives that signify strategic maturity?
– Is the balanced scorecard aligned to the strategy map?
– Is the strategy organized?
– Are the various components of the strategy clearly differentiated and managed?

Is the strategy the unifying focal point within the organization?
– Does anyone know what it is?
– Is it a regurgitation of a one-liner, or does it make sense to people?
– Is it a cookie cutter vision statement or does it mean something to people?
– Does integration happen between division lines, or is a divisional-operational focus running the show?

Getting your bearings
– Is there a line of sight for accountability between teams and the strategy map?
– Is there a standardized approach to team and division alignment?
– Is the balanced scorecard used to create a conversation or justify variable comp?
– Is variable comp tied back to the strategy?
– Is the business plan the basis for executive performance plans?

The accountability structure
– Does the person leading strategy development have access to the CEO?
– Does the executive see the strategy as the most critical part of their job?
– How much time per month do they spend discussing it?
– Do functional strategy areas within the organization have true strategies or a laundry list of operational priorities?

Culture
– What is the culture of the organization like?
– Does it enable the strategy/value discipline or resist it?

Clients
– How do we perform against our clients expectations? (quantitatively)
– What are the top issues that stand between us and greater performance?
– How do we measure client loyalty?
– Are there well-understood client experience objectives that help employees align HOW they do what they do… something that explains the value discipline in a practical sense?

Positioning strategy
– Does the organization have a sense of how it is positioned relative to competitors, and the market position it is seeking to create?

Processes
– How is the strategy reported?
– Is functional strategy alignment well-managed, with clear accountability for results?
– How often do strategy implementation reviews occur? How are these meetings structured?

Finally, talk to Joe 6-pack. A strategy is only meaningful if it travels through your employees to your clients. This will let you know if all the cool stuff happening in the board room is having any practical effect on your organization.

Measurement: art and science

Using corporate measurement, we seek to:

• create a sense of progress
• justify our sense of excellence
• quantify performance
• understand whether we’re getting anywhere
• test theories about what is truly important
• discover transformational drivers

And while we often come to believe that the measures we are using are the “God’s truth,” we need to remember that the relationships we have with our customers are inevitably more fluid and dynamic than any measure could capture. Especially, knowing that measuring too many things is distracting, and not enough creates too many gaps. For this reason, we need to look beyond the numbers, talk to those closest to the results to understand what factors are internally/externally supporting and resisting our success on an ongoing basis. We must never become complacent enough to be satisfied with a cursory review of lagging indicators.

After all, relationships with clients are as much emotional as rational. Hence, they tend to be unpredictable and difficult to accurately quantify. Much like scoring your marriage as an 83%… it just doesn’t say it all. While we look to be confident that we are measuring the things that are most critical, we need to fill in the gaps by relentlessly asking what it means, and what is causing the numbers to be what they are.

Discrete functions

Below the corporate level strategy, there are what I describe as functional or core strategies. This is where functions like HR, technology and marketing strategies reside. Every one of these groups are absolutely critical in aligning the organization to create the capacity for the company to be successful. Without alignment, the organization won’t have the culture, competencies, tools, or plans to execute the strategy/value discipline.

At first glance, these roles appear discrete in their focus. And in many organizations, depending on cultural dynamics and methodologies, they may be managed in this way. Of course, there is more than one way to get things done, but a lack of integration at this level can become a significant barrier to the success of your strategy.

Strategy is the unifying force within an organization. It’s the common purpose that causes teams to get together and talk about cross-over. Teams need to be reaching up to create line of sight, and this happens when leadership, culture, strategy and a burning platform get together to play. The point I’m making is that while there may arguably be discrete functions within an organization, they should never function in a completely independent way. When they do, the strategy disappears.

The stories that simple and complex analysis will tell

Every measure you will use has a limitation. In order to quantitatively capture something, you need to exclude everything else. When you measure this, you are immediately not measuring that. Sometimes people forget to correlate multiple data points, even intuitively, in their analysis of what your results really mean. This can lead to complaints about the effectiveness of a given measure. But, don’t forget to use your measures both on their own, and in tandem with other measures that help tell a more complete story.

For example, measuring market share doesn’t measure client loyalty, and it doesn’t measure the profitability of a client relationship. For this reason, look to combine data points. If you look at client loyalty, profitability and market share separately… each measure says quite a bit. When you combine them, it is possible to create a visual representation that can open your eyes in a different way.

It’s possible to be too focused on detail, and miss the obvious simple message your metrics are capable of sending. It’s also possible to be too focused on the surface, and miss a story that exists in the complexity of correlating multiple data points. Have you become too comfortable with one or the other?

Less urgent, more important

As Stephen Covey once wrote, the demands on our time can be categorized into a matrix base on the attributes of importance and urgency. Within this matrix, 4 categories of time demands arise:

Urgent, but not important: People that spend their time here…o Have a short-term focus
o Focused on crisis management
o See goals and plans are worthless
o Feel out of control

Urgent, and important: People that spend their time here…
o Stressed
o Always putting out fires

Not urgent, and not important: People that spend their time here…o Irresponsible
o Unemployed

Not urgent, and important: People that spend their time here…o Balanced
o Disciplined
o Feeling of healthy control
o Experience few crises

At the upper levels of management, how you spend your time has a much greater impact on the effectiveness of the organization than it does in most layers below. One of the reasons for this is that this is where strategy initially lives and dies. It grows out to the organization, but it is rooted in leadership.

For the most part, strategy doesn’t present itself as a burning, immediate demand that requires a decision and action RIGHT NOW. This is one of the reasons why executives spend less than an hour a month on average talking about it. We can very easily get distracted, and with a good reason. And yet, how important is the strategy? For companies that will have a hand in creating the future, the strategy is everything. Without it, you’re waiting for someone else to tell you what the future will look like.

Now before we start beating people up, why does this happen? Are people golfing when they should be strategizing? The operational demands on most leaders are really significant, there is no doubt. And the extent to which an organization is resourced appropriately certainly plays a role here, so what can be done?

First, we need to acknowledge a few things. Operational is about today, it is short term. Strategy is about designing tomorrow, it is obviously longer-term. These two demands should maintain an appropriate tension. In most cases, strategy doesn’t require 50% of your time, like your clients probably do. Having said that, it requires more than the 1 hour a month most organizations give it. Spending time in this area is the only way you get ahead of the urgent demands and risks.

Strategy is quite simply less urgent, and more important than most other things going on. How much play does it get in your organization?

What drives customer loyalty within your target market?

As one of the most fundamental and frequently unanswered questions, your ability to get to the heart of this issue will impact your success to a very great extent. This is one of those areas where thinking you know and not acquiring data could be a huge mistake.

A business plan is typically either focused on strengthening performance against known client expectations (externally: addressing performance gaps / internally: addressing the root cause of those performance gaps) or it is focused on reacting to operational improvements. You are either taking new ground or you’re treading water. Most competitive environments are simply too complex and dynamic for nothing to change. But not knowing the specific areas where you’re falling short, and then investing resources into projects anyway… well that tends to result in wasted resources.

When you:
• allow your clients to define the criteria for what is important
• determine what level of performance they expect
• understand how you’re performing in all of those areas

…then you understand where an investment will be meaningful.

Information

It’s worthwhile stopping every now and then to think about what information you really need to improve your business. In working with various clients over the years, I’ve noticed a tendency to eventually get used to the amount of information they had access to, even though it was making the management and growth of their business very difficult.

In the areas of:
• your performance against client expectations
• your internal business model and how it creates client experiences
• potential new or emerging markets
• unmet client needs

Ask yourself the following:
• Do you have information available today that you’re not acting on?
• Is there a specific kind of information that would help you make a key decision that you don’t currently have?
• What information would position you to take a quantum leap forward?

Continuous improvement means never resting. Whether you’re in a dominant competitive position or you’re chasing down the leader, the faster and more intently you move forward, the harder it is for your competition to catch you… and the more likely you’ll be to overtake the organization you’re chasing.

You have the potential to change your market, create a new market, become the dominant player in your market, and become the kind of organization that people write books about. Those that can see that belong in leadership positions. Those who can’t, do not.