About a decade ago, I had the good fortune to spend a couple weeks in Europe being drilled by professors from one of the world’s leading business schools in Switzerland. The school specializes in collaboration with businesses around the world and high-level corporate instruction for promising executives. The instructors surpassed anything in my experience from an academic standpoint.
I’m not sure I met all the criteria to qualify as a promising young global executive but I wasn’t going to turn down the opportunity. I don’t know if I was their finest pupil and I’ve probably forgotten much of their message. One point has never left me, though, and it’s probably because I’ve witnessed it over and over again in the business world. It was astonishingly simple yet often ignored.
Are you on the edge of your seat in anticipation? Here is the single most important pearl of wisdom I brought home with me. Your strategy is not what you say. It is what you do. Consider that for a moment. Sounds pretty simple doesn’t it? Start paying attention, though, and you’ll be startled at how profound an observation that really is.
What they’re basically saying is that companies spend hundreds of man-hours analyzing the marketplace, the competition, their internal capabilities and developing SWOTs. Then they write up this long-winded document that few people see, even fewer understand and almost nobody refers to until it’s time to develop a new one. And then, to add insult to injury, they go off and engage in business activity that’s the reverse of their strategy.
Lying To Yourself
Don’t believe it? Look around. In my decades of experience I’ve seen one company do it right and they only arrived at that point after years of doing it wrong. Once they got it right, though, it was clearly different. Here’s an example to show you what I mean.
I worked with one company whose exalted strategy was to stabilize their supply chain by standardizing their pricing and expanding their wholesale customer base. Want to guess what they were actually doing? They had special price tiers and scheduled quarterly promotions for the 4-5 small wholesalers that represented about 85% of their business. They even structured the requirements for the pricing and promotions in such a way that it virtually guaranteed that none of their other suppliers had a prayer of evolving to meet the requirements and become one of the larger customers.
Obviously their actual strategy was not what they said, it was what they were doing. And what they were doing was providing preferential pricing and incentives to ensure that their business became even more concentrated and dependent on a very small percentage of their customers. Not surprisingly, that is exactly what happened. They have since turned over their entire executive board and sold their manufacturing facility. That’s a dramatic example but you can see many small examples everywhere you look.
In Three Easy Steps
So what’s the answer? It sounds simple but it’s difficult to implement. The difficulty comes in trying to force smart people to act simpler and in getting important people to try and seem less important. Anyway, here are three simple steps to making sure that your strategy really is what you say it is.
- Step One: Boil your strategy down to its simplest form. This may mean that you end up with a three word strategy supported by 4-5 bullet points. That’s exactly what they had at the one company I saw that did it right.
- Step Two: Drill it into every single employee. Because your strategy is so simple, you should have no reservations about demanding that everyone knows it and can recite it upon request. I’d suggest you do this and frequently.
- Step Three: Adhere to your strategy ferociously. Give every employee the right to challenge someone, anyone, who tries to deviate from it. No sacred cows and no sacred executives. Anyone who tries to deviate gets challenged.
You Have To Live It
Don’t think it can be done? It can and I’ve seen it. It happened at a very large company and it changed their entire culture in two years from an old boys club to a high performance learning organization. It was so simple it almost defied logic and it stayed that simple.
Here’s the catch. You have to genuinely believe in it and you have to live it from the CEO to the mailroom clerk. If the clerk can’t question the CEO on a clearly misaligned initiative, it fails. I’m not saying the clerk can veto the CEO. I’m saying the CEO will accept, and even welcome, the challenge. This keeps the organization on its toes and empowers everyone to believe and to behave in alignment with the strategy.
If you can’t do it for real, though, you are best off to avoid making a halfhearted attempt. You can’t fake it and you can’t fool a whole company full of employees. People are generally more perceptive than we give them credit for and anything less than a genuine effort will be recognized for what it is. Wait until you’re ready with a well formulated and well supported plan and then make a serious attempt.
Sounds brilliant but I’m not sure it’s realistic in most cases. Managers at the top of the food chain are rarely willing to be questioned by the “mail room clerk”.
November 2nd, 2010 at 9:07 am
Too true. Most of the ones I deal with wouldn’t even consider the opinion of a “mail room clerk”.
November 3rd, 2010 at 6:54 pm