Strategy and Performance — It’s About Process.
There is a tangible and direct link between the process you adopt in developing your strategic plans and the performance of your business. It has nothing to do with the cleverness of your strategies but rather the unity that your process creates in your team. Unfortunately, many strategic plans are developed or reviewed annually and end up owned and delivered by no one.
Active Knowledge Question:
Does your strategic planning process connect with the people in your business?
Strategic planning is an art, but it is a lost art. Nevertheless, it is one of the essential tools that leadership can utilise to engage with the talent and creativity in their business. And to muster energy and commitment from everyone working with them.
The competitive strength of your business lies in the combined talent and effort of everyone who works within and with your business. And if your strategic planning process is well-designed, it can muster and bring that talent to the forefront.
But most strategic planning processes are seen as the exclusive domain of the Board and Senior Leadership. Even at that level, there is often a struggle as to who is best equipped to develop strategic plans; a struggle of authority and control.
There is an ill-founded concept that strategy is formulated and then implemented. And therefore, a Board, with or without senior leaders, is tasked with formulating strategy, and once formulated it is passed down to others to deliver. When Kenneth Andrews published his work ‘The Concept of Corporate Strategy’ in 1971 and proposed a model of formulation and implementation, he never intended that these aspects become separated to the extent they have been in contemporary businesses. Formulation and implementation are one continuum, and a strategy cannot be formulated unless its implementation is clear, accepted and achievable. They are inseparable partners.
A strategy is nothing until it is delivered, and often success is achieved through emergent or unrealised strategies. It is rare for a strategy as formulated to be delivered in its original form. Mintzberg and Waters, in 1985, spoke in their work ‘Types of Strategies’ to the impact of emergent strategies on what was intended, coining the phrase strategic learning. Emergence allows human ingenuity, a crafting, to be applied in the marketplace to make the strategy work and achieve the success that was intended. And in some instances, the end product can be very different to what was initially intended; think the Honda Effect by Pascale 1984.
The key message is that the team responsible for making a strategy real, need to be free to bring that intended strategy to life. And to do that effectively, they must have some ownership of that strategy; a part in creating it and then delivering it.
A well-crafted strategic planning process will draw contribution and creativity into the process and underpin unity.
You want your strategic planning process to engage the entire business from awareness to compelled. From simply being ‘aware’ that it is that time of the year again when Directors and Senior Management head off on their annual retreat, to being excited about: and
- What the future holds;
- Their contribution to the forming of that future;
- Their part in delivering it, and
- Their belief that it is a future worthy of pursuit.
Rarely, if ever, do strategic planning processes seek to engage a business until after they are formulated, and the task of implementing is delegated.
Think of your strategy process as a progression in building commitment:
- Participation and contribution will lead your team from an awareness, through understanding to acceptance.
- From acceptance, unity can be built, actionability is firmly established and then your intent becomes compelling.
And no matter how simple, complex or challenging your strategy is or isn’t, the stronger the organisational commitment to delivery, the more likely its success.
Real and full commitment is not achieved through authority but through engagement allowing participation and contribution, and thereby underpinning ownership.
The tipping point is acceptance of the righteousness of the plans. Righteousness relates to the motive underpinning the strategy, and that motive must be to compete in delivering client value from which profitability will be gained and not simply a short-sighted profit-first plan.
Bear in mind that unity requires the entire business to be compelled, not just the Board and Management team.
I just wanted to close out this article with a brief comment on the popular expression ‘culture eats strategy for breakfast’, which I believe tends to degrade the importance of strategy.
Culture is only one element of the competitive engine that exists in every business and which sets the floor and ceiling of success and performance of a business; strategy is another element.
The culture that is seeded and permitted to flourish in a business should be an element of the strategy that the business intends pursuing. Culture is who the business must be to deliver on the strategy and culture must be crafted accordingly. Of course, if culture is simply permitted to be what it is, then strategy will likely be beating its head against the wall. Many leadership teams do struggle to get a handle on culture and this battle rests more in the aspects of leadership, purpose and motive.
Worthy leadership will set a righteous purpose and motive and uphold these elements of the competitive engine, and culture will then be moulded.
The elements of the competitive engine are purpose and motive, leadership, employee engagement, vision, culture, customer focus, capability, strategy, rewards and barriers. All elements impact performance but leadership is the seed element.
It is the season when many businesses will consider reviewing and revising their strategic plans. If this is you, pause and consider how you may use this process to draw in the knowledge and talent that resides in your business. And through this engagement, build a vision that everyone feels compelled to deliver. This is strategic planning at an entirely new level for many businesses, but it reflects the potential that exists within this process.
An entirely new level of performance.
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All the best in the success of your business,