The job of developing strategy gets passed around like a hot potato. Too often the job of developing and implementing the organizational strategy gets handed off from the leader to a member of the management team. The thinking behind this is that the leader is too busy, travels too much, or is not a “detail person." In his book, Good Strategy Bad Strategy, Richard Rumelt argues that setting organizational strategy is the central task of a leader. All members of the leadership team will participate in that process, but the leader is the person leading this charge. The leader brings not only her vision to the exercise, but also a level of priority, intention and involvement. This focus highlights the importance of strategy to the organization and helps bring the rest of the organization along in the process.
It’s enough if everyone leaves with a warm feeling. Actually – it’s not. Richard Rumelt gives many examples of organizations that confuse buzzwords, team building exercises and motivational slogans with strategy. These can be helpful tools in explaining the strategy and building agreement, consensus, and alignment, but they are not in and of themselves a strategy. Developing a strategy should actually be an uncomfortable exercise. In a well developed strategy, an organization grapples with the things that are standing in the way of achieving its goals and honestly assesses its ability to overcome these challenges. That level of insight often produces the opposite of a warm feeling for those participating in the exercise.
The strategy is vague and immeasurable and only describes some future state. A good strategy is a concrete and deliberate response to—and approach for overcoming—the obstacles to progress. There is no other way to move the organization forward. This level of specificity, coupled with short and long-term objectives is the most effect way to leverage skills, expertise, market advantage, and changing market dynamics to accomplish organizational goals. A common misstep is for organizations to set a lofty three to five year strategy without developing the near-terms steps needed to get there. Or, the organization is very focused on yearly financial metrics or product/service offerings with no view about how these objectives impact their long-term strategy. It’s tough – but you must do both.
Leaders get tricked into thinking they are setting strategy.
In his book, Good Strategy Bad Strategy, Richard Rumelt illustrates how organizations fail to develop a strategy. Instead, they develop visions for the organization, i.e., We will have world class product development, or We focus on customer-centric service. Companies with a focus on growth will mistake financial goals for strategy – We will grow to $30 million in the next three years. In some organizations, strategy is simply a collection of individual business unit goals – some of which are conflicting. At the heart of good strategy, there is a realization that the organization understands the challenges to its business. Once this insight occurs, the organization can create a road map to overcome the challenges and the action steps to execute.
