Just a Simple Strategy

Dispense with collecting pretty binders (and dust) on a shelf

Published: Monday, March 17, 2014 - 09:06

I remember two decades ago when I was in my first real executive role, and I was asked to come up with a strategy for my business unit. I was in control and I could develop and set a direction! I could finally use some of what I had learned in those traditional business school courses and seminars.

Analysis methods SWOT, PEST, Porter five forces, and the like were created and used. Assessments performed, gaps identified, and, finally, strategies created. A plan for technologies, markets, people, and quality was developed, with detailed action plans for each. It took up a binder, a very nice-looking binder that was duplicated and presented to my management team. We all dutifully looked in awe at what we had created—and proceeded to put it on a shelf. I bet some are still on those same shelves, even if the date reads 1995. And then we went back into the business of firefighting the day-to-day issues.

Why? For starters the plan was too long, by about a factor of 20. Did we really think we’d refer back to it on an ongoing basis? And just as with traditional budgeting, the vast majority of the plan was obsolete within a couple of months. The exercise of multifaceted self-analysis was valuable—the first time. But it was a point in time.

You’d think I would have learned my lesson, but I didn’t. I went through that same exercise a couple more times in different, larger organizations. More pretty binders sitting on shelves. One of the last plans was even in hoshin style with long-term strategies tied to intermediate-term objectives, which were then tied to annual goals—just a whole long list of them.

And that was the problem: The desire for detail, specificity, depth, and breadth that created abundance and complexity. We realized this issue when we became fairly good with hansei, a quarterly reflection on our performance that we happened to have at a local winery. Luckily we had a scribe to record our brilliant “ahas!” before the wine erased them from our memories.

We took a step back and looked at ourselves again. We reduced our long-term strategies to three, tied to a similar number of intermediate-term objectives, tied to about five annual goals. That was it for a fairly large multisite operation. We allowed the hoshin plan to evolve and change throughout the year as situations changed—similar to how some enlightened companies have dispensed with the annual budgeting process to use rolling and ongoing financial decision making. We mapped all existing activities against that plan, and killed or put on hold projects that weren’t aligned.

That’s when real forward progress began to happen. And it was amazing how much time we freed up by not working on supposedly worthy projects that were not aligned with the strategy.

When I go into organizations I often see similar binders on shelves, almost always gathering dust. I counsel the executives to try it again, this time dramatically reducing the length, and creating an ongoing hansei process. It seems to work well.

Earlier this month Nick Tasler wrote a piece for Harvard Business Review (HBR) titled “It’s Time to Put Your Strategy on a Diet,” where he drew several parallels between strategic planning and eating—and dieting. Limit your plate size by reducing the number of priorities. Let them eat cake tomorrow by putting off (but not forgetting about) great ideas that don’t happen to align with the strategy. Avoid the “what the hell” effect through strict adherence to the strategy. And surround yourself with healthy eaters who are skilled at leading.

That last point relates to creating a culture where leadership can thrive. Leadership by smart, thinking leaders, not by control. Similar to what I mentioned a few weeks ago when I told you about how Netflix hires great thinking leaders, then sets very few rules. It’s also what Peter Drucker meant when he said, “Culture eats strategy for breakfast,” which Mark Fields of Ford embraced a few years later.

But another article in HBR by Allesandro Di Fiore may take the concept of strategy brevity a little too much to the extreme. In “The Art of Crafting a 15-Word Strategy Statement,” he suggests just that: 15 words. Really? Although you wouldn’t know it from this article, and colleagues who interact with me via email would laugh, I happen to be fond of the five sentences concept. Fond of it, but completely ineffectual at implementing it.

A 15-word strategy statement? He gives a few examples, such as IKEA, and it could be a good exercise as part of the strategy development process. I’m a little skeptical of it, though, for the same reason that in my last couple of positions I’ve purposely not wasted time on mission and vision statements. They are either so broad as to be meaningless, or so narrow that they are constraining, and in almost all cases they end up on a wall in the corner of a conference room. Often next to the shelf holding a thick binder labeled “strategic plan.” Be honest: The real mission of a company is to create money for the shareholders, and the vision is a lot of money. Instead, we created a short statement of principles, which guided our organization, and that was more than sufficient.

So as you look up from reading this article and perhaps notice your own binder on a shelf, think about taking another stab at it. Narrow it down. Very concisely, what are the three (at most four) long-term strategies that your organization needs to be focused on? What three or four measurable objectives must happen in the intermediate three- to five-year time frame for that to happen? What four or five projects must be accomplished this year to enable that? Then, perhaps most important, what is your organization working on right now that doesn’t align with that plan? Stop it. Formally reflect on that strategic plan at least once a quarter, with your team. Adjust and evolve—don’t just set it in stone once a year.

You’ll soon be amazed at how much you can accomplish.

First published Feb. 16, 2014, on Evolving Excellence.

About The Author

Kevin Meyer

Kevin Meyer has more than 25 years of executive leadership experience, primarily in the medical device industry, and has been active in lean manufacturing for more than 20 years serving as director and manager in operations and advanced engineering, and as CEO of a medical device manufacturing company. He consults and speaks at lean events; operates the online knowledgebase, Lean CEO, and the lean training portal, Lean Presentations; and is a partner in GembaAcademy.com, which provides lean training to more than 5,000 companies. Meyer is co-author of Evolving Excellence–Thoughts on Lean Enterprise Leadership (iUniverse Inc., 2007) and writes weekly on a blog of the same name.