Strategy Is a Daily Practice

Every year, executives gather in boardrooms to fill whiteboards with sticky notes, drafting ‘The Strategic Plan’ that will take the company to the next level. 

Inevitably, The Strategic Plan gets tucked away to collect dust until next year’s retreat. Meanwhile, the market moves, a new technology comes forward, or a competitor enters the conversation. 

Most strategies don’t fail in the boardroom. They fail on Monday morning. Strategy isn’t a document. It’s a leadership practice and if your strategy doesn’t show up in everyday decisions, it isn’t going to guide anything.

The Strategy vs. Planning Trap 

One of the most common mistakes leaders make is confusing a business plan with a strategy. A business plan is important, and you should have one. However, business plans make assumptions about revenue and focus on how to spend money. Business planning is very comfortable because managers control costs making it easier to talk about spending. A strategy, on the other hand, is a much less controlled theory on how you can get there. 

“They are two sides of the same coin, but those that feel because they have a business plan, they have a strategy are much more susceptible to disruption and competition.”

There are three key strategy elements to consider: 

• Where do you want to compete? What are our product offerings, geography / region, inputs or distribution along the supply chain?
• How do you win? Why should customers buy from us? What is our competitive advantage? How do we attract customers?
• What does winning look like? What is your strategic objective in 3-5 years? 

The Goldilocks Pace of Change

A 50-year study of Fortune 100 firms showed that 70% of their challenges — or growth stalls — were due to a failed strategy. The top two reasons? The company either moved too fast, putting them ahead of their market, or the company was too slow and didn’t respond to market changes. Unfortunately, there isn’t a scoresheet that tells you when to make a shift. It comes down to judgement based on good strategy.

“You must be flexible but stay firm in your direction. It’s a reason why companies will focus on business planning alone, because they feel more in control. If the revenue does not come in, you can always blame an external factor.”

Companies can approach their strategy with ‘strategic options’ that allocate a certain percentage of earnings to trying new things or for responding to potential disruptions. It allows you to keep focused on what is working, while also having a stake in what might be the next big opportunity.

Moving from Checkbox to Living Strategy

Keeping a strategy alive means moving it from the boardroom into the hands of employees. And this requires our friends in the comms department to help. Leaders must be prepared to communicate the strategy —  when you think you’ve overcommunicated, communicate some more. 

“Use the rule of three. Identify what the strategy is with three pillars and do it over and over again. Your message has to be very crisp and clear.”

Leaders should balance the functional elements with an emotional “rallying cry” that gives the team something to get behind and activate. Strategies need strong KPIs or OKRs to measure quarterly or annually, so the team and individuals can see how they are contributing to fulfilling the strategy in their work. 

Bridging the Middle Management Gap

The middle often gets blamed for strategy hold-ups, but it can be the result of micromanagement by leadership. Leaders have a duty to provide absolute clarity on the strategy but give their teams the freedom to decide how to get it done. 

As a leader, be open to feedback, run genuine town halls where you don’t talk much and you spend most of your time listening. Ask your team: what are the ways we can get where we need to go? Great leaders tap into the brainpower of the whole organization. 

“When I was Dean, I started out being more directive than I am comfortable with to make clear where we were going. By the last four years, I was termed as the ‘Yes Dean’, because virtually every idea brought forward was going to advance the strategy. The team knew where we were going and how best to get there – the leader (at this point) looks for new opportunities and gets out of the way of managers who are best able to fulfill the strategy.”

Conclusion

It’s critical to be nimble and agile in business today. Effective strategy gives you the clear direction to compete — and win. 

A simple test for leaders: did the last business decision you made clearly align with your strategy?  If not, we should talk.