Do you communicate your strategy powerfully to the front line?

To attract the attention of the front-line to the strategy, the CEO can tell simple emotional stories

All the recent psychological research points the same way. People deliver what they focus on. So one of the key challenges to the CEO is to communicate their strategy in ways that repeatedly draw the focus of everyone in the organisation. The same psychological research also indicates how to achieve this. Messages stick when they are simple, emotional stories about real people, illustrating how the strategy will guide the millions of small decisions employees make every day.

For example, the Fedex strategy is built upon their Unique Selling Point of “absolute, positive reliability”. One story to bring this alive for the front line is of a Fedex driver who left his key to open a collection box back at the depot, who then undid the bolts that attach the box to the ground with his spanner and lifted the whole box into his truck to make sure the packages made the flight. This story makes the unreasonable commitment required to deliver “absolute positive reliability” come alive.

The old stories are deeply embedded in the culture of the organisation. The stories that illustrate your future strategy will need an unreasonable level of repetition and reinforcement to stick.

What are the stories you are telling to attract the focus of, and therefore the results of, your organisation?

Do we need to be a learning organisation?

As your industry changes faster and faster, your organisation’s learning ability determines whether you thrive or head for extinction.

The analogy between business and the theory of evolution is very useful. A key concept in evolution is a species “fit”. This describes how well adapted the species is to its environment, and has a direct parallel with an organisation’s position in its industry.

The concept of a learning organisation looks beyond the static snapshot of today’s “fitness” to a dynamic picture of how fast the company can evolve. The key strategic indicator is the speed your company can change, relative to the speed the environment changes. Even if you missed some trends, you can recover if you can change faster than the environment is evolving. On the other hand, if the industry change will outpace you, you are doomed to extinction however strong your starting position. As Jack Welch put it, “When the rate of change outside exceeds the rate of change inside, the end is in sight.”

It is no accident that today’s most dynamic learning organisations are forged in the maelstrom of the hi-tech industry, where the rules of a whole industry can turn upside down within a year.

The challenge for the rest of us is how to adopt the best aspects of their learning cultures, since today the rate of change is accelerating in every industry.

Are you stubborn or determined?

A leader can be committed to their organisations strategy and ambition, while remaining flexible about how to get there.

It is amazing how quickly journalists change their tune. When things are going well, the leader is committed, determined and persistent. Hit a sticky patch and the same leader becomes stubborn and inflexible, exhibiting tunnel vision.

How can a CEO be committed and flexible at the same time? Change requires overcoming barriers, without forever butting heads against a brick wall.

The answer lies in clearly separating ends and means.

Dominating a specific customer segment, or achieving the lowest cost position in the industry are ends. The Leader has a key role to play in achieving these strategic positions through their unrelenting determination. They project total confidence that they will be achieved, setting high standards and asking the unreasonable to challenge their organisation.

The same leader can be fully flexible about how to get there however. There is no need to spend your credibility by committing to any one particular approach, since you can’t be sure it will work. Maintain the pressure through total commitment to the end, and allow your team to innovate to get there.

Are your people’s concerns linked to your organisation’s concerns?

Your peoples’ passion will be unleashed if they see how the organisation’s concerns are the same as their own personal concerns.

Every individual has a few fundamental concerns that drive them throughout their lives. They will be different for everybody. Examples could be love and family, making a difference, self-expression or contribution to others.

Whenever I am blocked and resist something I should do, it is because I cannot link this activity with my fundamental concerns. When I resist spending time on personal finance and label it a “chore”, it is because I have temporarily lost the connection between doing this and looking after my family. With the link clear, I can do exactly the same activity with a real feeling of achievement and choice.

The same is true for people at work. Have you at any point in your life ever experienced the difference between working for a salary and working to further one of your fundamental concerns? What did it feel like? That was when words like “work” and “employee” ceased to have meaning, and your passion was engaged. Imagine the strength of an organisation that taps into that passion for all its people on a regular basis.

Unrealistic? What it takes is the commitment to find the right place for everyone. Salespeople with a fundamental concern with accomplishment. Service staff with a fundamental desire to help others. Accountants who live for the perfect moment when the numbers balance. Leaders who personally share the vision of the organisation. And every day, they will love what they do.

Separate strategic initiatives from normal P&Ls

Ringfence the budget and people of your strategic initiatives and watch progress against time closely

Frequently strategic initiatives don’t get budgeted. Why? Does everyone think they have no cost or they earn their way immediately? Are they designed as a stretch challenge for management, pulling epeople, budget and resources from elsewhere?

Not carving out specific resources and budgets will set these initiatives up for failure. Most organisations have a natural gravitational pull towards maximising today’s P&L, rather than tomorrow’s strategic position. Leaving the resources mixed will push this trade-off lower in the organisation, where the pressure is less likely to be resisted and the long term strategic benefits less visible. Most middle managers will buckle under this pressure and keep their best people focused on the P&L, holding back the initiative as “discretionary spending” to mitigate a potential shortfall later.

Strategic Initiatives obey project principles, not operating principles. The critical metric is progress against time, not impact on quarterly profit. The reward from bringing results forward will dwarf higher quarterly costs if it truly is a priority strategic initiative.

It will ensure that any trade-offs between the P&L and the strategic initiatives are made at your level if you ensure full dedicated resources are allocated up-front, even if it generates a little extra work for the accountants at budgeting time.

What immediate action will create your inspiring future?

When you communicate your strategy, lavish attention on the inspiring future and the immediate action required to create it.

The power of the organisation is unleashed when people can connect the motivation of the inspiring future with the immediate action that has to be taken NOW to get there. The strategy will have no power to pull forwards any employee who cannot make this link.

It is fine to leave the intervening steps sketchy. The CEO does not need to lay out all the details about how to execute the strategy. For one thing, the CEO does not have all the answers! Secondly, the rest of the organisation will feel real ownership of the strategy if they fill out the blanks themselves.

The CEO’s attention can therefore be placed on painting the vivid and inspiring future, and at the same time ensuring that there is total clarity about the specific measurable results that have to be achieved now to make it possible.

This creative tension can be maintained as results are delivered, with the CEO continually focusing attention on the action and results that point the direction towards the strategy.

Your people will always have clarity about how the results they are achieving contribute to creating an inspiring future.

What trade-offs are you building into your strategy?

Understanding the nature of the trade-offs in your market will illuminate the strategic choices you are making.

A trade-off exists where getting better at one thing means getting worse at another. These trade-offs exist at three levels – product, brand and corporate trade-offs.

Trade-offs are easiest to spot at the product level. If you want more battery life, you have to make the mobile phone heavier. Yes, improvements in technology will continuously push back the boundary, but the fundamental trade-off will always be there. When one product does different jobs for different customers, some features will be over-or under-served for each customer. Do you focus on one job or live with the compromise?

Even if you design different products to perfectly match these different jobs, another trade-off is created if you put them under the same brand. The trade-off is the loss of clarity for customers if one brand does multiple different jobs for them.

Separate products and separate brands can overcome these limitations. Then, the strategic trade-off happens at the corporate level. Your whole organisation is perfectly aligned to deliver a specific value proposition. Any change to the organisation to deliver a different value proposition at the same time will make it worse at the original. For example, the same organisation will find it hard to be competitive at high value branded innovation and low cost commodity product at the same time.

Trade-offs are at the heart of strategic choice. Understand them explicitly will tell you how far you can stretch your business.

Who is responsible for your strategic initiatives?

Put your best people on rolling out your strategic initiatives to the whole organisation – it will be easier to backfill the business as usual jobs

Your strategic initiatives will always be core to your organisation – that is in areas which contribute directly to your competitive advantage. Initially though, they will not be mission critical, and you can safely leave them in the hands of your innovators and experimenters.

The tough decision comes when the pilots have worked and they are ready for prime time rollout. Driving the roll-out requires different skills, although the innovators can have a supporting role. This is when your best people will be required – those who can take an innovation and deploy it across the mainstream organisation while managing the implementation risks.

The challenge is that there are never enough of these reliable commercialisers, and they will already be doing an important job in the mainstream organisation. The courage to redeploy them comes from your confidence that the strategic initiatives you have chosen are truly the highest stakes game in the organisation. Successful rollout will generate competitive advantage, with a substantial downside if the implementation disrupts business.

Put your best people on them! Their current role will always be less valuable and easier to substitute than rolling out a key initiative.

Is your strategy unreasonable?

If your strategy aims boldly for the unreasonable, you have more chance to deliver a reasonable change.

What achievements were the most fulfilling for you? Chances are they are when you achieved something that you thought was impossible. Even very high achievement means little when it is requires no personal stretch.

The same is true for companies. The seminal moments in the history of a company are when they faced up to and achieved the unreasonable. The regular delivery of good, but predictable results generates little emotion and releases little energy.

Unreasonable objectives raise the standards in an organisation. And the “Pygmalion Principle” shows that when high standards are set, people perform better to live up to them.

Another factor working against reasonable goals is entropy. The law of entropy in physics states that in any natural process there exists an inherent tendency towards the dissipation of energy. There is an exact parallel in organisations. Any strategy that you lay out will get diluted as it percolates down the organisation and over time – it will never get amplified. The inertia of the company will dissipate the energy and focus you started out with, pulling back towards the status quo.

If your strategy aims well above what the organisation thinks is reasonable, there is a chance that, after the effects of entropy, there is sufficient energy to deliver the change required.

How can your corporate reputation make strategy execution easier?

Your corporate reputation is the first thing that impacts execution of your strategy

Let’s be clear what we mean by your corporate reputation. We are not talking about designing corporate logos and slogans, but the more important question of what do your customers, competitors and partners think about your company.

Why does this matter? Because what they think about you determines what is possible for your company right now.

If customers know you as a product company, you will have a hard time selling them a solution.

If three different companies made the same market entry move, the incumbent may regard one as harmless, another as too strong to counter, and a third as requiring immediate aggressive action to block. It is the different competitive reputations that determine the different reactions.

Before you even get to the negotiating table, your reputation will have got there first. It impacts potential partners and colours their reaction to any deal you propose.

How can you cultivate a reputation to make executing your strategy easier? There are no short cuts – it takes consistent, persistent action, aligned to the reputation you want. Show customers results generated by your strategy. Train your competitors through repeated action/reaction cycles. Avoid any inconsistent action. The impact can be enhanced by consistent and ongoing communication, but words will make no difference on their own.