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    You are here Home » strategy

    Leading Successfully… Start with the Right Strategy

    Last updated on May 2, 2013 by Dan McCarthy · This post may contain affiliate links

    Guest post by Jimmy Brown, Ph.D.

    Business leaders have a lot on their plate. There are
    administrative chores like budgeting and logistics.  There are people development tasks like
    encouraging, coaching, and what we’ll politely call correcting. Then there are
    the big picture and forward thinking undertakings that help set the vision and
    define the mission for the organization. The exact nomenclature for this last
    set of responsibilities can vary from organization to organization, but what we
    are talking about is finding the right strategy. 

    Finding the right strategy can be the difference between a leader’s
    success and failure.  Just look at Léo
    Apotheker’s brief tenure as CEO of Hewlett-Packard. He made several strategic
    missteps that not only led to his quick dismissal, but also drove value erosion
    and a loss of market position that the company is still trying to recover from.
    While the Apotheker example is one of the more recent, public, and dramatic, it
    is far from the only one. You can’t open up the business pages of any newspaper
    without reading about the negative impact of a leader’s poor strategic decision
    making. So why is this so hard?  Our research
    suggests that one of the drivers is that leaders are approaching strategy the
    wrong way. 

    Most leaders take one of three approaches. The first is to
    use what we’ll respectfully call intuitive
    synthesis
    . This is a fancy term for guess work and gut-feel. The second is
    to use intuitive synthesis, often augmented by a couple days of management
    meetings, to come up with three or four options. Then, the accounting
    department will run a bunch of financial models to figure out which option is
    the cheapest. The third approach is to use some established strategic planning
    model to come up with the options, run the financial models, and then pick
    whatever is cheapest. 

    This third approach is actually good progress towards better
    strategies because using a standard model helps leaders structure their
    thinking in a way that reduces the risk of overlooking important inputs. More
    importantly, if we consistently apply a standard model over several cycles, we
    can begin to see trends in the data. These trends can allow for even better decision
    making. The challenge with this approach, however, is that most of the standard
    models tend to only look at one domain (typically competitive data) and the
    analysis is still focused on whichever option is the cheapest. 

    Leaders in top performing organizations take a much more
    systemic and holistic approach to strategic decision making. In particular,
    they incorporate data from three specific domains: 
    ·       
    Capabilities – What we do well and how we can do
    it better

    ·       
    Customers – Who we serve, or who has a need we
    can meet

    ·       
    Competitive Environment – What inhibits our
    success. This includes both direct competitors (i.e., other organizations), and
    other indirect factors in the external environment 

    Armed with this full view of their ecosystem, leaders are
    now better equipped to decide how to best position their organizations for
    success. 

    Another important differentiator of top performing leaders is
    that they do not make decisions based solely on which option is the cheapest.
    They approach these decisions in terms of how much return they will get on the
    investment, not just the cost. More importantly, that investment decision is
    not purely financial. Top performing leaders also engage in a sense-making
    process that considers their Organizational
    Orientation
    , as well as their organization’s Process Preferences. 

    Organizational
    Orientation
    is about the mental models that people in the organization use
    to get their jobs done. Are they more longitudinally focused and stick to their
    guns despite changes in the market, or do they actively react to every change? Do
    they take their mission and vision into account for every decision, or are they
    more concerned with day-to-day numbers? This orientation is closely related to
    the culture, the brand, and the example set by the organization’s leaders. A
    strategy that is aligned with the organization’s orientation is much more
    likely to be embraced by the people who have to execute it. 

    Process Preference
    is about how the people in the organization choose to execute their tasks. Do
    they prefer a more centralized command and control structure, or allow each
    unit to operate more independently? Do new ideas only come from the top, or do
    they look for the field to come up with new solutions and bubble those up?
    Regardless of which approach a particular organization prefers, good leaders stay
    aware of those inclinations, incorporate them into their strategies, and then
    leverage those to maximize the efficiency of the implementation and
    execution.   

    To be honest, what was just described is an oversimplification
    of a very robust methodology. Each of the three data domains has several
    sub-levels of data that need to be collected to fully understand the
    organization’s ecosystem. The Organizational
    Orientation
    and Process Preference
    considerations are subsets of a larger sense-making process. It includes sorting
    through the mounds of data from the three domains to determine which particular
    data points need to be considered in each strategic cycle, and what kinds of
    analyses should be conducted. Starting at a high level like this is okay
    because good leaders know how to begin with the big picture, work with their
    teams to drill down to the details, and then make decisions based on complete
    information. And that is what strategy is all about. 

    About the author:
    Jimmy Brown, Ph.D. is the author of Systems
    Thinking Strategy: The New Way to Understand Your Business and Drive
    Performance
    . He is also the Strategy & Change Practice Area Lead at Beacon Associates where he is
    responsible for change management, organizational performance, and business strategy
    consulting engagements. In addition to his consulting work, he is a
    professional speaker and adjunct professor in graduate psychology and
    management programs. He can be reached at
    jbrown@beaconassociates.net.
    « Is it Time to Create your own Succession Plan?
    May 2013 Leadership Development Carnival »
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