10 Tests of Superior Strategy

Unless the implementers own the strategy, there is no chance they will implement it. It will remain a mere piece of paper. But how can the CEO involve all stakeholders without losing focus?

Most organizations have a strategy, but many strategies fail. Why? Because the people expected to implement the strategy have no stake in creating it, nor do they own it. When I walk into an organization and ask random employees what the strategic intent is, all too often I hear: "Uh... Hold on a minute... Let me just look in the files...."

If employees cannot readily and compellingly convey their organization's strategic intent (as for example Nokia employees can: "Put the Internet in everybody's pocket"), I am pretty sure that they don't own the strategy. It is sobering to see how frequently brilliant — and expensive — strategies end up either in the drawer of the executive suite or, worse, in the garbage bin, usually for three reasons: (a) top management has made the strategy behind closed doors in the boardroom; (b) strategy design is divorced from strategy implementation — the strategists and the implementers don't communicate; and as a result, (c) the strategy is too rigid for a constantly changing entrepreneurial landscape.





Traditional top-down approaches to planning still dominate our thinking and actions, but the world has moved on. Perhaps for the first time in human history, as leaders emerge in all walks of life, we can no longer manage in the mental models of command-and-control inherited from the industrial revolution and from military operations (not even the military can afford to do so). By turning the traditional sequence — planning followed by action — on its head, Strategy-In-Action has helped managers in a vast array of business and non-business organizations to tackle problems as complex as ending hunger in India, avoiding post-merger pains, transforming Haiti, or designing a new type of automobile plant.


In our work with Fortune 500 companies, SMEs, government and UN agencies over 25 years, my colleagues and I have found that the most effective strategies are shaped in an inclusive environment where people from all levels of the organization contribute to the design and take on leadership roles. It all begins with building a shared understanding of the current situation, the basis of any effective strategy. Without it, your team starts without the cohesion and focus it needs to get the job done. But all too often this crucial step is forgotten. Last week I coached the strategy process at a government agency. It was striking how senior managers had rushed ahead to set goals and make plans without taking the time to consider where they are now. The costs can be enormous — from wrong decisions to lack of alignment to wasted investments.


To reach a shared understanding, you need to involve important stakeholders from all parts of the organization. Stakeholders include not only top management, but also middle managers from key camps, selected front-line people, and perhaps even representatives of suppliers, shareholders, or key customers. The group must be small enough to be co-creative and effective, but large enough to include all relevant views. Those ignored by top management — for example likely dissenters, the receptionist or others who are often more in touch than senior managers with the end-users — are often the very people who should participate in the strategic analysis session. Everyone should begin by debriefing the previous year: What has been accomplished (and not accomplished) that you wanted? What has worked (and not worked)? What leaders have emerged, and what new opportunities? To maximize objectivity and prevent one side's views from dominating, an outside group should interview key participants beforehand and then write a background paper that serves as the foundation of the shared understanding. Then all stakeholders — usually 15 to 40 people — meet and create a common understanding of the current situation.


When my colleague Tapas K. Sen worked with AT&T on an initiative called Workplace of the Future, both union and management leaders spent several weeks informally discussing the business environment and competitive landscape. What competencies were missing for front-line employees, and what was blocking them from solving customer problems? Business unit managers began to understand that the union was committed not only to its members and their perks, but also to the professionalism of the entire workforce and to AT&T as a competitive business. The union-management contract was signed only after both parties agreed on all issues and on a shared strategy for addressing them.


If you want to build a shared understanding in a global organization, you needoutstanding cross-cultural skills. Nokia does it with the "Annual Nokia Way." Every year, managers in all Nokia offices around the world analyze the current situation in search of their strategy. They write up their findings and send them to the Finnish headquarters, where senior management integrates the strategic recommendations from around the world. Helsinki then sends the integrated strategy back to the offices around the globe. The Annual Nokia Way has created a company nimble and unified enough to become a dominant player and trendsetter in the rapidly evolving mobile phone market.


The meeting to create a shared understanding will likely bring up major differences; that is okay. On October 2, 1990 — Mahatma Gandhi's birthday — the planning commission of India, which is in charge of India's five-year-plans, and The Hunger Project held a meeting to create a strategy for the end of hunger in India. All relevant sectors were there to build a consensus. But there was a downside. Many participants had worked for thirty or forty years in isolation from one another. The government people in Delhi had made policy, thinking it would trickle down to the villages. NGOs had worked with the villagers and knew their concerns, but had had no access to the big picture. So the first thing these Indian leaders did was to express their profound frustration with each other. Mutual accusations raged. When government representatives spoke, they accused NGO-leaders of not seeing the big picture and not listening to the government. When NGO-leaders spoke, they accused the government of living in an ivory tower and ignoring daily reality in the villages. Was the meeting going to fail?


In this moment of near-despair, Ramkrishna Bajaj rose to speak. He was one of India's most senior industrialists, head of the Bajaj group of industries and a member of The Hunger Project's global board. Throughout the meeting, despite his stoic calm, Ramkrishna had grown increasingly restless. Now he raised his hand almost imperceptibly, in a typical self-effacing gesture, and rose slowly, as if he were tired. The room fell silent. Ramkrishna looked over all the participants through his big rectangular glasses. Then he began: "My friends, it is quite sad for me that we are here, the best minds of India, all of us dedicated to the spirit of Gandhi-ji, and yet we are bickering and accusing each other of malice. Please, my friends, let us not forget our common mission, the mission that my father financed, the mission that Gandhi-ji always pursued—to better the lives of the poorest." Ramkrishna reminded the participants that people all over the world were watching them, were committed to them, and were waiting to hear about their strategy for the end of hunger in India. "Do you know, my friends, that at this moment, while we are sitting here and debating each other, over six million people in 150 countries have joined the struggle to bring about the end of starvation? These people are committed, and they are watching us."


Suddenly the meeting began to work. Several speakers rose to acknowledge the leadership of Ramkrishna and his father. By the end of the day, delegates from various districts were huddling together excitedly to draft action plans. Seeing the bigger picture had awakened them from their narrow viewpoints and stubborn righteousness. Ramkrishna had shocked the meeting into consensus.


What made Ramkrishna's contribution effective was his ability to understand the common deeper aspirations of the group and to speak to them. In meetings to establish a shared understanding—as in all leadership—it all comes down to effective communication. As I describe in Communicate or Die, effective communication begins with listening. All participants must listen effectively and learn before jumping to conclusions, so that all parties can air their views to get the full picture. They must be honest, talk straight, stick to the facts, and avoid blame or justification or excuses, as I discussed in our last newsletter. They must be willing to trust the other participants. They must not make decisions until there is alignment. And they must be aware of their own biases and blind spots. In short, everyone must come to the meeting with an open mind.


All the best,

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10 tests of superior strategy
Matching the quality of strategy design with that of strategy implementation presents a formidable challenge to most organizations. Here are some questions that managers can ask as they mine for possible gaps in strategy implementation:

• Can employees decide quickly, and on their own, which opportunities are (or are not) directly on the organization's purpose-line?
• Do managers know what threats might lead to the failure of the organization?
• Are vision and the big picture present in day-to-day action?
• Are day-to-day actions correlated to the vision and the big picture?
• Do people experience the future as a personal, compelling opportunity?
• Can top and middle managers readily remember the organization's status in all key performance indicators?
• Do employees watch and track the same indicators as their superiors do?
• Are project teams and divisions transparent (rather than ridden by turf wars and power plays) so that all one sees is their actions and results?
• Do participants at meetings offer ideas freely? And do they get support for them?
• Do promises and requests (not opinions, excuses, complaints or blame) dominate meetings?