- “My team does all the crap. I concentrate on the strategic stuff”
- “I’m appointing a COO so that I can concentrate on the strategic stuff”
- ‘Frankly, he/she is rubbish at the strategic stuff. Will never make CEO”
The reason that’s there’s so much management guff about strategy is to conceal how difficult it is. It’s difficult because it has to be simple to succeed. And simple strategies are awesomely difficult to conceive and implement.
One of the best examples of a simple strategy was Ryanair’s start-up strategy:
- to irritate as many customers a possible so that all they expected was a cheap and safe flight
This strategy looks obvious with hindsight. But remember there was a time when, mirabile dictu, British Airways was “the world’s greatest airline” and only “posh people” flew in planes.
They expected five-star treatment and paid five-star prices. Michael O’Leary – and others – decided that air travel could be democratised. And with the help of enabling technology – the internet – they did. BA almost collapsed.
When I work with main and operating boards I am frequently gobsmacked – a technical term in board facilitation – by directors using the word “strategy” instead of “plan” as in:
- “we’ve done loads of work on our strategy and produced a 30-slide deck”.
When I say to them that they must be able to summarise their shared – and it must be shared – strategy in one line and that their 30-slide deck maybe their plan, not their strategy they always look discombobulated.
It’s impossible to have a shared strategy without a shared purpose. Many boards lack a shared purpose. Ergo their strategies are weak.
In 1996 Michael Porter, regarded as the leading strategy guru, wrote a long article: “What Is Strategy?”.
It should be prescribed reading for all main and operating board members, even if they read only his key three principles that strategy:
- “…is the creation of a unique and valuable position…serving [needs]…
- “…requires you to make trade-offs in competing – to choose what not to do [his italics]
- “…involves creating “fit” among a company’s activities…”
He refers to serving “few needs of many customers…broad needs of few customers…and broad needs of many customers”. That’s enough to make heads hurt on boards.
But it’s the rigour that goes into creating a high-quality conversation around the board table, where no one voice dominates, that enables better decisions on strategy.
Frequently, your CEO – usually the strongest voice in the room – will dominate conversations on strategy. Other board members, often with great ideas, will hold back afraid of challenging the CEO.
Some of the best strategy conversations are held in pubs after the strategy board meetings are over when it’s too late.
How many times have you witnessed a “crap strategy” driven through by a “weak and tin-eared CEO” who listens to no one only to find that he/she was plain wrong?
Even “strong” leaders, like former Prime Minister Tony Blair, make serious errors in strategy by not following good governance in decision-making as pointed out in The Chilcot Report into the Iraq invasion in which he was criticised for what became known as his “sofa-style” decision-making.
Ideally, directors should be made to sit an exam on Porter’s article and to sign a solemn pledge never to use the term “strategic stuff”.
In small change terms your main and operating board might consider:
- acknowledging that everyone should and must be allowed to contribute to strategy formulation so that it’s shared
- that it’s impossible to agree on your strategy without having a shared purpose
- that a strategy is not a plan. That comes after you agree on your shared strategy
Can each member of your board articulate exactly the same purpose and strategy?
If not, why not?