If strategy tools and frameworks were applying for the job of directing us towards meaningful, sustainable organisational strategies, would we give them the job? I don’t think so, and here’s why:
- There is not much compelling evidence that directly correlates their use with organisational success
- Strategy tools are too often used as a tick-box exercise – a way of showing that we have ‘done the strategy’ so we feel better about ourselves
- Moreover, ‘doing strategy’ with strategy tools and frameworks can mean that strategy is the preserve of a small team sitting behind closed doors (darkened room optional!) without including the wider staff who will have significant insights to share and who will have to deliver them
- Many of the more commonly known tools are used inappropriately. Two examples of this that are based on personal experience are: executives trying to steer a multimillion-pound organisation to success with only a SWOT in their back pocket and teams blindly applying Porter’s 5-forces framework but not appreciating it has lost its relevance in our new, digital and global economy
- The customer is missing! Many of the commonly used strategy frameworks and tools are very organisationally centric, or ‘inside-out’. Today, organisations exist only to innovate and to deliver better value for customers, so surely any strategy tools that we use should help us to understand our customers’ needs and to develop better relationships with them
A relevant and interesting discussion in a recent McKinsey’s Quarterly publication titled “What Strategists Need: A meeting of the minds” (September, 2014), is congruent with some of my thinking. The article reflects the discussion between 15 strategy experts and thought-leaders across academia and industry on whether tools are useful in creating winning strategies. If tools are going to be helpful in creating strategies then, as one participant notes, they must help us in “…stimulating the creation of options, particularly where change is occurring rapidly and the scope for strategic action is shifting”. Strategy is about accurately diagnosing what is wrong, making some tough decisions to do this and not that, and then directing resources and capabilities towards solving that problem, and in so doing maintain competitive advantage. Insight generation is an important part of strategy development and this seems to be where tools are now most needed and wanted, but none exist. This was borne out by one of the participants in the discussion who said “…we don’t pay enough attention to the difference between strategy as resource allocation and strategy as insight generation. …we also need to take a fresh look at how we identify ways to improve a firm’s positioning and performance, by explicitly asking, “What insight-generating activities, tools, and frameworks would be useful?”. Our friends who work in the field of innovation theory could perhaps help us out here? The article summarises the situation in which we find ourselves as “…a field in flux, with enormous opportunities to generate fresh insights in a changing world”.
So, are we then totally lost if we fire strategy tools from the Boardroom? Well, no, because we can still craft winning strategies without tools and one way of doing this is by redirecting valuable resources towards getting our staff more engaged and involved. This engagement and involvement is not just about better communication with them but rather about actively listening to them and encouraging their involvement in solving the strategy problems faced by the organisation. This is powerful stuff and there is a strong correlation between staff engagement and business performance to support our actions.
A HBR Analytic Services research report (Sept 2013) noted that: “Employee engagement has become a top business priority for senior executives. In this rapid cycle economy, business leaders know that having a high-performing workforce is essential for growth and survival. They recognize that a highly engaged workforce can increase innovation, productivity, and bottom-line performance while reducing costs related to hiring and retention in highly competitive talent markets”. Steve Jobs was also noted to say “It’s not the tools that you have faith in – tools are just tools. They work, or they don’t work. It’s people you have faith in or not” and while he was not specifically talking about strategy tools here, this statement reminds us again that it is the people who make organisations function.
There is an even greater call for managers and clinical leaders in the NHS to do more to keep their staff engaged, motivated and involved given the results of a recent survey on staff wellbeing in the public and voluntary sector. It found that NHS staff are the most stressed in the public sector. That’s no surprise given the ‘expectations from government, management and patients against a backdrop of money saving, job freezes and continual undermining by the media’, as one physiotherapist put it. The point here is that “happy staff = happy patients”, always. If this equation is balanced then we get better performing organisations and, I would argue, increased agility and adaptability in responding to uncertainty.
Thanks for reading this post. I’d be interested in any views or discussion that it might have stimulated. This has been ‘Away from the Heard’: The Saffron Steer blog.