#3 — A Healthy Organization Has A Clear, Challenging Organizational Strategy – – (12 Vital Signs Of Organizational Health)

(Note:  I started this back before vacation.  I’m returning to the series today.  Sorry for the delay).

In my introductory post, 12 Vital signs of Organizational Health, I listed the 12 signs.  Here is sign #3:

A healthy organization has a clear, challenging organizational strategy.

Back in my graduate school days, I remember the day that my professor, a quite-noted professor (Dr. Walter Fisher at the University of Southern California) took us on a multi-century journey of answers to this question:  “What is the meaning of rhetoric?”  At the end of the journey, I was utterly confused.  I had no idea what the “correct” definition of rhetoric was.  It always kept changing.  (By the way, the definition I now use, which is pretty much from Aristotle, with one slight adjustment, is this one:  “Rhetoric is the art of finding the available means of persuasion.”).

Well, if a top-notch professor in some revered business school took his or her students on a similar journey to give an answer to this question, “What is the meaning of strategy?,”  I suspect that many students would likewise feel a little confused.  It is a tough idea/word/concept to define.

From Richard Rumelt, Good Strategy, Bad Strategy — The Difference and Why It Matters:

…for Rumelt, strategy is no more – or less – than structured, intelligent thinking about business. Developing and implementing a strategy is the central task of a leader…

Mr. Rumelt put plenty of emphasis on “diagnosis” as part of the strategic process.

From Verne Harnish (Mastering the Rockefeller Habits):

You don’t have a real strategy if it doesn’t pass these two tests: that what you’re planning to do really matters to your existing and potential customers; and second, it differentiates you from your competition.

Mr. Harnish used to lead folks through a “Strategic Planning” process.  Now he says that this needs to be divided into a two-part process:  “Strategic Thinking” followed by “Execution Planning.”

From Michael Porter (kind of the long-standing guru on strategy – you might want to take a look at his “What is Strategy?”), who points out a clear difference between “Operational Effectiveness” contrasted with “Strategic Positioning”:

Operational effectiveness (OE) means performing similar activities better than rivals perform them. Operational effectiveness includes but is not limited to efficiency. It refers to any number of practices that allow a company to better utilize its inputs by, for example, reducing defects in products or developing better products faster. In contrast, strategic positioning means performing different activities from rivals’ or performing similar activities in different ways. (emphasis added).

From Roger Martin, from his article Don’t Let Strategy Become Planning:

To make strategy more interesting — and different from a budget — we need to break free of this obsession with planning. Strategy is not planning — it is the making of an integrated set of choices that collectively position the firm in its industry so as to create sustainable advantage relative to competition and deliver superior financial returns.

Mr. Martin recommends answering these five questions:  what is our winning aspiration; where will we play; how will we win; what capabilities need to be in place; and what management systems must be instituted? (The five questions can easily be answered on one page).

So, what is strategy?  Years ago, I read a poem.  I have searched, and cannot find the author, or the full poem (any readers able to help?), but it ended this way:

To rise from a zero to big campus hero
3 questions to answer I’ve strived
Where am I going?
How will I get there?
When will I know I’ve arrived?

It is the “Where am I going?” line that addresses the “what is strategy?” question.

It may be easier to say what strategy is not than to say what it is.  Again, from Richard Rumelt:

The four major hallmarks of bad strategy:

1. Fluff – “a form of gibberish masquerading as strategic concepts or arguments.”
• Simply being ambitious is not a strategy.
2. Failure to face the challenge.
3. Mistaking goals for strategy. (statements of desire ≠ strategy).
4. Bad strategic objectives.
• (bad because they “fail to address critical issues, or they are impracticable.” – {impracticable – Impossible to do or carry out}).

Recently, a friend of mine told me about a book that I have missed — Focus:  The Future of Your Company Depends on It by Al Ries.  (Not available on Kindle – I’ve ordered the physical book).  I think my friend put it this way:  organizations are always losing focus.  Keeping/maintaining focus is the difference between success and failure.

In other words, what is your strategy, and what will you do to keep your focus on it?

Now, a strategy may be a cousin to vision, and related to goals.  But whatever strategy is, it is “overall, overarching,” and it sets a very clear direction for all in the organization.  The leadership team has to be absolutely! on the same page! on just what the strategy is.  If not, everything will be in jeopardy.

Where are we going?  This is where we are going!  Can your leadership team answer that question, with every member of the team on the same page?  If not, you’ve got your work cut out for you.

——————–

If you are not sure just what your strategy is, it may be time to tackle this question very intentionally/directly.  You can jump start this conversation by bringing me in for a session on strategy.  I will present my synopses of Good Strategy Bad Strategy by Richard Rumelt, and Mastering the Rockefeller Habits by Verne Harnish.  I suspect, after reading Focus, that I will pull in a little from that book also.  Then, follow this up with a good “strategy doctor,” a top-notch consultant.   We’ve got a couple who know how to do this well who attend the First Friday Book Synopsis in Dallas.  Send me an e-mail, and let’s start a conversation.

You can purchase my synopses of Good Strategy Bad Strategy, and Mastering the Rockefeller Habits, with my multi-page comprehensive handouts and the audio of my presentations from the First Friday Book Synopsis, at our companion web site, 15minutebusinessbooks.com.