Many businesses don't actually have a strategy. Yet in my experience, most CEO's think they do. How can this be?
Vision Vs. Strategy
In many cases, the disconnect occurs because the CEO is confusing something else for a strategy. One CEO I worked with had a clear vision for the future of his company -- what he wanted it to become and the ways in which it would serve customers once his vision was realized. But he had no plan to get there -- no strategy to specify how the company would depart from its current state and arrive at his envisioned destination.
He referred to his vision as "The Strategy," but since it wasn't actually that, his C-Suite leaders lacked a clear road map to guide their various teams. Progress toward his vision was haphazard and slow.
Vision defines your desired destination; strategy specifies the path you will take to get there.
Metric Myopia
Not that the company lacked for goals and metrics. This CEO believed in accountability, and instilled a performance culture in which each leader's objectives were specified quarterly by clearly defined targets and achievement milestones. Managers across the organization optimized the heck out of their metrics and ratios.
But to what end? Goals and initiatives abounded, and most of these objectives were good ones. But the company lacked a strategy to define how these all worked together to drive toward common outcomes. So each of the firm's leaders doggedly worked to hit their assigned numbers without regard for a bigger picture. A marching band with each player performing a different song, stepping to their own choreography.
The result? Cacophony.
Entrepreneurial Entropy
Even though everyone had their assigned areas of accountability, absent a strategy to force prioritization, the initiatives various executives pursued often competed with each other and certainly never added up to a coherent whole. Ideas and innovation were encouraged and projects proliferated, but without a purposeful forcing function to focus resources.
This teeming cauldron of objectives and metrics made for a dog's breakfast of a business. There were simply too many leaders pulling in too many entrepreneurial directions for it all to gel together. Employees suffered through organizational conflicts and as often as not saw their efforts (and the company's capital) go to waste.
Keeping You Clean
Consider this from Sergio Zyman, former CMO of the Coca-Cola Company:
"Strategies provide the gravitational pull that keeps you from popping off in a million directions."
"Your strategy is the one thing that will keep you clean. When in doubt, just check whatever you want to do against strategy.” -- Sergio Zyman
One of the most impactful benefits of having a true strategy is that it enables leaders to say "no" to diversions. To guide tough choices. To direct the entrepreneurial energies of the organization along a pathway to winning and avoid unproductive distractions and dead ends. As Zyman says, to "keep you clean."
A Sneak Preview
In a future post, I'll outline the necessary components of an actual, effective strategy. But here's a sneak preview of a few key questions to get you started:
What business are we in?
Which customers are we going to win?
How will we profitably beat the competition?
What resources will we need to execute?
How can we tilt the playing field in our favor?
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