Acting Strategically and Taking Strategic Action (cont)
In this series of articles on Strategic Leadership, I have discussed strategic leadership in general and have also explored the nature of strategic thinking. I began the discussion on Strategic Acting by considering how we might more effectively reward appropriate risk-taking, and followed it up with a discussion on how we might make strategy a learning process. In this article, we will explore Strategic Acting further by considering how we might act with both the short-term and the long-term in mind.
It has been said that anyone can think and act with the long-term in mind, OR focus on the short-term imperatives, but it takes a special talent to be able to manage the tension between the two effectively. In fact, Jack Welch puts it best: “I always thought any fool could do one or the other. Squeezing costs out at the expense of the future could deliver a quarter, a year, maybe even two years, and it’s not hard to do. Dreaming about the future and not delivering in the short term is the easiest of all. The test of a leader is balancing the two.” All too often the focus of our energy is on the short-term performance markers – because those are the ones on which our performance is measured! And what gets measured is where the energy will be spent.
The key to enabling oneself and one’s people to manage the tension between the two is strategic clarity and focus. The strategy needs to clarify not only what we will do, but also what we will not do – to ensure that activities that address short-term imperatives do not cost us the long-term successes we seek. Only when we are absolutely clear on what we will do and what we won’t do can we bear the “stress” of those activities that only pay off in the longer term while having no short-term impact.
If we are clear on what not to do, we can easily make decisions about things we should not be getting into in the first place, as well as making decisions about things we should be getting out of. This tells us what investments we should be making, and which ones we should not be making – or pulling.
Acting with the short-term and the long-term in mind also enables us to make decisions about the assets that need to be preserved – this could include a really strong brand, product lines that are young and promising in terms of their life-cycle, or competencies that set you apart from your competitors. This makes it all the more important that we measure not only short-term operational results, but also strategic results – current performance and future capability. So what considerations should we bear in mind when deciding on the correct measurements? There are two main considerations:
You might want to try the following exercise with your team:
If you are serious about becoming more strategic and enabling your team to do likewise, it is critical that your metrics give you information about your strategic drivers. If you continue to simply measure your monthly, quarterly and annual results, then that is all you will get – and nothing more strategic.
Over the next couple of weeks, why don’t you have a look at what you are currently measuring? Will your current scorecard give you the strategic success you seek? If not, what do you need to do to ensure that your strategy drives your scorecard and your scorecard drives the implementation of your strategy. And have a great fortnight.
The next article in this series deals with developing and exercising strategic influence. Please let me know if the information contained in these articles has been of use to you and, if you have implemented some of the exercises or suggestions, how they have impacted your strategy.
Recommended Reads
If you are interested in reading more about strategic leadership we recommend:
“Becoming a Strategic Leader” by Richard L. Hughes and Katherine Colarelli Beatty (ISBN 0-7879-6867-6).
“Leading Strategic Change – Breaking Through the Brain Barrier” by J. Stewart Black and Hal B. Gregersen (ISBN 0-13-046108-3).
“The New Strategic Thinking” by Michael Robert (ISBN 0-07-146224-4).
“Execution: The Discipline of Getting Things Done” by Larry Bossidy & Ram Charan (ISBN 0609610570)
The key to enabling oneself and one’s people to manage the tension between the two is strategic clarity and focus. The strategy needs to clarify not only what we will do, but also what we will not do – to ensure that activities that address short-term imperatives do not cost us the long-term successes we seek. Only when we are absolutely clear on what we will do and what we won’t do can we bear the “stress” of those activities that only pay off in the longer term while having no short-term impact.
If we are clear on what not to do, we can easily make decisions about things we should not be getting into in the first place, as well as making decisions about things we should be getting out of. This tells us what investments we should be making, and which ones we should not be making – or pulling.
Acting with the short-term and the long-term in mind also enables us to make decisions about the assets that need to be preserved – this could include a really strong brand, product lines that are young and promising in terms of their life-cycle, or competencies that set you apart from your competitors. This makes it all the more important that we measure not only short-term operational results, but also strategic results – current performance and future capability. So what considerations should we bear in mind when deciding on the correct measurements? There are two main considerations:
- It is better to have a relatively small number of measures – strategy is about making decisions, and the metrics should make this easier. Rather have 1 or 2 lag measures and their related 3 – 5 lead measures than sow confusion by measuring too much that appears meaningless. You are measuring to drive behaviour – you are not measuring to report!
- The measures should be a logical expression of the strategy – that old principle that you must “inspect” what you “expect”.
- The desired behaviours (lead and lag) must be measured very regularly (daily / weekly / monthly) and these measures made visible so that people get feedback as instantly as possible.
- Preferably people should report on their own results and behaviours to each other – this way, everyone personally accounts for their contribution to their colleagues. For more on this Google “The Four Disciplines of Execution” to get Stephen Covey’s views on what it takes to translate strategy into action.
You might want to try the following exercise with your team:
- Individually brainstorm the things you believe are critical to the organisation’s strategic success – the strategic drivers. These might include current capabilities or conditions that do not currently exist.
- Each person should select the 4 or 5 drivers that are most critical to strategic success and put them on a separate Post-It.
- Everyone should put their Post-Its on a presentation board, and then the team should sort them into logical categories – e.g. becoming the leaders in product development; or attracting and retaining the right talent. (This is not an exact science and you will find that categories get changed and things get moved around as a natural part of creating shared understanding – take your time.)
- Once the team has decided on a set of key drivers, the team needs to assess the importance of each driver relative to the other drivers.
- Once you have rank-ordered the list of drivers, you will want to identify methods of measuring success. It is better not to measure everything – rather select the 2 or 3 drivers that combine the highest relative importance with the lowest current effectiveness. It will be against these drivers that you will develop metrics to enable you to assess future capability.
If you are serious about becoming more strategic and enabling your team to do likewise, it is critical that your metrics give you information about your strategic drivers. If you continue to simply measure your monthly, quarterly and annual results, then that is all you will get – and nothing more strategic.
Over the next couple of weeks, why don’t you have a look at what you are currently measuring? Will your current scorecard give you the strategic success you seek? If not, what do you need to do to ensure that your strategy drives your scorecard and your scorecard drives the implementation of your strategy. And have a great fortnight.
The next article in this series deals with developing and exercising strategic influence. Please let me know if the information contained in these articles has been of use to you and, if you have implemented some of the exercises or suggestions, how they have impacted your strategy.
Recommended Reads
If you are interested in reading more about strategic leadership we recommend:
“Becoming a Strategic Leader” by Richard L. Hughes and Katherine Colarelli Beatty (ISBN 0-7879-6867-6).
“Leading Strategic Change – Breaking Through the Brain Barrier” by J. Stewart Black and Hal B. Gregersen (ISBN 0-13-046108-3).
“The New Strategic Thinking” by Michael Robert (ISBN 0-07-146224-4).
“Execution: The Discipline of Getting Things Done” by Larry Bossidy & Ram Charan (ISBN 0609610570)
