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Making Big Decisions Better - Insights, Applications and Real lIfe Examples

Why Leaders Need to Define “Strategy” in Their Company

1. Current Strategy Gap – Absence of a Shared Language

Today, walking the halls of your organization, each person has their own working definition of strategy. Whether they have read the latest strategy book, adopted something from experience or learned it in their MBA program, everyone has their definition but not a common one for the company.

And this lack of a standard approach is a major cause of seen and unseen confusion in many companies.

Why?

Because when they use the word “strategy,” they are not talking about the same thing and no one wants to admit it.

For the last 17 years, I start every new consulting engagement by asking the CEO and executive team within the first five minutes to collectively do ONE thing: take five minutes and answer the following question


What is your definition of Strategy?


Here are some real responses from a recent manufacturing client executive team who collectively manage and lead over 1000 people across two continents.

  • Sue: Path to the goal of making money
  • Bob: A way to conquer problems
  • Bill: Tools required to successfully grow the company 4
  • Peter: A method of thinking to meet a goal
  • John: Work at making a plan to meet the end goals

These leadership team members all have different answers.

When I ask them, “What’s the So What?” they consistently share the following concerns or comments when comparing responses:

  • There are SIMILARITIES and DIFFERENCES
  • Some talk more about the WHAT
  • Some talk about the HOW
  • Some define it as an END POINT
  • Others see it as a SET of STEPS or TASKS

So at the same time they are all RIGHT and WRONG.

One thing is certain: when people in the organization use the word strategy in their meetings, client proposals, customer service hotlines, purchasing department parameters, procurement negotiations and board meetings, they are NOT on the same page.

The absence of shared language creates five problems that detract from day-to-day to performance:

  1. DIFFUSION
  2. UNNEEDED CONFLICT
  3. WASTED TIME
  4. DEFAULT TO OPERATIONAL THINKING
  5. LACK OF FOCUS

2. Immediate Benefits of Defining Strategy

The best CEOs and organizations I have worked with come to the realization that they must define what strategy is for their organization rather than leave it to chance. This is not about imposing or legislating a RIGHT definition, but rather having a common language and approach for your company that pays dividends.

This definition returns everyone back to the simplicity of strategy Namely, this definition returns everyone to making decisions with data about what products to offer, what markets to serve, and what capabilities to build through the eyes of the customer and relative to the competition.

A successful strategy delivers superior profitability or return on invested capital (ROIC) relative to your rivals. By taking the initiative to define strategy in your organization, you will come away with three powerful benefits immediately available to your organization:

1. SIMPLIFY what should be focused on and with your control: Products, Market and Capabilities relative to the competition.

2. ALIGN the executive team so they are working from the same page of issues and buckets of concerns to deliver on the purpose and path they set for the company.

3. BUILD strategic competencies by having a singular starting point which serves to deepen bench strength of the leadership team and those below them.

Connect with me if you have questions or comments

Timsssss

My new book on Strategy – Making Big Decisions Better: How to Set and Simplify Strategy will be available June 1st – pre-order a  copy today!

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