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The Strategic Thinker SM

PURE & SIMPLESM Advice To Gain Supremacy Of Your Sandbox

Issue 4/09:

10 Deadly Sins
That Lead To
Strategic Malaise?
The trouble is that they may guess wrong as often as they
“It’s easy to develop a strategy; guess right. Or else they learn what the strategy is over time by
the nature of the decisions they recommend that are either
it’s the implementation that’s accepted or rejected. Gradually, a subordinate learns where the
difficult.” line of demarcation is between the things that are permitted by
the strategy and those that are not. This is called “strategy by
This is a statement we have frequently heard over the groping”. This results when the strategy becomes clear or
years. Our own experience proves the exact opposite to be true. explicit only over a long period of time, during which people
If a CEO thinks that he or she has a solid strategy, and yet it’s not may have spent too much time pursuing and implementing
being implemented, only one of two things can be happening: activities that did not fit, while neglecting opportunities that
represented a better strategic fit. Worse than that, the strategy
1. The management team doesn’t know or understand the
may never become clear, or it may be badly misinterpreted by
strategy. (It is very difficult to implement a secret
people making an earnest effort to figure it out.
strategy.)
As one of our CEO clients once told us after our initial
2. If the strategy is understood but still not being session: “I was astonished that our senior management group
implemented, it’s because some members of the
had no concept of our strategy and disagreed with it once they
management team don’t agree with it and may, in fact,
learned of it.”
be trying to sabotage it.
Lesson 1: People can’t implement a strategy that has not
In our view, there are 10 deadly sins that an organization can
been revealed to them.
commit that will inevitably lead to these two conditions and
eventually to corporate extinction. Sin 2: Strategy In Isolation

Sin 1: Strategy By Osmosis A second reason the strategy may not be implemented
properly is that the CEO developed it in isolation. This is a
In too many organizations, the strategy of the company is
natural enough tendency, since a CEO’s job is strategy.
implicit and resides solely in the head of the chief executive.
Furthermore, most subordinates have no experience thinking
Most CEOs have some kind of strategy. However, they often
strategically, so there is no inclination, or framework, to involve
have great difficulty articulating it to the people around them in
others.
words that allow these people to make consistent and intelligent
decisions on behalf the company. A senior Many CEOs have a strategy, but their key
executive of a major company once said to people are not involved in the process of
us, “The reason I have difficulty In too many developing it and therefore they have no
implementing my CEO’s strategy is that I ownership. In such a case, subordinates
don’t know what it is!”
organizations, the usually do not understand the rationale behind
strategy of the company is the strategy and will spend more time
Because many CEOs have difficulty
verbalizing their strategies, most people are implicit and resides solely questioning it, or trying to figure out where
they fit, than implementing it.
placed in the position of having to “guess” in the head of the CEO
what the strategy is.

© 2009 DECISION PROCESSES INTERNATIONAL ASIA PRIVATE LIMITED


Address: 1 Sophia, #04-16 Peace Centre, Singapore 228149 Tel: 6235 1733 Fax: 6336 8022 Email: enquiries@dpi-asia.com
Asian Site : www.dpi-asia.com Asian Blog : dpi-asia.blogspot.com Global Site : www.decisionprocesses.com
Many CEOs have a strategy, but their key people are not involved in the process of
developing it and therefore they have no ownership.

The CEO becomes more and more impatient as subordinates In order to obtain commitment, key managers must be
question his or her logic more and more often. The CEO, on the involved at each step of the process so that their views are heard
other hand, can’t comprehend why his people are not executing and discussed. Participation, although it may seem time
what, to him or her, is a simple strategy. consuming, builds commitment and, in our experience, saves
exponentially more time on the deployment end of the equation.
Some CEOs might involve one or two people in the
Key managers buy into the strategy because they helped
formulation of the strategy. This is better than doing it alone, but
construct it. It is as much their strategy as the CEO’s.
it is still not good enough. The entire management team must be
involved in order to achieve accurate understanding and proper Many CEOs have used our process knowing the outcome in
execution. This can’t be accomplished simply by “going offsite” advance. They did so anyway, using it as a tool to tap the advice
with this group to discuss the strategy. A methodology, or and knowledge of their people and to obtain commitment to the
process, is needed to guide the discussion and keep it conclusions, so that implementation of the strategy can then
“strategic,” not operational. This is the basis of DPI’s Strategic proceed expeditiously. Still others, thinking they knew what the
Thinking Process. Involvement by senior managers in the basic outcome would be, discovered new ideas, or flaws in their
strategic decisions is the most effective way to create a strategy assumptions that would have caused difficulties down the road.
that not only looks good on paper but also actually gets By gathering the collective knowledge of key people, such ideas
implemented. can be evaluated and problems can be flushed out and dealt
with before they happen.
Lesson 2: People don’t implement what they don’t
understand. Lesson 3: Don’t outsource your thinking
to an outside consultant.

Sin 3: Outsourcing The Strategy To An


The worst of all strategic Sin 4: Operational Managers Are Not
Trained As Strategic Thinkers
Outside Consultant crimes and the “kiss of
The worst of all strategic crimes and the
death” for any strategy – Because most people spend their entire
careers with an organization dealing
“kiss of death” for any strategy – even a good even a good one – is to exclusively with operational issues, they are
one – is to have an outside consultant have an outside not good strategic thinkers, as noted earlier.
develop your strategy. No outside consultant
has the right to set the direction of your consultant develop your With few exceptions, we have found that only
the CEO or the general manager sees the “big
organization or knows as much as your own strategy. picture” and views the business and its
people about the business and the
environment in strategic terms. There usually
environment it is facing. Most strategies
is only one strategist in any organization, and
developed by outside consultants end up in the wastepaper
that is the CEO. Most managers are so engrossed in operational
basket for two reasons:
activity that they have not developed the skill of thinking
1. Everyone can quickly tear the conclusions apart because strategically. Therefore, they have difficulty coping with strategic
they are not based on an intimate knowledge of the issues, especially if these are sprung on them out of the blue at a
company, the business, or the industry. “retreat.”
2. There is no commitment to that strategy by senior “The problem,” says Milton Lauenstein (a planning guru) in
management because it is not their strategy. an article in the Journal of Business Strategy “is that many
executives have only the fuzziest notion of the functions of
Experience has shown that almost any strategy will work to
strategy formulation.” This is why a process that guides the
some degree, unless it is completely invalidated by negative
management team through these strategic issues is essential.
environmental factors. Experience has also shown, however, that
Expecting your operational people to suddenly become
no strategy will work as well as it should if a couple or a few
strategists without such a tool will create more problems than it
members of senior management are not committed to that
solves. On the flip side, given such a process, most senior
strategy.
managers will surprise you with their ability to think strategically
In effect, if total commitment is not present, those and creatively once they have the framework, permission, and
uncommitted to the strategy will at best implement it opportunity to do it.
halfheartedly and, at worst, on a day-to-day basis, do everything
in their power to prove it wrong.
Lesson 4: Encourage the participation of key subordinates
in the strategy creation process for strictly educational value.

© 2009 DECISION PROCESSES INTERNATIONAL ASIA PRIVATE LIMITED


Address: 1 Sophia, #04-16 Peace Centre, Singapore 228149 Tel: 6235 1733 Fax: 6336 8022 Email: enquiries@dpi-asia.com
Asian Site : www.dpi-asia.com Asian Blog : dpi-asia.blogspot.com Global Site : www.decisionprocesses.com
Sin 5: Planning Numberosis Sin 6: Meaningless Mission Statements

People will implement a strategy more effectively if they These days, almost every organization has a mission or
understand the difference between a strategic process and either vision statement constructed to articulate the business’s raison
long-range or operational planning. They also need to be able to d’être. Unfortunately, the efforts expended are usually not
distinguish between strategic and operational issues. helpful because they lack a structured process that could help
Participation in a clearly strategic process is an eye-opener for them in their discussions. As a result, they end up with
most managers. Most have never participated in a strategy statements that are so “motherhood” in tone that everyone can
session, or if they have, most find that they have primarily dealt agree with them, but are useless as guides to help people make
with operational issues, and so never learn the difference. Again, intelligent decisions on behalf of the group. Over time, the
Milton Lauenstein concurs: statement is quietly discarded.
Management should understand that planning Lesson 6: A strategy statement must serve as a filter for
encompasses two distinct functions: long-range operational decisions.
planning and strategy formulation. Confusing these two
activities has contributed to the sorry record of strategic Sin 7: No Crisis, No Strategy
planning. They are better performed separately.
Good times are another obstacle that impedes strategic
The process needed to determine the future direction of an thinking. When the numbers are good and all the charts are
organization is not strategic planning but rather strategic pointing upward, who needs to think about where they are
thinking. Strategic thinking is a process that enables the going? The need to think about strategy and direction usually
management team to sit together and think through the surfaces after a crisis. Our view is that strategic thinking should
qualitative aspects of the business and its environment. The team occur during good times as well as bad times because, if you
can then decide on a common and shared vision for the future of wait until the bad times, it obviously becomes more difficult.
that company.
Bill Gates, one of the business world’s foremost strategic
Although most companies have very sophisticated thinkers, is of this opinion as well:
operational planning systems, they do not have a formal process
My success in business has largely been the result
of strategic thinking. As a result, even when they do want to
of my ability to focus on long-term goals and
spend some time at the “mountaintop retreat” to think through
ignore short-term distractions. Taking a long-term
“where we are going as a company,” they usually do not have a
view does not require brilliance but it does require
process to “think strategically” and quickly revert back to what
dedication. When your business is healthy, it is
they do best - operational issues!
difficult to behave as if you are in a crisis. That is
Some companies have attempted to stitch together some why one of the toughest parts of managing,
strategic and some operational concepts into a “process,” especially in a high-tech business, is to recognize
making the exercise laborious and confusing. Our suggestion is the need for change and make it while you still
that the processes are different and must be separated. The have a chance.
factors and elements studied and evaluated in the Strategic
Thinking Process are not the same as those in the operational Lesson 7: Strategizing should occur during good times as
planning system. For this reason, different time slots should be well as bad.
allocated to each process.
Sin 8: The Critical Issues Are Not Identified
Lesson 5: Planning does not a strategy make.
One aspect of strategy is its formulation. Another is thinking
through its implications. Most strategic planning systems we
have seen used in organizations don’t encourage people to think
through the implications of their strategy. As a result, they end
up reacting to events as they are encountered and many people
Although most companies have very start losing faith in the strategy.

sophisticated operational planning Every strategy, especially if it represents a change of


direction, has implications. A good strategic process should help
systems, they do not have a formal management identify, anticipate, and effectively manage the
process of strategic thinking. strategy’s implications on the company’s products, markets,
customers, organization structure, systems, processes, personnel,
and culture.

Lesson 8: Thinking through a strategy’s implications is key


to its success.

© 2009 DECISION PROCESSES INTERNATIONAL ASIA PRIVATE LIMITED


Address: 1 Sophia, #04-16 Peace Centre, Singapore 228149 Tel: 6235 1733 Fax: 6336 8022 Email: enquiries@dpi-asia.com
Asian Site : www.dpi-asia.com Asian Blog : dpi-asia.blogspot.com Global Site : www.decisionprocesses.com
Sin 9: Not Understanding The Different Between A CEO who elects to seek outside assistance to help decide
Process And Content the future direction of the company is faced with having to
choose between two very different types of consultants.
In every strategy session that we facilitate, there are always
two dynamics at work, namely process and content. Content is One is the “content” consultant. This is the traditional type of
information or knowledge that is company or industry specific. firm such as McKinsey, Bain, Boston Consulting Group, and
Telephone company executives know a lot about cables, switch Monitor. These consultants’ claim to fame is that they have
“industry experts” who know their industry better than the client
gears, exchanges, routing, analog or digital devices,
does. Their objective is to formulate a strategy for you since your
transmission, and so on. They know all this “content” because
people are not as knowledgeable as their “experts.” In other
they were “brought up” in the industry and that is the content
that is specific to that industry. It is part and parcel of their words, they do it for you, or to you.
lexicon. In our view, this form of consulting may be appropriate in
In order to climb up the ladder in most companies one needs regards to operational issues, but it is not appropriate to strategic
and strategic direction. These firms are “content” consultants
to be a “content expert.” This is necessary in order to be able to
and they are selling content.
manage your way through the day-to-day “content-laden”
operational issues. Most executives get to the top of their Unfortunately, they sell the same content to all their clients
respective silos because of their content expertise, and rightly so. in that industry. The best result is a me-too strategy that does not
At the strategic level, which is above the silos, content set you apart from your competitors and will never bring
supremacy over them. You are, in our humble opinion,
expertise alone is not sufficient. In fact, too much content
outsourcing your thinking.
knowledge may be a major impediment to good strategic
thinking. This is because strategic thinking is process based A better service to a CEO and the management team, in our
rather than content based. view, is to bring them a critical
Operational management requires Every strategy, especially if it represents thinking process and guide them
the skill of analysis while strategic
management requires the skill of
a change of direction, has through that process. It is their
content going into the process
synthesis. These are very different implications… on the company’s and it is their content coming
skills. products, markets, customers, out. When the strategy has been
constructed by the people who
Analysis is the ability to study organization structure, systems, have the best content to offer
content and put it into logical
quantitative pieces. Synthesis is the processes, personnel, and culture. and who also have a vital stake
in the outcome, such a strategy
ability to make rational decisions
gets implemented much more quickly and much more
based on highly subjective, sometimes ambiguous or
successfully than one that is imposed on them by an outside
incomplete, pieces of data. Synthesis is highly qualitative in
nature. Strategic thinking falls into this category. It is the ability third party.
to take subjective data and opinions and bring these into an Laurie Dippenaar, CEO of FirstRand, one of South Africa’s
objective forum where rational decisions about the future of the largest financial services firms, agreed after the company used
enterprise can be made. In order to achieve this outcome, a CEO our process.
must have a “process of strategic thinking” that enables the CEO
and the management team to assemble all available information, “What’s affected us more than anything else is the
put it into perspective, separate pertinent from nonpertinent fact that is systematically extracts the thinking and
ideas from the executives’ heads, rather than
information, and draw out rational conclusions.
imposing the consultant’s thinking. I think it almost
This approach works especially well for groups of decision forces it out of their heads. That obviously leads to
makers in that it organizes information, separates fact from myth, the strategy being owned by the company, rather
and enables groups to reach consensus decisions objectively. than by the consultant. I’m not just repeating what
Strategic thinking is, essentially, applied common sense, and is DPI says, it actually works that way.”
easy for anyone to understand once the methodology is
available. Lesson 10: Process assistance speeds up strategy
implementation.
Lesson 9: Good strategic thinkers separate process from
content

Sin
The 10: UsingThinker
Strategic A Content
SM Consultant
is produced by DPI Asia, the Asian operations of Decision Processes International, a global management consulting and human
capital development firm specializing in critical thinking processes that help organizations transform the way they conduct their business.

It is an insightful series of articles that take a PURE & SIMPLESM look at the essential aspects, concepts and process of strategic thinking that separate winners
from the rest.
To obtain more articles register for our blog at www.dpi-asia.com or dpi-asia.blogspot.com

© 2009 DECISION PROCESSES INTERNATIONAL ASIA PRIVATE LIMITED


Address: 1 Sophia, #04-16 Peace Centre, Singapore 228149 Tel: 6235 1733 Fax: 6336 8022 Email: enquiries@dpi-asia.com
Asian Site : www.dpi-asia.com Asian Blog : dpi-asia.blogspot.com Global Site : www.decisionprocesses.com