As I write this I am a participant in our strategic planning forum with a mix of old and new ‘friends’. Having written so much on strategy execution, it seems now I have to eat my own dog food. I’m sharing my insights into what it takes to build a winning edge through strategy execution. But such a conversation has to begin with a shared understanding of what strategy actually is.
What is strategy?
There are four elements that collectively give us insight into a firm’s strategy: perspective; position; plans; patterns.
Perspective refers to the shared mental models of the strategic leadership group. How do they collectively understand the market? What are the strategic frames by which they interpret the world? Notice that these are shared mental models. Individual mental models will not lead to collective patterned activity. It is only shared mental models that give an organisation clarity and consistency. One of the primary outcomes of any strategy session is a shared sense of the world.
Position refers to the market position. Porter argues ‘strategy is position’: what is your unique value proposition in the market place? But market position is simply intent. Any conversation about position needs to be translated into the design of their business activity system. A point of difference in your market position means choosing to perform activities differently, or choosing to perform different activities. Absent one of these differences in your activity system, it takes a certain arrogance to assume you will be able to maintain a competitive advantage.
Plan refers to the ‘ubiquitous’ strategic plan. The inverted commas reflect the many organisations that say they have a strategic plan but actually just have a business plan or a long term resource plan. We need to do better at the planning element of strategy, but as McKinsey’s Fred Gluck has noted, the plan is only one element and not the most critical element of strategy execution.
And finally, pattern is the realisation of the previous three: the characteristically enduring and persistent features of the organisational behaviours and commitments. This is the ultimate ‘measure’ of strategy. It is not the intended or espoused strategy: it is the lived strategy, the ‘realised’ strategy.
So what? We too often see execution as translation of the plan into actions. That’s only part of the story. Sometimes an obsessive commitment to translating a plan into outcomes can be counter-productive. When leaders respond to shifting data and are surmounting unexpected obstacles they are showing the best of strategy execution. But this requires shared perspective, clarity around position, and an understanding of the underlying assumptions embedded in the plan.
What now? One of the core elements of my execution architecture model is clarity around strategy. But too often executive teams ‘presume’ clarity exists. Next time you are having a conversation about strategy execution, begin with the question: what is strategy? And don’t settle for the simple answers. Growth doesn’t occur without some level of discomfort. Are you willing to sustain the discomfort necessary for this conversation?
To learn more about strategy execution, check out our upcoming workshop: Creating a winning edge through strategy execution