Let's talk about purpose: One community, one shadow

Have you sometimes found yourself confused at best, frustrated or cynical at worst, by the vagaries of ‘mission, vision, values’?  CEO’s lament the confusion of language around these constructs. And ‘consumers’ lament of the disconnect between the words and their observations. Daniel Pink refers to transcendent purpose.  He also observed: when the profit motive gets unmoored from the purpose motive, bad things happen. Banking Royal Commission anyone?

This blog unpacks one model for ‘visioning’ and makes the case for junking most corporate value statements. And I offer an approach to ‘purpose’. For me, the test of purpose is: authenticity; emotional connection; and open conversation.

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Smartest guys in the room … what could go wrong?

What could go wrong?  Plenty it seems.

Commonwealth Bank (‘Which bank?’) is just the most recent example of overconfidence in the ‘intellectual capacity’ of a leadership team to steer the organisation through the ‘white water’ of modern corporate life.  In its recent report on failures at CBA APRA reportedly found:

  • The board relied too heavily on senior management’s ‘high IQ’ and their ability to take care of all things
  • That their risk management processes relied too heavily on ‘raw intellect over comprehensive analysis’

This is a pattern that we see repeated too often and yet we still fall for it.  We’re a bit like Charlie Brown and Lucy (in the old Peanuts cartoon).  Despite Lucy repeatedly pulling the ball as Charlie goes to kick it, each time Charlie imagines 'this time it is different'. 

There’s been a host of studies on team performance and team dynamics over the years that show that teams full of ‘really smart people’ don’t perform as well as teams which might have 1-2 really smart’ players (and not necessarily the CEO).  But somehow, we too often assuming that the answer to complex problems is ‘smart people’.    

This has proven to be a very expensive assumption. 

Perhaps the doozy of them all was Long Term Capital Management.  LTCM was a hedge fund that boasted two Nobel laureates (Merton & Scholes, famous for options valuation theory), multiple PhD’s, and fund management veterans.  LTCM grew to over US100B in funds within 4 years, showing 40% annual returns.  But for all that, the Asian financial crisis triggered a collapse that saw LTCM facing US1Trillion in default risks.  Ultimately the US Treasury had to step in to stablise the global financial system.   So much for genius. 

A close second: Enron.  From a pipeline company in the 1980’s, Enron grew into the world’s largest energy trader.  The collapse of Enron is told in a documentary ‘The Smartest Guys in the Room’.  It traces the rise and fall of Enron, which grew to be the darling of Wall St, until it collapsed.  The Chairman and Chief Executive of Enron at the time were Kenneth Lay and Jeff Skilling.  They have been described[1] as ‘two supremely arrogant and belligerent men who believed they were the smartest guys in the room: that through sheer cleverness and creativity they had brought into being the most innovative corporation in the US’.  Indeed, Enron was named ‘America’s most innovative company’ by Fortune for six consecutive years.   The collapse was triggered, at least in part, by investigative reporter Bethany McLean who was undistracted by the glossy brochures and glitzy premises.  It seems she didn't drink the Kool Aid.  

As the dominoes began to fall a pattern of appalling behaviour emerged.  For example, when the power markets were deregulated in California, Enron shut down energy generation to create power shortages and drive up energy prices.  According to The New York Times, the top brass at Enron realised what was happening ‘but like a mad and dysfunctional cult, everyone carried on’.  This description has parallels to the revelations of the current banking royal commission.

My final example is closer to home.  The CEO of one of Australia’s leading companies had a reputation for his prodigious intellect.  The company prided itself on capturing the best talent available in the sector.  Despite this, with his powerful intellect, he developed a reputation for intellectual bullying.  But in the years prior to his retirement he was persuaded to introduce a values-based leadership development program.  In a post-retirement interview he observed, with a sense of profound insight, that he had recently come to the realisation that ‘it was all about the people’.  One got the impression the interviewer was nodding approvingly at such wisdom. 

I was bemused.   How is it possible that the CEO of a major company, with a reputation for a prodigious intellect, took until his late 50’s to realise ‘people matter’?  This is Management 101 on any MBA.  Tom Peters, management guru, author and former McKinsey partner, has been telling us this for as long as I can remember. 

The simple reality is that intellect can only get you so far.  Perhaps intellect is a bit like money: more is better up until you reach a point at which the upside plateaus.  At this point, other factors – wisdom, emotional intelligence, and the collective intelligence – begin to play a much bigger role.


[1] Oppel, R. A. and A. R. Sorkin (2001). Enron's collapse: The overview.  Enron collapses as suitor cancels plan for merger. The New York Times.

MBA's, strategy and judgement

Why do we teach the various models and concepts of strategy?  Is it as simple as Lewin's aphorism: there is nothing so practical as a good theory?  Actually, it is much more than that.  At its core we are teaching judgement; or at least, providing tools that will enhance judgement.  

But what is judgement?  What does it look like in action?

To finish I offer my own simple mantra for a great strategy process: immersion; synthesis; simplification.  

DDB ... a strategist's view

PS: to my regular readers, my apologies. It has been too long.  But in the last couple of months I've been teaching multiple MBA programs; working with a CEO to develop their strategy; and travelling to KL for some leadership development programs on strategy execution.  And more.  

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What driving fast cars can teach you about strategy …

Too many executives are focused on the near field obstacles ahead of the end game.  They collapse the time frames in their strategic thinking based on ‘felt’ competitive pressures.  Gary Hamel observed nearly 30 years ago, “most strategic plans tell us more about today’s problems than tomorrow’s opportunities”.

But Jeff Bezos (CEO Amazon) argues that a short time horizon confines organisations to a crowded competitive space.  How do you extend the attention span of the organisation?  Thinking about the longer-term future does not guarantee success, but the converse pretty much guarantees failure in today’s competitive landscape.

DDB ... a strategist's view


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Brexit surprised. Trump shocked. A strategist’s view

I am often asked: ‘when should you conduct a major strategic review’?  There are various catalysts for a deeper strategic review: a new CEO; serial underperformance; business model disruption; major external shocks.  Brexit should have been a catalyst for a process of deeper strategic reflection within most enterprises.  Post the Brexit decision if you weren’t running scenarios which contemplate a Trump presidency as part of a broader geopolitical shift you were gambling on a status quo potentially under threat.  The next step in that narrative has now unfolded.  Post Brexit it was no great stretch to imagine a Trump presidency. 

But what does this mean for business?  The reality is no-one knows. But in a VUCA world, scenario planning is the best tool to prepare your organisation for what may lay ahead. 

Note: this is a slightly longer blog than usual (ca. 5 mins)

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Are we really that bad at strategy execution? Mostly yes ...

Last night I was teaching strategy execution on the MBA capstone unit. I asked the participants: ‘in your experience, how well did the companies they know rate on strategy execution on a scale of 1-10' Only one rated some of the companies he’d worked with above 5. He gave them a 6-7: ironic really that this defined the benchmark for ‘pretty good’. And worse, 24 others rated their experience as ‘less than 5’. 

When I asked this same group why this was so, out poured all the usual issues: lack of strategy; lack of alignment; confusion; poor communication; lack of resources; poor planning; lack of metrics, and so forth. This was a diverse group, mostly from middle management.

This is truly tragic.  Why? Because it doesn’t have to be: shouldn’t be. There is nothing we don’t know about what is required to execute well. So we need to think more deeply about these issues: why are we really so poor at execution; and what can we do about it?

If you want to know the answer to these questions, come along to a half-day workshop (14 October): A winning edge through strategy execution. You can find the workshop details here … Creating a winning edge through strategy execution. There are still a few places left.

You might also like to check out some of my recent blogs (eg. What's your plan to overcome the strategy-2-execution deficit? ).  

Strategy, execution and dog food ...

I've written a lot about strategy execution recently, but it begins with a shared understanding of what strategy actually is.  Strategy has four dimensions to it: perspective; position; plan and patterns.  You need to understand each of these if you are to overcome the strategy-2-execution challenges.  

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?

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What's your plan to overcome the strategy-execution deficit?

The first step to solving a problem is to recognise you have one.   Netflix CEO Reed Hastings recognises his biggest challenges now are execution.  Do you have an execution challenge? 

But before you can execute, can you summarise your strategy in 35 words or less?  Would your colleagues put it the same way?  And would they recognise the same top five priorities?  Check out what the research tells us.  

On execution, too many organisations are serial under-performers.   What specific action steps will take your organisation's strategy execution to the next level.  We have developed an Execution Playbook to help clients tackle the challenge of execution. 

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Bridging the Strategy-Execution Air Gap

My previous blog on execution provoked this lament from one reader:

“See, this is what shits me.  We don't want to take the time to actually consider the execution piece of our 'strategy'. Once we have something that looks pretty on paper we then go back to bidding work willy nilly and trying to operationally improve our projects on an individual basis.”

I had written about the socio-cultural elements that could bring much greater success to your strategy execution efforts.  But this only works if you have the fundamentals in place.  Unfortunately organisations often experience an 'air gap' between strategy and execution.  

This blog highlights the gap between the 'what' and the 'how' of strategy execution.  Mintzberg's mantra of 'codify; elaborate; convert' offers a sound process to close this gap.  

You can't solve a problem you haven't defined.  Do you have a strategy-execution air gap?



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Can someone help me please? I'm stuck!

At a recent workshop a client expressed the fear that she felt stuck when thinking about strategy execution.  That's not surprising.  Research consistently shows that organisations massively under-perform on strategy execution.  

I outline five practices here that will give you a winning edge when it comes to strategy execution. Execution is not a trivial part of managerial work: it defines the essence of that work.

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Apparently mining blew the boom ... but who's the greater fool?

The headlines scream at you: major miners blew the boom.  It is true they repeated the patterns of all commodity booms.  But are we guilty of playing Monday morning quarterback?  What might they have done differently?

And what about shareholder value?  When did we lose sight of the value part of the equation?  And who was the greater fool?

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Let's talk productivity and technology management ...

Technology should be an integral part of any productivity strategy.  But why do some organisations struggle to develop effective technology strategies?  This was a question we put to the leadership team we were working with on a technology strategy some years ago.  They identified 6 distinct barriers:

  • Lack of aspiration … there was no clear ambition
  • Lack of a technology strategy … resulted in a random approach to technology
  • Lack of awareness … little knowledge of the external possibilities
  • Risk aversion … doing nothing seemed less risky than doing something
  • Lack of capability … lack of structures to effectively engage in the strategy
  • Lack of execution … folklore around poor technology implementation (over budget/over time/under delivered)

How does your technology strategy stack up?    

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Rethinking leadership development - it's about strategy execution

About 15 years ago a major Australian resources company set out to develop ‘world class leadership’.  But Professor Chris Worley rebuts[i] the usual prescription of ‘more leadership’.  He argues that asking people to change behaviours without changing the underlying system – the structure, systems and processes – is borderline immoral. 

Leadership requires us to develop new behaviours and create a context in which those behaviours can flourish.  My research explored the barriers organisational context creates in the pursuit of 'world class leadership'.  These prove to be at least as important as individual factors.   But what are the conditions we need to create to enable leadership?  

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Strategy lessons from the greatest CEO in tech history … and it's not Jobs

The recent death of Andy Grove passed unremarked in the Australian press.  Grove has been called the greatest CEO in tech history: he mentored a young Steve Jobs.  A former Intel CEO, Grove was responsible for the transformation of Intel from a ‘memory company’ to a ‘microprocessor company’.  Few companies have successfully redefined themselves so fundamentally.  When Grove stepped down as CEO in 1998 Intel was earning $6.9B profit on $25B revenue. 

The story of the transformation remains a classic case study in strategic leadership.  

I highlight three key lessons and suggest some practices you build into your personal leadership repertoire.

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Strategy's fundamentals ... better practice, not neater theory

Henry Mintzberg was right when he declared ‘we need better practice, not neater theories’.  Three theoretical paradigms provide an overarching framework for strategic thinking.   And these were part of the economics discourse more than 50 years ago.  But any one of these by themselves is insufficient.  

It is the overlay of the insights from these three paradigms that create the case for change and that shape the strategic option space for an organisation.  Organisations can improve the quality of their strategic thinking by applying these frameworks with a combination of discipline and creativity.  

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The cost of presumptions - international case studies

At their most dangerous presumptions are assumptions that are accepted as a ‘social fact’.  This makes them more dangerous than assumptions.  Assumptions should be explicitly identified and can be tested.  But we remain blind to our own presumptions. 

The risk of presumptions is everywhere around us in the age of disruption, but it exists also in other areas.  Shell lost control of a major project in Russia; Tata had to move the Nano car plant weeks before commissioning.  

Presumptions in both cases turned out to be a very costly.  

What can you do to reduce the unanticipated risk of presumptions?

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Breakout strategy: what if anything were possible?

At its core, strategy is design.  And great design starts with the question: what if anything was possible.  If we start with constraints we get designs for tomorrow that merely tweak today.

What if we applied the same design principle to the strategy process?  This would improve the chance of creating something truly distinctive: a ‘breakout strategy’.

In preparing for a leadership conference Starbucks CEO Howard Schulz argued:

Before we could challenge the status quo, my colleagues and I had to see it in new ways, reframe our existing ideas, and move beyond self-imposed constraints to imagine new possibilities.

How bold are you willing to be  to achieve something truly distinctive?  

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Avoiding Gray Rhinos ... strategic renewal and the status quo trap

Strategic renewal is a fact of life,  While strategies constantly evolve, organisations experience strategic drift either through organisational entropy (the tendency for systems toward increasing disorder) or market and competitive shifts that are no longer reflected in our strategies.  The challenge is to respond to these issues before you reach crisis.  Regrettably, organisations often move too late.  Why?

There are two explanatory factors: a ‘failure to see’ or a ‘failure to move'.  This blog illustrates the power of some of these issues and describes an approach used in a recent workshop to overcome some of these limitations.   

This is part 2 of a three part series of blogs looking at some of the issues at different stages of the strategy life cycle.  To see the earlier blog click here


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Austerity is not a strategy

Three clients, three strategy workshops, 8 days: intense.  Each client is at a different stage of the strategy life cycle (see my recent blog).  And each workshop highlighted a theme which reflected where that client sits on the strategy life cycle.

Mining services clients are clearly in the ‘rebuild’ phase.  For about two years now the mining sector has drawn up the moat bridge.  The more recent collapse of the oil price suggests the oil and gas sector is about twelve months behind the miners.  

Mining services companies have followed suit, with even more dramatic headcount cuts, many of them in survival mode.  Austerity became the main game.  

But let’s be clear: austerity is not a strategy.  So what is next?  

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