by Paul Lohnes, MBA, PMP
So much has been written about being strategic, playing strategic, and even planning strategic, but what is all this talk about strategic involvement anyway? The definition of strategy is ‘a plan of action or policy designed to achieve a major or overall aim’ (online Webster dictionary) which does contain some of the elements of strategic thinking in that it involves a plan to achieve a major aim placing the level of strategy at the overall mission or vision perspective of an organization. However, in recent times, organizations have lost their ability to concern themselves with this view of their existence. Witness the latest string of unethical, unprofessional, unprofitable, and even self-extinguishing behavior that many commercial and governmental organizations have engaged in landing them on the front pages of the media and the focus of many a prosecutor. This is NOT strategic anything, but short-term self-enhancement by those with whom the ‘keys of kingdom’ have been entrusted. Without the best interests of the organization at the center of their daily actions, a senior leadership team (SLT) cannot be strategically oriented.
So to be strategic involves the following characteristics (you can use these to determine your organization’s understanding and implementation of strategic thinking…):
- Having the long-term best interest of the organization as a primary motivator,
- Measuring action against the achievement of mission or vision initiatives,
- Selection of portfolio components that enhance the business status and preeminence of the organization
Each of these characteristics are not found in the major business schools or strategic courses taken by the majority of business professionals which may explain why the current crop of business leaders are not producing or undertaking the activities that propelled their predecessors and their organizations to the achievements such as the Hoover Dam, the Empire State Building completed in 14 months not the almost 14 years the World Trade Center replacement consumed, the US Interstate Freeway System completed in just 35 years spanning over 47,700 miles; now strategic horizons are considerably shorter than what would have been able to produce the above achievements. Figure 1, from the AT Kearney organization shows that over 50% of strategic horizons are 3-4 years, and only 6% exceed 7! Their partnership of global and forward thinking professionals have studied and written about this phenomenon and have concluded that there are many reasons for this significant reduction in what passes for strategic thinking at many organizations:
- Executives are incentivized for the short-term,
- CEO contracts and tenures are declining against evidence of negative value creation,
- Market expectations by mutual fund managers and analysts in control of company shares,
- Dwindling risk tolerance in organizations due to recent public failures and prosecutions,
- Information overload favors tactical being mistaken for strategic thinking,
- Rise of the ‘emergent strategy’ concepts
What the AT Kearney professionals discovered is what we at the PPG have been discussing for years in the project management disciplines is that short-term revenues are blinding the SLT members to think and act strategically. Remember as we reported in previous PPG issues, projects are the only activities that an organization can deploy to genuinely and repeatedly achieve their mission and/or vision initiatives. Operations are very important, mind you, but they are only generators of current revenue flows – it is the correct selection of projects to populate your portfolio that will provide the basis for future operations and revenue enhancements. Does the image of a ‘cash cow’ mean anything at this point? (Image of cash cow)
Getting your organization to think strategically is not an easy endeavor especially if the SLT team members are not practicing strategic thinkers themselves. Strategic thinking is and will always be a top-down approach to improving the organization’s future and achieving the hopefully forward-looking competent initiatives that must chart the organization’s progress. It involves understanding the logic behind strategic thinking whereas the urgency of daily needs can many times obfuscate the strategic perspective. What is the strategic logic chain that must be understood by all organizational participants – not just the SLT team? Follow this chain from a strategic perspective:
- Strategic thinking is thinking about growth,
- Strategic growth requires movement,
- Strategic movement is toward progress,
- Strategic progress is focused on success, and
- Strategic success is valuable; therefore strategic thinking is valuable.
There you have the logic behind the value of strategic thinking in all organizations regardless of their industry, venue, profit motive, or size. To think strategically is to think about your organization’s success – pure and simple.
Teaching strategic thinking to your organization requires more than just ‘thinking out of the box’ as many will tell that they practice strategic thinking since they are ‘out of the box’ thinkers. Sorry, not good enough. Strategic thinking requires a different perspective, a different mindset, or different context than what you are probably practicing today. To think strategically, one must first understand several ‘As-Is’ concepts of their current organizational cultures:
- What is the current organizational culture with respect to horizons and mission/vision initiatives?
- What is the current organizational thinking mostly consumed with: operational, tactical or strategic?
- What are the organizational current limitations such as funding, control, industry, or regulatory mandates?
Only by understanding your current environment or context can you make the value of strategic thinking stick with your organization. You do not want to start implementing strategic thinking initiatives only to have them lose steam and become just another ‘management by monthly program.’ There are many things you can do to start the process of implementing strategic thinking. Our PPPM Mini and BA Mini articles begin a series of discussions on these topics starting with the concepts of ideation, but for our purposes, we propose the following simple steps that you can take to improve the strategic thinking of your entire organization. They are:
- Begin with the ‘tone at the top’ support for strategic thinking – if the SLT will not think strategically no one else will as well,
- Disseminate the organizational mission and/or vision initiative with explanations, reasons, logic, and even stories behind them – make them real to your organization participants,
- Plan a strategic thinking program where all, and we mean all, organization participants are encouraged to think beyond their daily activities, and finally,
- Do NOT give up after a few months or quarters – strategic thinking takes time to foment and incubate.
Briefly, beginning with the ‘tone-at-the-top’ support by your SLT team is probably the most important aspect to getting your entire organization to think strategically. Without your ‘C’ level team members active and constant support of strategic thinking, the organization will simply continue to plod along doing what they did yesterday without even knowing that there is a larger part they can play in the growth of the organization. Igniting the passion of strategic thinking is something that everyone in an organization can do – it is NOT wasted time. Let us end with a story about a janitor that while alone in a huge building at night became interested by all the computers that were simply doing nothing but running a useless screen saver program with the company’s initials bouncing to and fro on the darkened computer monitors. Remarking about this spectacle to his son the next day whose was attending a local, but rather prestigious university in their computer science program, the janitor-father said that it seemed a rather large waste of energy to just bounce a logo around – too bad the company could harness that wasted energy. The father related this fact to his son, and the son suggested that he bring it to the attention of the company’s ‘higher ups.’ Since the company had a strategic incubation program in place, the janitor was credited with the idea where upon the janitor’s son was given a grant to produce a solution to this seemingly waste of energy. The son attended his father at work where upon the son also saw the countless number of desktop computers mindlessly bouncing the logo on their screens. He counted the number computers on that floor and added to it the number of other floors his father said contained the same picture. The son went to work and produced a screensaver that actually allowed the company to utilize the off-duty computing cycles of the desktop computers (which he sold to the company for more than his father had made in his entire working life) and allowed the company to save over $20 million USD a year in unnecessary mainframe upgrades and licensing fees. The additional savings allowed the company to provide three new innovative and ground-breaking services to their customers which generated over $250 million USD over the next eight years supporting the company’s expansion and growth through purchasing of several competitors and emerging firms.
Yes, the father and son were richly rewarded by the company, that is what you wanted to hear, and yes it was what actually happened. More importantly the company had decided that anyone regardless of station or title could have an impact on the organization’s future. Sadly in most organizations, the janitor would have been nicely but firmly ignored, and the screens would still be bouncing their company’s logo mindlessly on the screen.
Strategic ideation can come from anywhere and from anyone to whom the organization gives permission to think strategically. Do not assume that only those in the executive wing are the sole purveyors of such organizational changing thoughts; however, they MUST be the ones to start, support, and foster its growth and application throughout the organization. Where does your organization stand? Do you know what the mission and/or vision initiatives are? Does your SLT ensure all organization participants are trained in caring about the firm’s future? If not, your organization is probably standing still and such complacency is usually dealt with harshly by the economy and their environment. Nature decomposes that which stands still too long…