“To excel at strategy, we must first understand what it is” - Carl von Clausewitz
Leadership is critical to formulating and implementing strategy, and implementation requires strategic leadership.
Yet some organizations seem to get a bit confused when it comes to strategy, priorities, outcomes. Strategy teams spend months working with senior leadership and boards to formulate strategy and the strategic narrative. Yet, come Investor Day – the presentation only shows financials and financial targets, and no sign of the strategy needed to achieve these targets and numbers. Investors may not be interested in the strategic detail, but for the organization this can be confusing.
Another observation is the organization of a thousand and one strategies. Instead of anchoring all geographic, divisional, functional, team priorities into the overarching strategy, individual parts of the organization develop their own strategies, priorities and KPIs, so creating lack of alignment.
Strategy work has its origins in military history going back millennia. Probably the best known is Carl von Clausewitz’s ‘On War’. Von Clausewitz (1780-1831) was the Prussian general famous for his work on the ‘moral’ (psychological/morale) and political aspects of war.
Summarized very simply: the top ‘layer’ – Level 1 - of an organization maps out the overall direction, the intent = the what and why and defines high level actions. Level 1 actions shape what & why for Level 2; Level 2 then defines actions; Level 2 actions = what & why for Level 3…. And so on - ensuring that every level’s intent and actions are linked to each other and always back to Level 1.
And the key to a successful strategy is simplicity – easy to understand, easy to execute.
In centralized organizations you would expect this connection to be very tight. In de-centralized ones, senior management needs to decide and clearly communicate how much alignment there should be.
Imagine a bridge
Moving away from the martial analogies - you can also imagine strategy as a bridge. Point A – starting point. Point B – where the organization wants to be in terms of KPIs in x years’ time. The whole bridge is the strategy. The foundations are the organization’s values & desired culture. The pillars are the strategic objectives, the smaller pieces the actions; the road could be the people – ie the part that connects and holds it all together and delivers the strategy by joining up A & B. The bridge spans the gap between current and future state and aims to avoid ‘uncertainty’ – whatever that may mean for an organization, for example potential threats, issues, competition, global economy, societal changes, political risks.
Strategy and planning are not the same thing. Planning is important, but it follows strategy, it does not substitute. Nor are tactics strategy, they are actions to execute the strategy.
Trust in senior leadership, including decisions leaders make and leadership communications often are key drivers of organizational engagement and so potentially impact performance. It therefore is leadership’s role to inspire, motivate, role model and live values & behaviors and to communicate.
Strategic leadership means focusing on outcomes, not getting sidetracked by lesser objectives or activities. It means creating the links between local/departmental priorities and the overarching strategy. It also means having certain qualities, such as empowering people, making it feel safe to fail, honesty and transparency. For HR this means providing experience-based learning for people, providing leadership development, making sure people hire for transformation and diversity and help create the optimal work environment
Strategy into action: implementation
Strategy can’t be implemented without the involvement of everyone in the organization.
This takes us back to the importance of communications – enabled by the Communications team. Senior leaders, people managers, everyone in an organization needs to be able to tell the strategy story to customers, external stakeholders, colleagues, family, friends. Everyone needs to know or have at least a basic awareness of the company’s high-level ambition and strategic direction to understand the company they work for.
To turn the strategy into action, people need to understand what it means for them – how it relates to their team and their own job. This is what is most important to people, and it is why the line manager’s role as a communicator is so important. It’s their responsibility to take the ‘big picture’ messages and information and translate them for their location and their team to create relevance. This in turn can strengthen commitment, engagement and potentially performance.
An organization’s strategy shapes its future. It is brought to life by people, starting with senior leaders and through all levels of the organization. It requires organizational agility to make choices, to anticipate, to respond, learn and so create competitive advantage and make the organization a place where people want to be and where they want to make a difference.