February 19, 2012 §
First of all, what IS strategy, anyway? Ask 10 people and get 10 answers. But I’ll answer the question this way: strategy involves assessing an organization’s internal and external factors to establish the most desirable future direction, and to determine a course of action and an investment of resources to get there. Strategy can be “macro”, such as when setting a company vision, or tactical, such as when deciding whether, where and when to open a new manufacturing facility.
Now, after you get some strategy projects under your belt (and I’ve seen more than my fair share, having been in and around the field for over two decades), you start to notice some patterns related to successful strategy projects and the people who run them. You also begin to realize that the patterns overlap greatly, meaning, great strategists are ones who excel across the lifecycle of a project, and successful projects are ones that leverage the full capability of a top strategy talent. Being thoughtful about these characteristics can be helpful in many ways … when project planning, when staffing a team, and when recruiting and hiring, for example. And if you’re an up and coming strategist, the reverse is also true – when deciding to whom you’d like to entrust the next few years of your career. So what are these characteristics?
- A good strategist is curious and aware: sometimes, strategy is about optimizing what already exists. But often, it’s about recognizing what is possible, both good and bad. Ninety-nine percent of an organization’s headcount is dedicated to operating the business, so it becomes the responsibility of the strategist to look beyond current trajectories (sales growth, immediate competition, profitability, and so on) to identify new pockets of growth, as well as unforeseen threats. One approach to this is “scenario planning”, wherein the strategist will extend observable trends into a longer-term timeframe, and then assemble them into 4-5 plausible (even if improbable) combinations that would meaningfully impact the businesses, and that call for a specific, proactive response.
- A good strategist is comprehensive: a classic mistake is to fail to consider options that simply don’t come to mind – to not think broadly enough. So classically trained strategists often ask themselves a question to test the completeness of a set of options, which is, “is it Mutually Exclusive and Collectively Exhaustive?” (or MECE, for short). What the MECE test does is it forces the strategist to think broadly enough that all primary possibilities are evaluated. For example, a strategist may investigate both pricing and volume to properly diagnose revenue trends, or may fully consider the tradeoffs of buying vs. licensing vs. building vs. partnering to deliver a new product on schedule. In any case, the goal is to not let the best option go unnoticed.
- A good strategist is visionary and bold: status quo, and even evolutionary moves, should always be among the options considered, but if the strategist doesn’t juxtapose some creative, extraordinary alternatives, then she’s taking the easy road. I sometimes say that if the “currency” of the Finance department is dollars, and people for HR, then the Strategy function should be trading in big ideas. How might the organization’s underutilized assets be deployed in new ways? What new markets make sense to penetrate? What new product lines could define the business’s direction in the next ten years? A good strategist will understand the tradeoffs between current and new pathways, and help the executive team maintain a healthy balance between the two.
- A good strategist is analytical: I sometimes notice people confusing “strategic thinker” with “analytical thinker”, and they are, in fact, two very different types. A strategic thinker, in my book, is someone who can synthesize multiple inputs (like competitive intelligence, customer research, and company capabilities) into meaningful implications and recommendations, whereas an analytical one will know how to shape raw data into actionable insights. One knows what questions to ask, and the other knows how to answer them. Your most versatile people, of course, will be capable of both. That said, not everyone is destined to be. There’s a reason that top strategy consulting firms staff “analyst” and “consultant” roles. Some successfully migrate from one to the other, and even to the lofty rank of partner, but very few do.
- A good strategist is, what I call, multivariate: meaning, she can pick apart a situation from multiple angles and perspectives. The proposed strategy may make the most economic sense, but do customers give you “permission” to expand into an adjacent growth area? Operationally, do you know how to deliver and support the new concept? Will your sales representatives welcome the new offering into their portfolio? Does Marketing know how to promote it? In other words, a good strategist will translate the theoretical down to the practical. A strategy that isn’t implementable, or that hasn’t considered the operational implications, isn’t worth much more than the PowerPoint it was presented on.
- A good strategist is persuasive: the more significant the prescribed change (assuming status quo is not the preferred path forward), the more challenging it will be to bring others on board. This is for good reason – change doesn’t come without risk and uncertainty. And unless your organization is sitting on top of a “burning platform” as Nokia’s newish CEO Stephen Elop famously said, it’s not easy to make a different path look better than the present one. An effective strategist, then, can’t declare victory at the Board meeting’s end. Results are the only reward that count, and those come only after decisive agreements have been made and resources (including dollars, people and executive oversight) have been committed. To earn that, a strategist must understand and adapt to the factual and emotional starting point of each decision maker, and the dynamics of how the organization makes decisions. Whether the successful effort is fact-based or an impassioned plea, whether it’s supported by a carefully scripted slide presentation or an open ended conversation, and whether it’s achieved through a carefully sequenced series of one-on-one discussions or a group meeting, all depends on an up-front decision making analysis.
- A good strategist is energetic (even if sleep deprived): Strategy is a thinking-oriented discipline, obviously, but that doesn’t mean it’s any less demanding on the body. In fact, I’ve heard that while the brain accounts for only 2% of a person’s body weight, it demands 20-30% of calories consumed! So if Strategy demands more of the brain’s capacity, it may also demand more energy. I can’t back that with science, but my point is that Strategy is demanding, even if only in terms of the time commitment required. The environment that shapes and impacts strategy is never at rest, and so a good strategist is “always on”. Consuming information. Interpreting data. Communicating insights. Shaping discussion and decisions that can have a material effect on the direction of an organization. Fielding questions from senior leaders looking for a balanced perspective on internal and external events. It’s equal parts thrilling and exhausting, and a good strategist will be prepared to make a real commitment to the proactive and reactive nature of the practice.
If a good strategist will excel at one or a few of these things, then a great strategist – or strategy team – will master them all. And so will a successful strategic initiative. Use this as a checklist the next time you’re filling a strategy position, or hiring a consulting firm, or managing a strategic initiative.