Few management team activities are more important than those focused on strategy.

Few management team activities are more frustrating than those focused on strategy.

Let’s explore the challenges most management teams encounter and share guidance on improving the quality and usefulness of these critical discussions.

Where Management Team Strategy Initiatives Derail:

1. Unclear expectations for strategy discussions

Managers show up to the once-a-year strategy offsite believing they need to sound ‘strategic’, whatever that is. Remember, most senior managers are laser-focused on their area of responsibility and running fast to do their part. Asking them to jump tracks, elevate their altitude, look at the larger picture, and consider big decisions in the face of uncertainty is unrealistic.

Effective management teams maintain a running dialog on strategy, including exploring external forces, identifying potential risks and emerging opportunities, and regularly engaging on these issues. They build a routine for discussing the future and identifying the decisions they face. Strategy is a process, not an event!

2. Conflating operations and operating decisions with strategy.

Everyone is comfortable talking the language of running the business and too often, strategic topics and questions quickly devolve to operating discussions.

Disciplined management teams understand the need to get beyond the gravitational pull of operations consistently and develop a cadence, vocabulary, and set of tools that keep them looking outward and forward. One management team assigns a Strategy Discussion Enforcer to call out the reversion to operations. Another makes sure the violator buys lunch for the team. 

3. Not having a clear view of the problem(s) to be solved with strategy.

Every senior manager has a unique interpretation of what a strategy is supposed to be. It’s too bad everyone’s definitions vary. Without clarity on the issues to be covered or the problem(s) to be solved, strategy discussions end up as random topic discussions tinged with a lot of unproductive debate.

I encourage management teams to get on the same page with what they mean when discussing strategy. Some views different clients have adopted:

  • Using or creating strength to exploit competitor weaknesses in targeted markets.
  • Creating clarity for the current situation and identifying the possible paths forward.
  • Gauging market trends and forces to determine where we can use our abilities to serve current/targeted customers best.
  • Identifying the decisions we must make now to create a successful future.
  • How will we reset our business to a future that is shaping up to be very different than our past?

I like creating simple (but not simplistic) views of the strategy work facing the management team. What are we focusing on here? What are we supposed to be talking about now?

4. No one knows how they’re supposed to create a strategy.

I rankle at the template-type strategies that so many strategy facilitators prescribe. Strategy is developed through exploration and dialog. The output isn’t a pretty slide-deck that sounds good but has no meaning. The strategy is a set of fundamental decisions on where to invest, what to do and what not to do. And we all need help ensuring that we’re talking about the right topics.

While many great resources are available on the topic, the most straightforward and powerful framework I’ve yet encountered for strategy work comes from Richard Rumelt and his ‘Kernel of the strategy.’ Rumelt suggests that every coherent strategy has three components: a diagnosis, a guiding approach, and a set of coherent actions.

The diagnosis is the outcome of assessing the organization’s or unit’s current situation. In a five-day strategy engagement, I expect three days to be invested in developing a clear diagnosis that considers external and internal factors.

The guiding approach suggests what should be done based on the diagnosis. It frames the firm’s response.

Coherent actions are the key decisions and actions that are essential to realize the guiding approach.

There are many tools and a few great playbooks (e.g. Survive, Reset, Thrive by Rebecca Homkes, Escape Velocity by Geoffrey Moore), yet the kernel approach makes strategy tangible for management teams. (I also love Your strategy needs a strategy and Play to Win as resources to help us think.)

5. Getting stuck staring  in their collective rear-view mirrors

The most dangerous misfire is for a management team to fail to move their view outside the metaphoric four walls of their firm and industry. They develop what Prahalad and Bettis referenced as dominant logic—the prevailing mental maps of management team members based on where they’ve been and how they’ve succeeded historically. This dominant logic pushes them to make decisions based on what worked, not work in a changed environment.

The right approach is for management teams to spend much time and energy striving to understand what’s changing and how to leverage those changes. Involve customers and ecosystem partners in strategy discussions. Assess macro trends and strive to understand where the risks are for the current business model. Look at advancements in far-away markets and challenge strategy team members to strive to identify hypotheses about how these advancements might help them and their customers.

But wait, there’s more:

The list above of management team misfires with strategy is incomplete. Others include:

  • Focusing on what to do without creating a clear diagnosis.
  • Not creating a diverse coalition of senior management, individual contributors, plus external voices.
  • Not building an execution layer into the organization’s operating model—with the processes and metrics essential for bringing strategy to life, gauging progress, capturing insights, and refining future activities. The lack of an execution layer means that strategy work will fade in the daily race of operations.
  • Not ensuring that every individual in an organization understands how their work connects to the firm’s strategy.
  • Mismeasuring strategic initiatives. When seeking to do new things, it’s imperative not to use traditional operating metrics, particularly in the nurturing-new-activities phase.

These and others are great topics for another day.

The Bottom Line for Now:

If you’re part of a team accountable for strategy, a great place to start strengthening the quality of the discussions and work is to get on the same page about what you are trying to achieve. See the examples above. Then run, don’t walk to assessing your current situation given the emerging market factors and forces. Labor to create a precise diagnosis. Only then can you move on to talking about how you should respond.

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