On occasion my family will embark on a family-pizza-night adventure. It's quite the team-building exercise since most of the places we frequent serve pizza sized to feed the entire family rather than the four individuals who make up our clan. The "team building" part of the program comes in deciding what type of pizza to order - a process we typically approach in a highly-collaborative, accommodating manner. At least we try. But too often we all settle on some sort of Frankenstein-like combination of ingredients that results in no one being thrilled with our pizza night adventure. Sometimes, Dad just needs to say "NO! We are not having anchovies and pineapples on our pizza."
And so it is with strategy development - at least for some organizations. Especially if the corporate culture is highly-collaborative, accommodating of individual input and encourages the avoidance of conflict. In our experience, when every leader has creative license in strategy development, the resulting plan is more like a Frankenstein creature than a cohesive strategy. Here are some example results of an overly collaborative, everyone has an equal voice strategy process:
- Siloed strategies. This is where the corporate strategy becomes a reflection of what individual business units or functions want to have happen with the individual business they lead. The vice president of retail will want the strategy to reflect investment in site expansion and marketing while the VP of eCommerce will want investments in the company's on-line presence. When both are accommodated individually, the likelihood of the two strategies working together becomes limited.
- Shiny object syndrome. When asked to think about strategy, it is natural for leaders to think about things that are new. New products, new services, new markets. After all, those are typically seen as more exciting than whatever it is we might be doing as part of our current operation. But new is not always better. As Chris Zook outlines in Profit from the Core, new things have very low probabilities of creating shareholder value. In fact, he opines that every leader should constantly be thinking that within their existing core business lies the greatest opportunity for value creation.
- The prism effect. Just as a prism diffuses a beam of light, overly-collaborative strategy development can scatter an organization's energy and spread investment dollars like peanut butter. The result is that no one component of the strategy is provided enough oxygen to keep it alive.
- The design for everyone trap. In one of our favorite Dilbert cartoons by Scott Adams, the marketing leader walks into the boss and says this: "I have some bad news. The marketing survey on our new product that said "everyone wants one" had a typo. It should have read Avery Wong wants one. Worse yet, I called Mr. Wong. He no longer wants it." Funny. But for anyone who has experienced this in product development, it can be a painful reminder. Matthew Frederick emphasizes the point further in his book 101 Things I Learned in Architecture School. In the book, he reminds us that if you design for all, no one will come.
Please know that we are not in any way saying that a broad group of leaders should not have a voice in the strategy. In fact, broad input in the strategy development process is extremely valuable. But there is a big difference between input and creative license. The secret comes in how the input is provided, considered, vetted, judged and incorporated into the corporate strategy. So how do you avoid building a Frankenstein strategy that drives wasted investment, lack of focus and reduced competitiveness? Based on our experience with hundreds of companies, here is a suggested recipe for success:
- Identify and mobilize the true strategic thinkers. Not everyone thinks strategically. Choosing whom to involve should be driven not only by level in the organization, but also by who can provide truly objective, strategic input.
- Negotiate process before content. That is to say, explaining what parts of the process are going to constitute input and in which steps decisions will get made (and by whom) is critical.
- Provide structure for the input. When gathering input, simply asking questions in a structured way can make a big difference. Showing a large group a draft Mission or Vision statement and asking, "What do you think?" is a recipe for disaster. Instead, ask a group, "What do you like about this draft and what do you suggest we consider changing?" Or, "How would our investors react to this?"
- Decide, build consensus, then run. Buy-in is necessary for execution. We like to use the word consensus, but as some have pointed out that word can sometimes be wrongly equated with 100% agreement. When we use the word, we mean getting folks on the same page with what has been decided in a way that they can say "I might have gone at it a bit differently, but yes, I can support that."
As a final note, we believe the strategy offsite and related board and leader meetings play a key role in an effective strategy development process. Making sure those meetings are well planned as part of the overall process is critical. For more on how to make your strategy offsite effective, see our blog entitled Don't Settle for Another Failed Offsite Strategy Meeting.
In all, balancing the right degree of input with decisiveness about the direction and strategy for your organization is difficult. We'd love to hear thoughts on how your executive team has tackled strategy development to optimize the benefits of broad leader input without sacrificing focused progress.