Sometimes, Maybe, Potentially: Lessons on Strategic Leadership
Over the past year, I’ve seen several teams whose strategy processes depart significantly from any of the various definitions of best practice. And when I say “strategy processes,” I don’t mean the fancy frameworks and advanced analytical techniques that you might learn in an MBA program or consulting firm; rather, it’s the basic blocking and tackling of asking on a regular basis: Where are we going? How are we doing? And what do we need to change to get there faster?
Yet, most of these teams had experienced, intelligent leaders who were driven to improve. So what’s causing the gap?
This conundrum motivated the most recent topic of my research sabbatical.
Before going further, it’s worth defining some terms. For me, strategy is basically “where we’re headed and how we’ll get there.” And an organization’s strategic process is all of its routines to come up with the strategy, revise it over time, and reorient the organization toward the strategy.
That said, after reading (and re-reading) a ton of books and numerous articles on strategy and strategy processes, I’m left with a couple of thoughts.
1. Strategy is actually easy. It’s people that are hard. Unfortunately, most of strategy is people.
I tell my son constantly how awesome it would be for our household if he’d learn how to use the potty—time savings, cost savings, and significantly greater team morale. But despite my airtight case, if he’s not enthused to carry out the strategy, it doesn’t matter how well-crafted the strategy argument is. Day after friggin’ day, we make no progress.
It’s the same in organizations.
Getting the strategic process right is about building shared understanding, motivating, and then ensuring alignment between the human beings of the organization—i.e., it’s all leadership. Put another way, strategy is hard because leadership is hard.
Harvard Business School professor Cynthia Montgomery put this well in The Strategist:
“Many leaders today do not understand the ongoing, intimate connection between leadership and strategy. These two aspects of what leaders do, once tightly linked, have grown apart. Now specialists help managers analyze their industries and position their businesses for competitive advantage, and strategy has become largely a job for experts, or something confined to an annual planning process. In this view, once a strategy has been identified, and the next steps specified, the job of the strategist is finished. [...] But this is not so. What’s been forgotten is that strategy is not a destination or a solution. It’s not a problem to be solved and settled. It’s a journey. It needs continuous, not intermittent, leadership.”
2. There’s probably not a “best practice.” Or if there is, no one really knows.
For starters, organizations operate in vastly different contexts, so what’s considered “good” strategy varies. And even in the same context, A.G. Lafley (the former CEO of P&G) and Roger Martin write in Playing to Win: “There are multiple ways to win in almost any industry.”
Perhaps my favorite view on this comes from one of my business school professors, Jeffrey Pfeffer, who seems to be a professional cynic. In Hard Facts, Dangerous Half-Truths, & Total Nonsense, Pfeffer and Robert Sutton write: “Those of us who hawk business knowledge need to come clean. We need to deny that we have magic answers.”
They go on to describe how the business literature offers seemingly contradictory prescriptions for success (e.g., focus...but not so much that you don’t innovate, be inclusive...but win the war for talent) and is filled with flawed research methods.
For example, take In Search of Excellence: Lessons from America's Best-Run Companies by Tom Peters and Robert Waterman. It’s one of the best-selling business books of all time. Yet, when academics Michael Hitt and Duane Ireland compared the “best-run” companies to a sample of Fortune 1000 companies, they found few, if any, differences in characteristics or performance between the groups. They write: “The research presented herein casts doubt as to whether the firms used as the basis for the Peters and Waterman book and for sequels it has spawned are actually ‘excellent.’”
Moreover, it doesn’t take one long to find literature—even from leading scholars—that recommends supposedly enduring lessons from companies that have since failed. Even Hard Facts contains one of these. The authors write:
“Kodak and Polaroid are perfect examples. Both had impressive R&D efforts and people who were deeply knowledgeable about digital photography, but Kodak’s slowness to act on that knowledge has deeply wounded the company, and Polaroid’s more pronounced inability to capitalize on its deep knowledge of digital photography ultimately led to its demise.”
That’s meant to be a cautionary tale of being bound by existing customers and processes and failing to innovate as a result. Of course, the book was published in 2006, a mere year before the iPhone made digital photography itself obsolete, so maybe those companies were right not to attempt the herculean task of building a whole new capability.
It’s not that the popular strategy recommendations you’ve heard are necessarily wrong; it’s more that strategy is so complex that there’s no single formula for success. Does that cool idea I read about in Harvard Business Review work? Sometimes. Will it work for my team or organization? Maybe.
Hitt and Ireland write: “Simple solutions to complex problems are enticing; however, these simple solutions rarely provide effective long-term results.” Therefore, they advise that managers should be skeptical of unidimensional solutions and suggest anticipating complexity when introducing any new idea into an organization.
Having established that no one knows what they’re talking about, my plan is to share some more insights from my research on effective strategy and process over the coming weeks. But these won’t be solutions, just things that might help.
Potentially.
Or, as Pfeffer and Sutton put it: “We need to confess that we are just suggesting ideas that might make managers’ hard jobs a bit easier.”