Keeping Strategy Simple

Continuing the series on strategic leadership, another theme that emerges in the strategy literature is the benefit of simplicity and focus.

For example, in In Search of Excellence, Tom Peters and Robert Waterman write: “One of the key attributes of the excellent companies is that they have realized the importance of keeping things simple despite overwhelming genuine pressures to complicate things.”

The authors’ specific focus in the point above is about having simple organizational structures, but they also find that the leading companies they profiled had simplified priorities. They write: “the excellent companies focus on only a few key business values, and a few objectives. The focus on a few key values lets everyone know what’s important, so there is simply less need for daily instructions (i.e., daily short-term memory overload).”

In Playing to Win, A.G. Lafley and Roger Martin similarly argue for simplicity when choosing what organizational capabilities to build. They write: “Companies can be good at a lot of things. But there are a smaller number of activities that together create distinctiveness….”

HBS professor Zeynep Ton’s research suggests that simplicity in scope can create a virtuous cycle of performance. She writes in The Good Jobs Strategy that model retailers offer less than their competitors. “Offering less makes operations more efficient and accurate, which in turn improves customer service and hence sales. Since improving operations helps employees do a better job—sometimes in ways the customers can see with their own eyes—employees feel greater pride and joy in their work. [...] This, in turn, contributes to greater dedication and lower turnover, both of which are good for service, sales, profits, growth, continuous improvement, and return on investment.”

HBS professor Frances Frei and scholar Anne Morriss extend this point to focusing a company’s product or service offerings. In Unleashed, they write: “Your first job as a strategist is to be better than your competitors at the things that matter most to your customers. [...] A major lesson of our decade of research on service companies...is that organizations that resist and try to be great at everything usually end up in a state of ‘exhausted mediocrity.’”

For his Master’s thesis, former head of the U.S. Special Operations Command, Admiral William McRaven, wrote an exploration of what allows a smaller force to defeat a larger one when the odds are against them. One of the six components: a simple plan that limits “the number of tactical objectives to only those that are vital.” 

Aside from the military-specific benefits of having a small number of objectives, the core reason to focus on a simple plan has to do with the human dynamic. The more things people need to accomplish, the more their attention is divided. And the more moving pieces, the greater the coordination burden. 

As anyone who’s prepared Thanksgiving dinner knows, adding 20 more people is way less complex than figuring out how to get just one more dish ready at the same time as everything else. 

So simplify, simplify, simplify. Fair enough. 

But McRaven also writes: “Simplicity is the most crucial, and yet sometimes the most difficult principle, with which to comply.”

So why is simplicity so hard for organizations?

Some ideas:

Adding “just one more” seems harmless.

It’s easy to say we’re committed to focus and simplicity, but it’s harder to follow in practice. This is especially true if the “just one more” activity we’re adding to our plates comes from a positive motivation, like What else can we do for customers? And as Leidy Klotz showed in Subtract, we’re wired to feel more competent when we’re doing more. 

Moreover, performance management systems may also provide an incentive for leaders to grow and to add more. After all, one gets promoted by (looking like they’re) doing more than the next person, not by strategically doing less. 

What we miss, however, in that expansion of activity is that it comes with coordination costs that slow down existing activity. And if the “one more” uses up our collective slack, that can create other negative consequences.

It looks “smart” to have a complicated plan.

In The Knowing-Doing Gap, professors Jeffrey Pfeffer and Robert Sutton write that when results aren’t immediately obvious, people decide who’s good based on who sounds smart. Therefore, they write: “Appearing smart is mostly accomplished by sounding smart; being confident, articulate, eloquent, and filled with interesting information and ideas; and having a good vocabulary.” In that sense, having a simple, focused plan goes in the opposite direction of the incentives.

Peters and Waterman, in In Search of Excellence, cited their “smart-dumb rule” for why managers come up with overly complex plans. “Many of today’s managers—MBA-trained and the like—may be a little bit too smart for their own good. The smart ones are the ones who shift direction all the time, based upon the latest output from the expected value equation. The ones who juggle hundred-variable models with facility; the ones who design complicated incentive systems; the ones who wire up matrix structures. The ones who have 200-page strategic plans and 500-page market requirement documents that are but step one in product development exercises.”

I’ve also talked to nonprofit leaders who claim that coming up with a new strategic plan—almost always with something new to do—is what it takes to attract funders. No one is interested in a “we’re just going to keep doing what we’re doing” message. 

Choosing simplicity means saying “no” to others.

Frei and Morriss call the decisions to focus one’s strategy—deciding to be great at a limited number of things—“dare to be bad” decisions. It’s daring both because one has to have faith that the tradeoff really has value and because it’s saying no to customers. They write: “These kinds of decisions take real courage, particularly for the leaders among us who do not like to let anyone down.”

Beyond that, simplicity also sometimes means telling some team members what they’re working on isn’t a priority. It’s easier to let them continue that activity, regardless of the value. 

Simplicity may also mean choosing between powerful internal constituencies (e.g., which business to invest in), even though both have reasonable cases.

In the nonprofit sector, simplicity may mean saying “no” to funders or board members. 

Basically, implementing simplicity and focus means having other people dislike you. And this harkens back to my takeaway from two weeks ago: Strategy is actually easy. It’s people that are hard. Unfortunately, most of strategy is people. 

So what’s the solution?

There aren’t easy ones, for sure!

There are ways that organizations seek to tactically prioritize activity, but I won’t focus on those here. 

Instead, from my reading of the literature, what seems most important is not the systems of focus and simplicity, but building the common belief in the benefits of focus and simplicity. Strategic leaders will always be fighting against the tendencies to do more, unless everyone authentically believes in the power of doing so. 

Surely, having routines that support focus and simplicity are part of building that belief—i.e., it’s just what we do here—but building the belief likely requires an ongoing campaign to win hearts.