What you're missing by carving out strategy from the top
By Jennifer Riel and Stefanie Schram
Strategy is an old concept, but a fairly recent business phenomenon. The concept of strategy – a set of choices that position you to win against your competition – is as old as sport, as old as warfare, as old as one human being plotting out how to defeat another.
But business came relatively late to the strategy game. As late as the mid-20th century, most of what we now call strategy was filed under the much broader label of "management."
Strategy is an old concept, but a fairly recent business phenomenon. The concept of strategy – a set of choices that position you to win against your competition – is as old as sport, as old as warfare, as old as one human being plotting out how to defeat another. But business came relatively late to the strategy game. As late as the mid-20th century, most of what we now call strategy was filed under the much broader label of "management."
Maybe that wasn't such a bad thing. As strategy has become a defined discipline, its practice in business has become ever more specialized, cordoned off in executive offices, in corporate strategy departments and in high-end consulting firms. From a leadership perspective, this may be the very worst structure imaginable for producing truly effective strategy and, especially, for developing strategic thinking across the organization.
Yes, great leaders are great strategists: Jack Welsh at General Electric, Steve Jobs at Apple, Howard Schultz at Starbucks. These are leaders who thoughtfully crafted winning strategies for their organizations. But if strategic thinking is solely the purview of the C-suite, rather than an organizational capability, a company's success will depend entirely on who is sitting in the CEO's seat.
That's a risky way to proceed. An organization's top leaders should be responsible for crafting the overall strategy for the business. But they are equally responsible for building the strategic thinking capabilities of the rest of the organization.
Often, in organizations, we create structures and processes that make truly collaborative strategic thinking really difficult. The annual strategy process, for instance, is typically designed to minimize productive discussion. Individuals come to their leaders with polished pitches, bulletproof presentations that simply requires sign-off. The goal is to get the “yes” and questions are seen as obstacles to be overcome. Coming into the room with questions of your own or with a desire to explore the possibilities is seen as wishy-washy or weak.
This requires a reframe. The annual strategy process is the perfect opportunity to think together on the toughest challenges facing the organization. This can happen, if the expectations shift on both sides. A more productive strategy process focuses on development of thinking, rather than review of choices. To create a strategy dialogue, follow the lead of A.G. Lafley, CEO of Procter & Gamble. Rather than use annual strategy reviews to listen to a lengthy presentation, he reviews materials in advance and sends back a list of questions he'd like to explore with the team in real time in the meeting. The meetings themselves focus on the questions; a great outcome is one in which the team's thinking is advanced in real time, rather than accepted as final.
Strategic thinking is a core leadership capability. All too often, we leave its development to chance, and fail to take advantage of opportunities to learn from leaders about how they think through strategic choices. Think again about the definition of strategy — a set of choices that position you to win against your competition. Who in the organization is exempt from making those kinds of choices? No-one. Each of us, in our own roles, must make choices about how to win with customers, and against competition, every day. Part of the role of a leader is to help prepare your team to make those choices.
Jennifer Riel and Stefanie Schram work at Rotman School of Management, University of Toronto where they teach design and innovation, including a one-day workshop, Playing to Win: How Strategy Really Works, on creating winning strategy. The workshop is being offered on October 4, 2018. For more information visit: www.rotmanexecutive.com/playingtowin
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