In a recent conversation, after I hard mentioned clarity of strategy a number of times, I was asked if strategic clarity was important to me. My answer was an unequivocal yes. Here’s why it should be yours too.
Strategy Sets Goals and Boundaries
In a fast changing and dynamic world there can be a temptation to see strategy as a bit of a luxury. We are all so busy coping who has time for strategy. Especially if all the outcomes are is that big fat document that is expensive to produce, full of ambitions and that will sit on the shelf unused until the next time a document is required.
Good strategy is about choices. These are the choices that set the boundaries for all the change and adaptation that happens in organisations. Strategy has often got a bad name because it has been confused with financial planning, a meticulous set of forecasts and numbers over three to five years that often constrains thinking rather than opens it up. A financial plan can flow from a strategy but plans change. The plan is not the strategy.
Lafley and Martin’s Playing to Win is a great model for the choices that need to be made in strategy stretching from where to play, how to win and through to the systems and capabilities required for success. Better strategy makes these hard decisions through a process of iteration and then lets the insights of that process guide execution. Most importantly, a clear strategy tells you what not to do. Those guardrails become very important when change happens fast, when things don’t work as expected and when you have to actually do the work.
Making choices as to ambition and goals upfront is also important because execution is hard. The bumps along the road always send signals to slow down or to lower your ambition. The clarity that more is required brings about the stretch of effort, the resilience, and the innovation required to deliver more. Without the challenge of goals you will inevitably deliver less.
Alignment & Capability
I began the Value Maturity Model with Connection because alignment and engagement around strategy and goals are fundamental issues that are too often missed. The excel model of financials approach to strategic planning forgets that the strategy has to be realised by human beings. Those human beings perform better individually and work better together as teams and across teams when there are clear shared goals to understand, to align to and to organise around.
Execution requires trade-offs, adaptations and change. When everyone understands the goals and is working towards the same view of the business, changes are easier to communication and negotiate, less confusing and easier to implement. Alignment is an oft-forgotten part of the task of middle management and rarely to the benefit of organisational performance.
The other commonly ignored part of strategy is capability. Without the capabilities to achieve the strategy, execution is a pipe dream. Investments and timelines need to line up with the development of capability. I have seen too many financial models fail to capture the trajectory of performance when they assume an immediate uptick as a result of strategy with no time for investment, capability build and learning.
Confusion on goals or strategy causes waste. The time spent navigating ambiguity is to the detriment of performance. Investment of time, teams or money into areas that don’t deliver because of confusion can undermine the resources available to succeed. Starting out in the right direction together is much less costly and exhausting than spending time herding people back onto the right path.
Because no strategy or plan is executed as expected it is also the clarity of strategy that helps you manage performance. The governance question is not whether you are tracking to the numbers in a spreadsheet. Those numbers were just guesses. The key issue is are the choices you made in the strategy playing out. Whether assumptions hold and hypotheses are being validated matters much more than the percentage to plan in the current quarter. The latter can be actively misleading in the early years before the strategy begins to ramp.
Strategic clarity matters because strategy is much more than powerpoint and financial models. Strategy defines the goals and choices you want everyone to align around and the capabilities you are looking to build to achieve success. Clear strategy helps you learn what needs to change for your organisation to succeed. Focus on the making the hard choices required to set a strategy and then spend time reinforcing that strategy across the organisation. The rewards of clarity and alignment are exceptional success.
