I read recently that less than one third of businesses undertake regular customer research. They don’t feel they have the time or the budget it seems to wait for answers, and they don’t see the value in doing so. They prefer to trust their own perceptions and experiences. They’re drawn to action plans.
So, as this push towards “instinctive marketing” takes hold, and pressure on strategists mounts to ‘do something’, how should those responsible for business strategy react and what changes if any should they make to how they work and who they work with?
The rush to tactics can be immensely frustrating. Hilton Barbour’s glorious post on Bright Shiny Object strategy has played out for real for me on too many occasions, with marketers who should have known better deciding that the strategy to help get them out of the quandary they are in was “just going to be too slow”.
The solution? An action plan. Something simple. A channel. A campaign. Something they’ve read about.
And therein lies the dilemma. Slowing things down, and forcing marketers to confront the reality that succeeding today is complex, multi-layered and nuanced, is dismissed as “blackhatting”. Engaging senior leaders in what is really required to shift their brands forward can be difficult. Under pressure from executives to bring home results, strategy can quickly be seen as an indulgence that the company cannot afford.
Bright Shiny Action Plans
Sadly, I fear Hilton’s Bright Shiny Object Syndrome is a subset of a deeper and even more disappointing temptation – “Bright Shiny Action Plans”. The wish to do something, anything, right now … on the grounds that some action is better than no action.
Marketers have lulled themselves into believing that thinking busy is more important than busy thinking.
The dilemma for strategists is always that strategy seems to take so much time, whereas action plans can start now. Actions keep people occupied. They give everyone something to do with their hands. As marketers have become more and more responsible for demand generation, they have also allowed themselves to be lulled into a belief that thinking busy is more important than busy thinking. And the proliferation of media has fed that perception that ‘we just need to get out there’ before others do.
The problem for many brands though is that once they get on the tactical merry-go-round it’s very hard to get off. The money may come in at least initially, but over time the brand erodes and margin dies out of sight and out of mind because everyone’s too busy with their action plans to notice. Think of the number of companies you know that were/are busy going bankrupt.
Managing actions at the expense of imagining answers
This may be about a lot more than impatience. Nicholas Ind argues that a key issue confronting companies today is that it’s hard to find the right people to deliver a strategy effectively; that in today’s business environment there are too few leaders with the interpretative skills needed to think beyond action plans and bring effective strategy alive. In fact, he cites research amongst 700 senior executives that showed only 8 per cent said top leaders excelled at strategy and execution.
Thinking and action: the myth of different disciplines
It’s now common practice to separate strategy from execution and to see the two as quite different disciplines – with ‘planners’ saying that every company needs a view of its future to work towards, and ‘pragmatists’ insisting that it’s actually the people doing the work that are the ones creating the value. However, argue Martin Reeves and Rodolphe Charme di Carlo, “Execution should be as varied, as thoughtful, as subtle, as diverse and as intertwined with strategy as is necessary to get the job done, and that will vary according to the specific challenge at hand. In short, your execution needs a strategy.”
When the two are not well aligned, eight things can happen:
- People get lost in the paperwork of strategy, and in attempting to bring it to life can easily confuse busyness with effectiveness. The key skill is the ability to really understand the strategic intent and to focus action plans on achieving the priorities that move the organisation closer to that goal – and no others.
- Results matter, but in quantifying what needs to get done, it’s easy to pursue numbers and to somehow expect those to magically transform into meaningful outcomes.
- A strategy can be too rigid for its own good, leaving no room for interpretation or variance, even if such changes would help the organisation edge closer to what the strategy intended.
- The mistakes made in interpreting the strategy are not evaluated for their potential, and so valuable insights are lost.
- The steps leading to the achievement of the strategy can become goals in themselves, diverting resources and distracting managers and teams from what was originally intended.
- The pursuit of a strategy can, if it is not thought through, generate actions and attitudes along the way that jeopardise the success of the strategy.
- Execution is too easily seen as one thing whereas, the authors point out, “different strategic environments require different approaches to strategy and execution”. There is no one action plan for everyone.
- Pragmatism can make it hard for people to abandon what they know to pursue something that they don’t see as real. Polaroid, for example, pioneered digital photography, but couldn’t let go of its current technology because it was the core of their financial model. The critical alignment for companies looking to pursue innovative strategy is that they need to embrace both physical barriers and mental barriers, and the combined inertia of these two forces combined. If you’re challenging an incumbent that inertia works in your favour. If you’re the defender, those barriers can prevent you doing what needs to be done to bring the strategy to life – so you either do less, or nothing.
Strategy as a living hypothesis
The problem is not one way. If organisations can believe too much in the power of execution, they can also become far too invested for their own good in the strategy they have agreed. In fact, Amy Edmundson of Harvard Business School and Paul Verdin of the Solvay Brussels School of Economics and Management argue that when companies fail to adjust their strategy based on new information provided by experience, things can go badly pear-shaped.
Wells Fargo’s strategy of cross-selling was distinctive and made sense to achieve the bank’s objectives. But when customers no longer needed new products, but management still demanded that new opportunities be created, the easiest way out was to set up false accounts so that everyone could keep hitting their numbers. The strategy wasn’t questioned. Instead it was insisted upon, which led to action plans that looked at no alternatives and no-one daring to have the straight conversation about what was now happening on the frontline.
Volkswagen set its sights on being the largest car company in the world, which required it to make significant in-roads into the US market. To achieve that, VW formulated a strategy of developing clean-diesel vehicles. With the company failing to meet the standards required to be that clean, and executives refusing to accept the feedback they were receiving that the technology could do what they had now come to expect it to do, it was only a matter of time before engineers sought to cheat the system.
To fix this pursuit of strategy at the expense of real market in-roads, Edmundson and Verdin argue, companies should look to treat strategy as a living hypothesis, and to test it through action to ensure it remains valid. Such an approach would enable senior managers to treat data as proof points for whether the strategy is working rather than assuming that ‘bad results’ are directly aligned with bad execution and performance.
“Companies that fuse strategy and execution, continually making adjustments and periodic dramatic pivots, demonstrate what strategy as learning can look like in action … closing the gap between strategy and execution may not be about better execution after all, but rather about better learning — about more dialogue between strategy and operations, a greater flow of information from customers to executives, and more experiments. In today’s fast-paced world, strategy as learning must go hand in hand with execution as learning — bypassing the idea that either a strategy or the execution is flawed — to recognize that both are necessarily flawed and both are valuable sources of learning, improvement, and reinvention.”
Here’s an example of bringing it all together:
The role of culture in all of this
When Ind studied Adidas, he concluded that organisations often lack the alignments internally to fuse all the disciplines that enable people to consistently work together to create real brand value with multiple stakeholders. However, he noted, when thinking and doing are powerfully aligned through commitment and engagement at an organisational level, the results can be very encouraging. In the case of Adidas, Ind says, worldwide revenues grew by 18% in 2016 and net income by 21%, while in the key North American territory sales grew by 31% in the first quarter of 2017.
So maybe Peter Drucker was wrong. Culture should not eat strategy for lunch, because if the two aren’t eating lunch together, the best opportunities for improvement are going to be missed. It’s curious I think that just as companies have separated out strategy and delivery, they have also put culture in a box of its own – and yet what seems clear from the thinking and results above is that unless managers have the confidence and skills to interpret a strategy, they are more likely to undervalue it, and unless the people who are responsible for delivering can have open and straight conversations about the real impacts of what they are tasked with delivering, strategy and execution will continue to lock horns.
How long have you really got?
I’m sure at this point some of you may be asking whether all of this is just going to make a bad problem worse. At the very time that strategists are being told to get their thinking into market further, isn’t this idea of aligning strategy, culture and execution only going to take up more time?
That’s highly likely. But just as organisations need to forge closer links between strategy, execution and culture, so they also need to disrupt their addiction to immediacy. “How long have we got to change?” is a much more important consideration than “What else can we do right now?” Faced with the pressure to do something today, here are three questions that may help slow impulsiveness, help encourage planning beyond now and give everyone a context within which to make more considered and integrated strategic decisions.
How long till the money runs out? This is important because it may well be that some stop-gap tactics need to be used to boost earnings. However, if you are going to use such tactics, be very clear about where, when and how they will be used, how they will be monitored and how they will correlate with where the company needs to get to. If you’re using tactics to buy time, it’s vital you know exactly how much time you need to be buying … and to work to that timeframe.
How long till the goodwill runs out? What’s got the company in the slump it’s in right now? Because more of the same is simply going to accelerate decay not fix it. To borrow a thought from the Heath Brothers, what are the small wins you can put in place right now that will convince consumers things are changing for the better? While most companies focus on the money, I actually think this aspect is equally important. If people are not inclined to like you, they’re not going to enjoy more of you and they’re not going to believe, or be interested in finding out more, about what’s going on over at your brand.
How long till the market runs out? If you’re in a market with strong organic growth, you’ll have some leeway around action time. Often companies aren’t in such a market of course. By the time they recognise something needs to be done, too much has already happened. I’m always amazed at how suddenly people come to this realisation. Their immediate reaction of course is to match the urgency of their realisation with rapidity of reaction. In reality, few markets break in my experience. They evolve, they decline – but they seldom just stop. Strategy is critical to understanding where your brand needs to get to in order to hit the new on-ramp. The question for “now” is how can you better meet changing market demand and how you can prepare customers for changes that lie ahead?