Good leaders give good answers - great leaders ask the right questions
Yet most organizations spend enormous effort debating answers while hardly questioning whether they are asking the right questions in the first place. That may be the single biggest reason why so many strategies fail.
Strategy is important … and so is culture
“Culture eats strategy for breakfast” is a famous quote for the importance of organizations’ behavioural framework over their business strategies. I agree to disagree. Pitting culture against strategy is like discussing whether your left shoe is more important than your right. Organizational culture and business strategy should be regarded more like the Yin and Yang, since in a best case scenario they complement each other and enable a virtuous cycle. The world’s greatest cooks will fail to satisfy customers with bad recipes and vice versa. The question is not which one is more important, but how to create a great, durable culture and create consistently good strategies over the long run. Since organizational culture is a result of repeated effective behaviour of doing the right things over years and years, you first need to have a good strategy, how to do the right things.
Good strategies determine where organizations are headed. A good culture determines whether it will arrive there.
Therefore this is where I suggest we start: How can we create a good strategy?
The value of a good strategy is key for an organization's success
The untold truth about the strategy business is that there is no universally applicable playbook or how-to-documentation for creating good strategies. We have all seen slick presentations with generic strategies to “deliver unique value to our customers” and “achieve sustainable growth” while being “the first choice for investors, employees and customers”. A good measure for a strategy is the McDonald’s test: If you left your strategy on the table of a McDonald’s and someone picked it up, would your business be in any trouble or not? If nobody is losing any sleep over the leak, your strategy might not be worth its salt. In this case you might consider putting some more thought into it.
Nothing can compensate for a bad strategy
Over the years I have witnessed a widespread fallacy in organizations that even a bad strategy can be compensated along the chain of command by good decisions based on common sense, farsighted leadership and smart management or exceptional engagement of employees leading to operational excellence. This conviction however can be challenged by three simple questions:
How do you expect your organization to make good decisions to compensate for a lack of direction and possibly conflicting goals?
Where do you invest your resources if the priorities are unclear and your organization is hardly able to operate efficiently, let alone adapt effectively?
Why would any organization take bold initiative if there is no clear vision of how success looks like?
Since a good strategy is important and a bad strategy has severe consequences, leaders should spend the necessary effort to get their strategy right before sharing it across the organization.
To strategize effectively is to ask right rather than to answer right
Organizations often spend enormous effort debating answers while hardly questioning whether they are asking the right questions in the first place. Good strategies are based on answering a handful of the most important “guiding questions” an organization needs to get right. Finding these questions takes effort in itself. Here are a few ideas for “guiding questions”:
What difference do we want to make as an organization?
What customers do we want to serve - and what customers do we not?
What are our key resources and capabilities - and what are we willing to sacrifice for them?
How do we acquire key resources and capabilities - how do we adapt/learn as an organization?
What should we stop doing?
Looking back in 5 years, what would we regret not having started?
Who are our most important business partners - and who are not?
Answers age - questions don’t
Finding the answers to your guiding questions will give you and your teams a good idea of where your focus and priorities will unfold. However, before you jump to any conclusions and answer the questions on your own, first listen. Listen to your peers, listen to the experts in your organization, to your customers and anyone, who will be part of your new strategy. Strategy creation is not a purely democratic process. However it is a purely creative process. The quality of the strategy will largely depend on the diversity of perspectives that shaped it.
Another great perk of your “guiding questions” is organizational resilience: While the answers might differ depending on time, business unit, region, market, etc., effective, lasting questions will still be a reliable compass for strategy alignment throughout your organization.
The Litmus-test for your Strategy
Now that you have a first draft of your new strategy, you’re almost good to go to market and communicate your new strategy across your channels. Before you do, do a quick check. The final exercise to gauge the quality of your strategy could be this, in case you don’t want to take your chances at a random McDonald’s restaurant: Ask yourself: What would happen if you replaced your company’s name or logo from the strategy. Would it still make sense for your competitor to put it into practice? If so it is not yet sufficiently differentiated, hence you’re not done yet. Iterate until your strategy is specific enough and sounds implausible or outright absurd if you put in a competitor’s name.
Good Strategy in a Nutshell
A good strategy should not merely tell people what to do. It should teach them how to think - how to identify the most essential questions. Great strategic questions continue creating good decisions long after today's answers have become obsolete and demand a review.
What is the single most strategic question that you’ve asked yourself recently?
#notestomyfutureme #leadership #strategy #culture #guidingquestions
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