Many of my peer conversations and kick-off discussions with clients circle back to a strategy not delivering expected results. Traditional strategy development is not a simple process and usually fed top-down to staff eager for direction in their daily lives at work. The sticking point is that no matter how great the strategy is, if the organisation is not ready, it can not be executed properly and your ship is not going anywhere fast.
“On average, organisations deliver only 50% of the financial performance their strategies promise”
Whilst analysing a business to identify the gaps between strategy, execution and results is an involved process, the outcomes are best illustrated with a simple 2 by 2 matrix. Each quadrant has its own set of challenges. If you are in the top right, well done, your ship is sailing full steam ahead towards True North. Unfortunately, the majority of businesses are not in this quadrant and require either a change in strategy or a change in execution.
I hear this word misused, often without substance or definition. You have been told you need a strategy, a marketing strategy, a product strategy, a digital strategy, a brand strategy, a customer strategy, and so on. In my experience what organisations really need is a great all-encompassing customer centric strategy, a dynamic plan, and an organisation ready and aligned with their strategic objectives.
At this point, a definition of strategy would be welcomed. The definition of strategy is contentious and inconsistent, but perhaps the simplest distillation of strategy was published by Peter Drucker in 1954. Whilst the word has been misused significantly since then, this statement is as relevant today as it was over 60 years ago.
“Strategy is the answer to the dual questions: What is our business, and what should it be?”
Answering the question of what your business is, is not an easy process - and I’ll dive into that in a follow-up article. This statement, you will note, encompasses more than what the business is, it takes us to what the organisation will be. Strategy is not static, it is a journey to a blue ocean where we play to win.
In its rawest form, I look at strategy, and its execution, as an organisation focused on delivering value to their customers - a blend of art and physics. It demands a critical way of thinking, multi-dimensionally, and doing that is often overlooked.
The Art of Strategy. Strategy is Marketing
To address the topic of strategy and its successful implementation, it is imperative to understand marketing. In January 1991, Harvard Business Review published Regis McKenna’s paper “marketing is everything”. His defining principle of marketing is simple;
“Marketing is everything and everything is marketing. It is not a function but an all-pervasive way of doing business.”
This definition is certainly ambiguous and perhaps tends more toward art than science. I look at marketing as an organisational mindset, shifting thinking from product to customer to create and capture unique value. In my experience, strategy execution succeeds when marketing lives at the core of the organisation, transforming all areas of the business, aligning people and delivering great customer experience.
When applied to the world of strategy it stands to reason that if marketing is all areas of business, it should then be the mandate of marketing to clarify what the company is and what it should be.
That is the art. Now for the science and forces in play.
The Science of Strategy. Strategy is a resultant force.
Picture a yacht under sail. For the yacht to remain afloat and move forward, it is subject to various active forces. The downward force of its weight must be counteracted by the buoyant effects of lift for it to float. For it to move forward, the sails must be setup to harness the force of the wind and overcome the friction forces of water resistance. If the yacht’s forward movement encounters resistance from a strong current, the trajectory must be corrected. The resultant force, i.e the net direction in which the yacht travels, is purely the sum force created by a system of active forces.
Think of your organisation as the yacht. Think of the sails as your organisation structure and processes, and the wind as your ever-changing people and their skills, values and culture. These all exert directional, active forces.
Strategy is the charted course and the CEO and organisation leaders constantly align forces within the organisation to keep the boat on course.
Ask yourself these questions:
Why does this present a challenge? Every business has a number of resources executing and making decisions every day, those actions and decisions are forces pushing or pulling the business forward (or backward). If forces pull in different directions, often the strongest force (voice) wins and is given priority on resources and assets allocation which might be in an opposite direction to what is optimal.
All too often, the real challenge that executives face when organisations grow is to identify and acknowledge those active forces and their actual impact. In my experience, poorly executed strategy is most often caused by a lack of strategic alignment across all of the active forces within an organisation, eroding the profitability of the business.
By having a strategy with clear objectives in place and aligning all the building blocks you will create an environment where everyone is pulling in one direction, where the resultant force minimises wastage and maximises efficiencies. Only then can you expect organisational growth and transformational marketing to become the mindset. Because marketing is, as Mckenna defined, all-pervasive. It accelerates the speed of growth.
To use a real-world example, a client, Jet Park Hotels, had reached a plateau in growth. The solution they were seeking was a marketing plan to sell more and deliver more profit. Quickly through our interview process with executives and management, we discovered that their resultant force, i.e capacity for growth, was being hindered by managers that followed their departmental needs, rather than aligning with one shared strategy. The active forces were all trying their hardest to succeed, but without being effectively aligned with a set of common objectives. The net effect was to actually inhibit progress with a negative impact on the staff engagement and overall profitability.
This is easiest described with a simple analogy; imagine a 4-way tug of war with four groups pulling with 100% effort in their own direction. Now imagine if they all pulled north at the same time. I’m sure you see where this is going.
Many of the most intelligent marketing plans fail to deliver performance for this one simple fact; the strategy does not permeate the entire organisation and active forces are not aligned with its direction. The net effect? Minimal resultant force towards the strategic direction and a strategy that fails to deliver the financial performance it promises.
To shift your organisation to the top right quadrant and deliver growth requires the alignment of strategy, structure, systems, processes, people and their skills, values and culture.