1CMO

Growth strategy | Advisory | Force multiplier

Leadership

What is Your Strategy

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“Strategy can be defined as the determination of the long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.” – Alfred D Chandler, Jr.

Introduction

Formulating the strategy that an organization or team will use to achieve its envisioned future is a key component of the VUCA Strategic Planning process.

The word “strategy” has as many different meanings and interpretations as there are leaders of organizations who want to have a strategic plan. This is unfortunate because this lack of clarity and confusion often leads to disappointment and has given strategic planning an undeserved bad reputation.

The rest of this article will present a simple definition of strategy and how it fits into the VUCA strategic planning process.

Strategy Defined

In the realm of VUCA Strategic Planning, “strategy” has a central and extremely important role to play. To ensure the highest probability of success, the leaders of an organization must choose and articulate a clear strategy to follow. It will define the approach, or the “how”, that individual contributors and teams use to do their work and achieve their short-term objectives. The complete VUCA Strategic Plan is then built around the execution of the chosen strategy. Ultimately, successful execution of the strategy will propel the organization towards achieving its long-term goals.

This leads us to a simple VUCA Strategy definition: The approach that will guide the team on “how” to achieve the short-term objectives that move the organization from its current state towards achieving its long-term goals.

Where Does Strategy Fit Into VUCA Strategic Planning?

Strategy plays a vital role in VUCA Strategic Planning. It is quite literally the vehicle that will help the organization bridge the “gap” between where it is today (its current state, or sometimes referred to “as-is”) and it wants to be in the future (desired future state).

The Core Ideology of the organization is the planning filter than any strategy should be evaluated against, and the Envisioned Future is the baseline definition for the desired future state. When combined with robust Situational Awareness, which details the current state of the organization and its operating environment, your Core Ideology and Envisioned Future create the springboard for strategy development. Previous articles have described these three planning elements in greater detail:

  • Core Ideology – defining the mission, values, and purpose of the organization. These elements describe why the organization exists and what it stands for. They form the “true North” guideposts for making strategic decisions and are the foundation for any VUCA Plan. With this solid planning foundation, you will have a clear understanding of what your organization stands for and its unique strengths. This understanding provides greater clarity and a useful strategy filter for making critical business decisions that affect the future of your organization.
  • Envisioned Future – defining a clear vision for what the organization aspires to become or achieve, and your long-term goals. These elements explain the desired “future state” of the organization, and the long-term goals you and your team are working towards achieving in order to get there.
  • Situational Awareness – a thorough analysis of the environment in which the organization operates. Situational awareness involves knowing where you are (“current state”) and being aware of what is happening in your environment, in order to better understand how information, events, and one’s own actions will impact both immediate and future outcomes. This typically includes an analysis of internal and external factors with a focus on the organization, its market(s), and its customers.

In the definition of Situational Awareness above, the environment refers to everything that is going on around the individual, team, or organization. The reason we focus on important elements of the environment is to emphasize that situational awareness is ultimately about enabling an individual, team, or organization to get something done. This can be a task, a project, an initiative, or anything else that requires interaction with, and reaction to, relevant elements of the environment.

With this solid planning foundation, leaders are then ready to consider strategic options that will enable the organization to bridge the gap between the current state and the desired future state while factoring in the operating environment as revealed by the Situational analysis. This is where strategy comes into play.

  • Strategy – defining the approach that will guide individuals and teams on “how” to achieve the short-term objectives that move the organization from its starting point towards achieving its long-term goals.

As you can see, in its simplest form, a strategy should bridge the gap between “current state” and “future state” for the organization.

The Value of Strategy Frameworks

Formulating a strategy for the organization to achieve its long-term goals is a complex endeavor because it is highly situational – every organization is unique, more often than not operating in an uncertain VUCA (volatile, uncertain, complex, ambiguous) environment, and their situation is unique. The need for VUCA Strategic Planning has never been greater.

Many leaders find strategy formulation to be extremely challenging, yet intellectually stimulating at the same time. In many respects, defining strategy for the organization is the very essence of leadership!

Strategy formulation is not easy. Depending on the current state of the organization, the envisioned future, a comprehensive situational analysis, and the size/complexity of the “strategy gap” there can be any number of potential strategies and variations to consider.

Given the complexity of operating environments, marketplaces, and competitive forces, this is one of the most challenging tasks for modern business leaders. Fortunately, there are a number of established frameworks that can help us to identify the best strategy for the organization to reach its identified long-term goals.

Perhaps the simplest strategy framework is the basic “gap analysis” – a strategy designed around answering the question: “How will we get from here to where we want to be?”

There are a number of other strategy frameworks, some of these (like SWOT and PESTEL) are quite useful during the Situational Awareness phase of strategic planning. Each of these incorporate different approaches to evaluating the challenge and formulating the resulting strategy. A few of the more well-known strategy frameworks include:

  • SWOT
  • PESTEL
  • Porter’s Competitive Forces
  • McKinsey 7-S Framework
  • Pareto Analysis
  • Constraints Analysis
  • VRIO Analysis
  • BCG Matrix
  • Ansoff Growth Matrix

Future articles will explore each of these, and their application, in greater detail.

The Basic Elements of a Good Strategy

No matter what strategy framework you decide to use (if any!) there are five common elements to any good strategy:

  1. Situational Awareness: You must have clarity on the starting position (current state), and consideration of the environmental factors that could influence your success.
  2. Envisioned Future: A realistic long-term goal (future state) that can be achieved, or enabled by, the successful execution of the strategy.
  3. Diagnosis: A reasonable diagnosis of the challenge. This is the logical, and fact-based, explanation for the reason(s) behind the challenge the organization is facing.
  4. Hypothesis: A simple hypothesis on the solution to the challenge, one that the strategy could reasonably be expected to solve.
  5. Action Plan: A logical and feasible action plan, spelling out the high-level actions the organization is capable of taking that would lead to overcoming the challenge or achieving the objective.

These elements provide helpful criteria for leaders to use when evaluating any considered strategy.

Next Steps

Formulating strategy is not easy. And unfortunately, it only signals the beginning of the next phase of VUCA Strategic Planning because once a leader formulates a strategy they must make the all-important “go or no-go” decision. If the decision is to move ahead with a chosen strategy then it is time to build a complete strategic plan around it.

-Onward

Do You Want to Be a Frogman?

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“Everybody wants to be a frogman on a sunny day.” – US Navy SEALs

The US Navy Sea, Air, and Land Forces (SEALs) are arguably the most elite, and revered, fighting force in the world. This saying originated within the SEAL training program, where they take volunteer candidates and run them through an intense multi-phase training program called Basic Underwater Demolition/SEAL training, or BUD/S for short. Only 20-25% of candidates make it through the entire process to become Navy SEALs, or “frogmen”.

Note: I have also heard the alternative phrase, “everybody wants to be a SEAL on a Friday” attributed to the same training program. I’m not sure which one is used today, but in my mind they have the same meaning: becoming a SEAL is much harder, and less glorious, than it looks to an outsider. And no matter how challenging, they are committed to achieving success.

I believe same observation applies to being the leader of an organization.

Leadership is Hard Work

By all accounts, US Navy SEAL training is brutal. Moreover, once they reach the end, newly minted SEAL operators discover the hard work has only begun. Their lives are a constant swirl of training mixed in with life-threatening and uncomfortable field operations in crisis hot spots around the world.

Despite being physically intense and exhausting, the real purpose of SEAL training is not physical fitness, it is to test the willpower and mental stability of the participants. You see, becoming a special forces operator is a high stakes and high stress profession, with danger lurking around every corner. They cannot risk having SEALs who break down at the first sign of trouble or hardship. The SEALs will not tolerate quitters; they want those who are willing to suffer while focused exclusively on achieving their goal with their team.

This is the Navy SEAL mission: “When there’s nowhere else to turn, Navy SEALs achieve the impossible through critical thinking, sheer willpower and absolute dedication to their training, their missions and their fellow Special Operations team members.”

In fact, the Navy SEALs have another saying that sums all of this up perfectly – “the only easy day was yesterday.”

Perseverance in the Face of VUCA

The trainers want to make sure that prospective SEALs are in it for the right reasons and weed out those who are in it just for the prestige or glory. The purpose of the training is to grind it out, to endure, to stay focused on the mission of finishing the training. They are looking for those who can absorb all the awful things thrown at them and still maintain a positive and focused mindset.

This is not too different from leading an organization in times of great uncertainty, like the VUCA (volatile, uncertain, complex, and ambiguous) environment we find ourselves in today.

Leadership is not about basking in the perks or glory of the role, or the title, or your team’s accomplishments. Leadership, is about evaluating risk, making decisions, aligning team resources, and inspiring action to work towards a common goal. It is hard, tiring, sometimes ungratifying work.

Having the ability to coach and lead others to victory, through extreme levels of chaos, is probably the single most valuable skill in this new VUCA world we are all facing. 

Now, more than ever, people are looking for strong leaders to help guide them through this crisis.

Leadership is Voluntary

Every SEAL trainee volunteers to be there, and every single one of them can volunteer to leave at any time during the training – you may have read about the mythical “bell” in the center of their training complex where a defeated trainee can “ring out” signaling their intent to quit the program immediately.

As the leader of an organization you volunteered to do the job, and every day you volunteer to keep doing it. If you get tired of it, you can always revert to being a follower.

If you choose leadership, it is a commitment you make to yourself, your team, and your organization to affect change and achieve the long-term goals of the organization. You must constantly motivate and inspire your team in their pursuit of success.

Becoming a leader is a journey, not a destination. It is by slogging through the hard times that you come to appreciate the good times, and become a better leader in the process.

Lead, Follow, or Get Out of the Way!

When the seas are smooth, the sun is shining, and there is a steady breeze it is relatively easy to steer the ship. However, what happens when all hell breaks loose and you cannot see a clear path to victory?

This is when some leaders shut down and become paralyzed by fear, uncertainty, and doubt…they make rash, shortsighted, or illogical decisions, or even worse, no decision at all.

This is also when true leaders emerge and find ways to win, no matter how difficult the circumstances, or uncertain the path forward. 

Everyone wants to be a hero until you have to step up and do heroic things! True leaders have the critical mindset of being able to move beyond fear, to confront whatever VUCA situation they are handed, and make sure their organization and team not only survives but thrives. 

It is not easy, but this is what the best leaders do.

Everybody wants to be a frogman on a sunny day, but real leaders also step up when it is dark, wet, scary, and the path is not clear.

-Onward

The Emperor Has No Clothes

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“The strength of any organization is a direct result of the strength of its leaders. Weak leaders equal weak organizations. Strong leaders equal strong organizations. Everything rises and falls on leadership.” – John Maxwell

We are living in a strange and challenging era. As the global pandemic continues to have a profound economic and social impact, two things have become very clear – this level of VUCA disruption is not going away, and the need for strong leaders has never been greater.

The virus in some way has affected each of us – Hundreds of thousands have lost their lives; tens of millions have lost the jobs; billions have been inconvenienced or stressed.

Against this catastrophic backdrop, there is no question this has also been a challenging period for leaders of organizations of all types: government agencies, public and private companies, and non-profits.

Times of crisis are an inflection point, providing an opportunity for true leaders to reveal themselves. Many have stepped up and demonstrated their true leadership attributes, while others have stumbled.

Crises can also reveal weaknesses in organizational alignment or teams that are often hidden, or conveniently ignored, when times are good. It is exactly at times like this that we can witness real leaders, showing their true characters and capabilities.

There isn’t an established playbook for leaders to follow in this type of disruptive and chaotic environment, but there are some timeless leadership principles that still work. In this article, I’ll share a few observations and some guidance for leaders as we slowly begin to re-start the economy.

The Emperor’s New Clothes

I was thinking the other day about some of the business leadership failures I have either witnessed, or heard about from my network, in the past few months. For some reason this topic reminded me of one of my favorite childhood stories, The Emperor’s New Clothes, by Danish author Hans Christian Andersen. Even though this folktale is almost 200 years old, it still has relevance.

CAVEAT: Although the parallels to some of our current political leaders are obvious, and it would be far too easy to pick on them, this article has absolutely no political aspirations or intent. My focus is purely on the world of business.

In case you have not read the story, or it has been a long time since you last heard it, here is a quick summary:

A vain emperor, who cares only about his status and appearance, and has a penchant for wearing fancy clothes, gets enchanted by two scheming weavers who promise to make him a new set of clothes unlike anything else in the kingdom. They bluff him with promises of an outfit made of fine and rare fabric that has the special power of being invisible to anyone who is unfit for their position, stupid, or incompetent. This proves to be too big a temptation for the emperor, who engages them immediately. In reality, the weavers only pretend to make the clothes. As a result, no one, not even the emperor nor his royal court can see the alleged “clothes” when they are finished, but they all play along lest they appear unfit for their positions. And the public has the same reaction when the emperor parades with his new clothes, lest they appear stupid or incompetent. Finally, a child, completely ignorant of the ruse, cries out, “But he isn’t wearing anything at all!”

As a child, I found this tale, in its profound absurdity, to be very amusing. As an adult, I am coming to appreciate some of the applications to the modern business world.

Over the years, literary scholars have noted that the phrase, “Emperor’s new clothes”, has become a standard metaphor for anything that smacks of pretentiousness, pomposity, social hypocrisy, collective denial, or hollow ostentatiousness. Others have suggested that the real moral of the story is in having the courage of one’s convictions – to speak the truth and challenge authority, no matter what the repercussions or humiliation to the recipient.

All pretty relevant to effective leadership and today’s disrupted business environment.

Some Recent Examples

This got me to thinking about some of the lapses I have seen in the world of work over the past few months:

  • Companies with predominantly white male executive teams and boards, claiming they care about diversity and inclusion…
  • Organizations undertaking massive RIFs while simultaneously recruiting for “exciting career growth” job opportunities…
  • Public companies securing huge CARES relief loans at the expense of small ones who didn’t have the resources to apply quickly…
  • Leaders who claim they “lead from the front” yet have never visited their teams, or major clients, out in the field…
  • Tone deaf celebrities and business leaders sharing pictures of their swanky shelter-in-place digs (from mountain retreats to yachts)…
  • Companies who claim to be high-touch and people-centric in their recruiting firing people by email or group conference call…
  • Companies that have been hell-bent on growth and retail outlet expansion to gain market share, now demanding rent relief from property owners…

I’m sure you’ve probably seen a few notable examples as well.

Takeaways for Today’s Business Leaders

Of course, not all of the bad behavior examples above are attributable to vain or out-of-touch leaders, but I think many are. A few of them have garnered media scrutiny and negative publicity. Deservedly so.

Being the leader of an organization is a privilege. One that comes with responsibility.

It is appropriate to hold leaders accountable for what happens within their organizations. Depending on the example, individual leaders may not have done anything egregious, but they do craft organizational strategy, they do own the culture, they do set the tone, they should care about the well-being of their people, and by default every good leader should take full accountability for the actions of anyone in the organization.

In this new VUCA world, this time of turmoil and stress, it is time for leaders to step up.

Do the right thing.

Be a leader.

In that spirit, here are a few takeaways for today’s business leaders, which I think are also good values for any organization to embrace:

  • Display empathy. Run every decision and communication you make in regards to your workforce past this filter: In the past 3 months, nearly 40 million Americans have lost their jobs. Over 100,000 have lost their lives. Unemployment is now at historic highs. Is your decision empathic to those affected already, or those who are worried they may soon be?
  • Practice humility. It is not a time for grandstanding or braggadocio, it is a time to get busy, and do the hard work. The concept of servant leadership has great application here. Leaders should serve those on the front lines who are doing the work of the organization. Helping to solve problems and remove obstacles. Be a visible leader, but don’t take the credit for it.
  • Be honest. Nobody expects leaders to have all the answers. However, lies and deception always catch up to the owner. If leaders do not have the answers, then they should promise to work through it and find solutions. People don’t always expect you to have to have the final and definitive answers, they just want to know that leaders care and are working towards a solution.
  • Communicate, Communicate, Communicate. In fact, you cannot over-communicate to your organization in an environment like this. Practicing the above traits (empathy, humility, honesty) while providing frequent and transparent updates to your team. They will appreciate it, and you.
  • Lead by example. Great leaders lead from the front, and they walk the talk. If leaders are going to open a plant or office back up, they had better be the one opening the door and greeting each worker who enters. It would not hurt to be the one serving them coffee or lunch too!
  • Be human. I left this for last because I think it is the most important. Remember, business is all about people. Focus on them. Act with integrity. If all else fails, follow the golden rule: do unto others, as you would have them do unto you. Be human.

Conclusion

Organizations and their leaders show their true colors in the difficult times. In this new and unpredictable VUCA business environment, I hope more leaders step up and lead.

The world needs it. Now more than ever.

-Onward

What is Your Envisioned Future?

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“If you don’t know exactly where you’re going, how will you know when you get there?” – Steve Maraboli

In today’s disruptive VUCA (volatile, uncertain, complex, ambiguous) business environment it is critically important for organizations, teams, and individual contributors to have clarity on their vision of the future and what their long-term goals are.

This clear direction becomes a guiding beacon for building an effective VUCA strategic plan, one that clarifies your strategic intent and enables your organization to quickly make decisions and then take action in order to get there.

The Foundation for VUCA Strategic Planning

There are two foundational elements required effective VUCA strategic planning: Your core ideology and clarity around your envisioned future. Your long-term goals should be based on, and in alignment with, your mission, values, and purpose. Together these become the core ideology for your organization.

  • Core Ideology – defining the mission, values, and purpose of the organization. As a previous article explained, these elements describe why the organization exists and what it stands for. With this foundational framework you will have greater clarity when making critical business decisions that impact the future of your organization.

However, before any strategic VUCA planning can begin we must also have clarity around the envisioned future state of the organization:

  • Envisioned Future – defining a clear vision for what the organization aspires to become or achieve, and your long-term goals. These elements explain the desired future state of the organization, and the long-term goals you and your team are working towards achieving in order to get there.

Defining Your Envisioned Future: Vision and Goals

Articulating the envisioned future of your organization has two main components: a vision statement, and long-term goals:

  • Vision – Your vision statement defines what the organization aspires to become or achieve. Based on the current status of your organization, an effective vision will articulate where you want to take your organization in the future. Because of this future focus, your vision statement often sounds much different from what the organization is today (mission statement).

A specific and compelling vision statement can and should help drive decisions and goal setting. This description of what the desired future state looks can be extremely powerful for strategic planning because it provides inspiration and direction, and a focal point for the mission statement and an overall goal or destination for the organization. A clear vision will also help to identify and define potential strategies; and clarify what is within or outside of the organization’s limits.

  • Goals – The goals for your organization are brief, clear statements of significant outcomes to be accomplished within a longer timeframe, typically 3-5 years. A goal is defined with a broad, general, tangible, and descriptive statement – It does not say how to do something, but rather what the singular end-result will look like.

Goals are sometimes described as outcome statements that define what an organization is trying to accomplish both programmatically and organizationally. Some common examples of business goals are, grow profitability, maximize net income, improve customer loyalty, increase market share, etc. Note the brevity of these statements.

Goals are critical to your company’s success. Ultimately, your organization’s goals need to align with your vision, and support your mission, values and purpose. Together this planning foundation will propel each team member’s individual actions and decisions.

Goals Versus Objectives – What’s the Difference?

Business consultants love to develop complex models and invent proprietary terminology for each element of their frameworks. Strategic planning practitioners are no different. This often creates unnecessary confusion.

My bias is to keep things simple, defaulting to the most commonly used terms and definitions, and in the process hopefully making it easier to understand and adopt the VUCA strategic planning framework I’m proposing.

It has been my experience that most organizations, both large and small, public or private, do not understand the difference between a goal and an objective. As a result, they do not effectively communicate them to their teams. This has obvious negative ramifications when you think about the lost opportunity to cascade goals and objectives, and gain buy in, throughout an organization.

Here’s an explanation of the difference between goals and objectives to make sure there is no confusion or ambiguity when it comes to your long-term and short-term plans.

  • A goal is a broad and long-term desired result you want to achieve. You might use company goals to inform yearly strategies and guide the direction of all your efforts.
  • An objective, on the other hand, defines the specific, measurable actions individual employees or teams must take to achieve the overall goal. It is at the objective level that the ownership of the strategic plan shifts from organizational leaders to teams and individuals. This is where the actual work gets done!
  • A goal is where you want to be, and objectives are the steps taken to reach the goal.

Timeframe-based View of Vision, Goals, Objectives

In strategic planning, all the elements need to fit together, and build from one to the next. In other words, your vision statement should inform your goals, which should then inform your objectives. To eliminate any lingering confusion about the differences between vision, goals, and objectives, here’s another way to look at it. Since all strategic plans are time-based, that becomes the key differentiator between these sometimes contradictory and synonymous terms.

  • Vision – this is an aspirational statement that is not time-bounded. In fact, your vision may never actually be attained, but rather serves as an imagined picture of the future.
  • Goals – these are broader and longer-term, typically 2-5 years in timeframe. Your strategic VUCA plan will undoubtedly have several goals.
  • Objectives – the short-term, tactical action items to be accomplished within the next 12-24 months max. Each of your goals will have multiple objectives behind them, and they become a key component of the organization’s VUCA plan. Much more on that topic in future articles!

Next Step Towards Creating a VUCA Plan

In summary, your mission statement focuses on the present, and clarifies what the organization does and for whom. Your values define the core beliefs and provide moral guidance for the organization, becoming the operating system that determines how you get there. While your purpose defines “your why” to provide market-facing clarity on the value you deliver to your constituents.

Defining this core ideology for your organization creates a solid foundation and starting place for overall strategic planning to begin. It comes to life when you combine it with your envisioned future, to articulate a vision for what the organization aspires to become or achieve, and then defining your long-term goals in order to get there.

Organizations achieve their goals by creating strategic plans, within which they define the strategy, and key objectives the team must accomplish. Many organizations struggle with setting up actionable objectives. Next time I’ll share a methodology that I have successfully used for years – the SMARTER framework for setting objectives that get done.

-Onward

Hope is Not a Strategy

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“Hope is not a strategy.” – Vince Lombardi

I was speaking with a company leader earlier this week about the scale of disruption she was seeing in the industry, and the significant impact it was having on her organization’s financials. She then stated, “I just hope we get back to normal soon.”

I took a deep breath and, as delicately as possible, shared my view that this was not going to happen.

Why? The dramatic shock we have experienced in the global economy is already causing widespread changes in almost all aspects of the business world, both on the buy-side and sell-side. For both B2C and B2B businesses across almost every industry.

Nobody is immune. And things are simply not going to revert back to where they were.

I then observed that hope is never an effective strategy for solving problems. In this unpredictable and chaotic new VUCA business environment, we need to think strategically and take decisive action to overcome the challenges we are facing.

We ended up having a great conversation about all the changes that will likely happen in the broader world of work, and a few in particular that are very likely to impact her industry and organization directly.

It is super interesting to note that several of the trends we discussed have already been creeping into her market over the last 12-18 months, but have not gained much traction yet. I suspect the post-pandemic business environment will accelerate these changes…it will be like pouring gasoline over a lit matchstick.

BOOM!

By the end of our conversation we had uncovered and brainstormed a few great ideas for new solutions that her company is both well positioned to offer, and highly capable to execute on.

The shift in energy was dramatic. In just a few minutes, the conversation had morphed from downtrodden “hope” about something that was, if we are being honest, completely out of her control to tangible excitement about actions she had her team could take, all within her control.

As it turns out, the new normal (whatever that turns out to be) actually brings with it many new opportunities if you are paying attention and start looking for them!

Bottom line: It is okay to be hopeful and optimistic about the future, but we must also act today.

Sitting and waiting, hoping we get back to normal, is not how you succeed. Hope does not make or produce anything. Believing in something, setting goals, creating flexible VUCA plans, and taking focused action, is the only proven path forward.

-Onward