Understanding the human side of Good Strategy

The fundamentals of a good business strategy are, I believe, fairly well-known, yet it is true that we see the hallmarks of bad strategy everywhere. For those in search of a great text on the subject, I thoroughly recommend ‘Good strategy Bad Strategy - The difference and why it matters’ (Richard Rumelt). However, in it he states that good strategy is often beautiful in its simplicity, yet as human beings we are both complex and obviously essential to the process. Clearly there’s a tension here that warrants further investigation. Before embarking on that, allow me to offer a short, and consequently somewhat inadequate, summary (‘blinks’ of the book are available on Blinkist for those so inclined) such that we might move forward together with a shared understanding.?

Rumelt highlights that the kernel of good strategy is formed of three essential elements; a key insight about the future, an appreciation of the primary challenge to be overcome, and a set of related, or ‘designed’ coherent actions that aim to address that challenge, based on his ‘sources of power’. To go deeper would consume this entire article, and is not my intent, but it would be fair to say that behind the sources of power is a good old fashioned SWOT analysis, and consequently, an appreciation of a business’s unique strengths, considered in context such that they can best be utilised to then develop an advantage.

In most SWOT meetings I’ve been in or facilitated, it’s interesting to see the repeat themes put forward. Statements like ‘healthy cash position’, or ‘large brand footprint’ are often mooted, alongside IP, unique processes or refined tools employed, and a whole host of other rational descriptors for a business’s more overt operations. Rarely though does culture get discussed, alongside the individuals and teams, each with their own predilections and fallibilities. I find this really interesting, especially because I would argue that there is no ‘right strategy’, but rather a multitude of different strategies that the team either can or cannot deliver. In other words, a good strategy fits the people who are executing it. Certainly, in the case of key insights, the insight is often proved right or wrong. It either does or does not come to pass. However, the reflection of the business’s own strengths and weaknesses is far less binary, and even more so, once you consider who’s doing the reflection and how they go about it.

“there is no ‘right strategy’, but rather a multitude of different strategies that the team either can or cannot deliver.”

As businesses grow, entropy occurs, as Rumelt highlights, but how we view this entropy depends on the lens we unconsciously apply. For me, the greatest casualty in the growth of a business is reflection, both by individuals and by teams. This shouldn’t come as any surprise. It’s the same for us in our personal lives; the more hectic life becomes, the less time we commit to reflecting on life’s events as we soldier on, trying our best to get through what life throws at us. Yet, it’s when we do manage to pause and reflect, or are made to, that we gain some clarity on the situation and the best way forward.

I believe the greatest correlation with successful strategy relates to the degree of reflection that an organisational culture promotes. Thinking back to the SWOT analysis, how many leadership teams feel comfortable enough in a typical strategy meeting to present their whole selves in that meeting; the good and the bad? Very few C-Suite execs are likely to be vulnerable enough to point to their own weaknesses as something that ought to be captured in a quadrant of a SWOT analysis. However, when the culture of vulnerability is driven by the CEO, then others follow suit and these very reasonable, human short-comings can be mitigated by the team. People can come together and acknowledge what they are and are not good at, understanding the gaps and then acting accordingly. Rare perhaps, but it can be done!

Depth of reflection in these circumstances can be aided by good team coaching, but in its absence, the CEO must lead the way. One, perhaps more comfortable way of getting people to talk about their own failings is to address their strengths instead. Much like opportunities and threats, strengths and weaknesses are not binary and can be reframed depending on the context. Just as a threat can be reframed as an opportunity, so strengths can be reframed as weaknesses and vice versa. So, to get a strategic team to talk about their short-comings, sometimes it’s best to focus on their key strengths and what might happen if those strengths are overplayed, since every strength overplayed becomes a weakness. This kind of discussion inevitably leads to a more open dialogue, and consequently discussions about the genesis of the most likely hurdles in any strategy - the people actually executing it.

“sometimes it’s best to focus on their key strengths and what might happen if those strengths are overplayed, since every strength overplayed becomes a weakness.”

Another way to take the sting out of such personal vulnerability is to implement some form of psychometric testing. Since everyone has to go through it, no single person is singled out. Contrary to what some might think, we all have our failings and a good test can bring these to the fore, available for discussion. A rather fitting test for this situation is the Hogan Development Survey, which seeks to unveil the dark side of people’s personalities under pressure. They’re described as ‘derailers’, which is felicitous when we’re talking about identifying elements that might cause a strategy to falter. I think it’s especially appropriate given that the usual reason strategic development is called for is because people are under pressure in the first place.?

A good strategy poorly executed is unlikely to succeed. Indeed, if the strategy is poorly executed due to a lack of awareness and reflection around the strengths and weaknesses of the individuals executing it, is it really a good strategy at all? I think this is exactly the main cause of the entropy Rumelt talks to. As companies grow, time to reflect decreases and clarity around roles and the strengths and weaknesses of individuals and teams quickly disappear. Without that clarity, a business can develop the most beautifully simple, theoretically sound strategy ever, only then to fail in its execution due to a woeful lack of human understanding within the team.?

If you want a great strategy to succeed, create a culture of openness and vulnerability that leads to a true picture of your strengths and weaknesses - all of them. Not only will the right strategy get executed effectively, but the people executing it will experience the wonderful feeling of leveraging the best of themselves, whilst mitigating each others’ worst, working together as a team. Now that really does sound like my kind of ‘Good Strategy’.