Do you really have a strategy? A practical definition to help you know
One way to define what Catalysis does with investors and companies is that we (i) help directors create executable strategies and then, (ii), make sure that the managerial and organisational underpinnings of strategy execution are in place. On the first point, we don’t identify the ‘what’ of strategy: we leave that to management teams supported by CDD and strategy advisers. But we do have strong views on the ‘how’ of strategy because too many supposed strategies are exercises in self-deception and ultimately a disappointment.
There are different species of non-strategies. A common type is the ‘Strategy to keep the investors happy’ which consists of ambitious, mostly financial, goals accompanied by detailed forecasts. Or try the ‘Feel good strategy’ which starts with flowery vision, mission and values statements but stays vague on competitive advantage and accountabilities. Or how about the ‘Little Red Hen strategy’ with tens of strategic initiatives which will hopefully add up to a growth story - if the overloaded management team doesn’t wear out along the way. These, and doubtless other fascinating ways of pretending to do strategy, all share the characteristic that they provide short-term comfort to those involved – but then longer-term frustration at the inability to execute. That usually gets blamed on management: after all, the strategy was fine – it must be a pure delivery issue.
At the root of this problem is a lack of clarity and consensus about what a strategy is. One thing we find helpful is to always refer to ‘executable strategy’ to remind us of the risk of creating strategies in the boardroom which don’t take proper account of realities faced by the organisation. A second approach is to remember that the most important recipients of strategies are not directors and investors but, more importantly, frontline managers and staff who need to focus their attention, as well as suppliers, clients, etc who want to understand the direction of travel.
But overall, we need a definition designed to make it easier to see whether a claimed strategy is indeed an executable strategy – or one of the other species. There are plenty of choices, of course, but the one we find most practical is:
A credible and agreed route map to move from one market/offering/organisational/financial system to a more valuable one.
Let’s unpack that to see how it can guide us down helpful paths:
Credible: this requires us to test key assumptions for their validity, backed up by evidence in some form, such that we have justified confidence in delivery.
Agreed: we need alignment across those being held accountable for subsequent performance, specifically that the assumptions and targets etc for everyone are clear and reasonable.
Route map: although we need goals as part setting strategy, the strategy itself is primarily a recipe by which we expect to achieve them. If the ‘how’ isn’t credible then the ‘what’ needs to adjust to reality.
Market/offering/organisational/financial system: This is shorthand for the essential observation that unless we join up: the environment we operate in (market, competition, technical, legal etc); what we provide in terms of products and services; the human and organisational resources at our disposal; the financial outcomes (revenue, profit, value) we are hoping for - into a coherent system, then we are just hoping not strategizing. If you change one part of that system, you likely need to adjust all the others in some form – which is messy.
Starting from this definition, we can better proceed to describe the work involved in creating a genuinely executable strategy.
If you’d like to talk about this some more, Catalysis is offering thought provokers (30 minute sessions to stick onto the end of team meetings) or interactive training sessions (more like 75 minutes) to its clients and friends on this and other topics.
Get in touch
If you would like to find out more about how we work with investors and leadership teams, feel free to ask us for introductions to clients who know us best.
