Your strategy is not what you say it is

About a decade ago, I was lucky enough to spend a couple of weeks in Europe being tutored by professors from one of the world’s leading business schools in Switzerland. The school specializes in collaboration with companies around the world and high-level corporate instruction for up-and-coming executives. The instructors surpassed anything in my experience from an academic standpoint.

I’m not sure I met all the criteria to qualify as a “promising young global executive,” but I wasn’t going to turn down the opportunity. I don’t know if I was his best student and I’ve probably forgotten a lot of his message. However, it has never left me with a point, and that’s probably because I’ve seen it time and time again in the business world. It was amazingly simple yet often ignored.

Are you on the edge of your seat with anticipation? Here is the most important pearl of wisdom that I brought home with me. Your strategy is not what you say. It’s what you do. Consider that for a moment. Sounds pretty simple, doesn’t it? However, start paying attention and you will realize how deep the observation really is.

Basically what they are saying is that companies spend hundreds of man-hours analyzing the market, the competition, their internal capabilities and developing SWOT. Then they write this long document that few people see, even fewer understand, and almost no one consults until it’s time to develop a new one. And then, to add insult to injury, they go out and engage in commercial activity which is the reverse of their strategy.

lie to yourself

Do not you believe it? Look around. In my decades of experience, I have seen a company get it right and only get to that point after years of doing it wrong. However, once they got it right, it was clearly different. Here’s an example to show what I mean.

I worked with a company whose exalted strategy was to stabilize its supply chain by standardizing its prices and expanding its wholesale customer base. Do you want to guess what they were actually doing? They had special price levels and quarterly promotions scheduled for the 4-5 small wholesalers who accounted for about 85% of their business. They even structured the requirements for pricing and promotions in such a way as to virtually guarantee that none of their other vendors had any hope of evolving to meet the requirements and become one of the larger customers.

Obviously, their real strategy was not what they said, but what they were doing. And what they were doing was offering preferential prices and incentives to ensure that their business became even more concentrated and dependent on a very small percentage of their customers. Not surprisingly, that is exactly what happened. They have since handed over their entire executive board and sold their manufacturing facilities. That is a dramatic example, but you can see many small examples everywhere you look.

In three easy steps

So what is the answer? It sounds simple but it is difficult to implement. The difficulty comes from trying to force “intelligent” people to act more simply and getting “important” people to try to appear less important. Anyway, here are three simple steps to make sure your strategy is really what it says it is.

• Step one: Reduce your strategy to its simplest form. This may mean you end up with a three word strategy backed up by 4 or 5 bullet points. That’s exactly what they had at the only company I saw that did it right.
• Second step: Drill it into every employee. Because your strategy is so simple, you should have no reservations about requiring everyone to know it and be able to recite it on demand. I suggest you do this and often.
• Step three: Stick to your strategy fiercely. Give every employee the right to challenge someone, anyone, who tries to deviate from it. No sacred cows or sacred executives. Anyone who tries to deviate is challenged.

You should live it

Don’t you think it can be done? You can and I’ve seen it. It happened at a very large company and it changed its entire culture in two years from an old boys club to a high performance learning organization. It was so simple it almost defied logic and it stayed that simple.

Here’s the catch. You have to genuinely believe in it and you have to live it from CEO to mail room clerk. If the employee can’t challenge the CEO on a clearly misaligned initiative, it fails. I’m not saying that the employee can veto the CEO. I’m saying that the CEO will accept, and even welcome, the challenge. This keeps the organization on its toes and allows everyone to believe and behave according to the strategy.

However, if you can’t do it for real, it’s best to avoid making a half-hearted attempt. You can’t fake it and you can’t fool a whole company full of employees. People are generally more perceptive than we give them credit for and anything that is not genuine effort will be recognized for what it is. Wait until you are ready with a well formulated and supported plan and then give it a serious try.