How To Tell If Your Organisation Lacks Strategic Thinking
To me the ability to think strategically is the No. 1 leadership skill. In every project I have ever been involved in this skill is typically under developed, if not absent. You cannot lead people if you have nothing tangible to lead them to. Your ability to think strategically directly impacts how well thought out your strategy is and whether or not it can be delivered. This is compounded when several leaders have to collaborate on the same strategy.
It’s speculated in the world of academia that 50-90% of strategic initiatives fail. Even though this range is disputed in terms of accuracy by Cândido & Santos in their 2015 paper: Strategy Implementation: What is the Failure Rate? It does raise an interesting question, even at the lower end of the range. Why is this failure rate so high? I think there is a direct link between the absence of this skill and the high rate of failure.
Let’s explore this now.
Strategic Thinking
The model below is based on a matrix by Professor Tim Knoster, who discovered the correlation between the components of strategy and human fallout, which ultimately determine the level of success or failure in any endeavour. I’ve modified it considerably for a business context, however this is a valid model for any individual, team or organisation in pursuit of a specific outcome. This can be anything from delivering a career defining presentation to leading an organisational transformation in a large enterprise. In the context of this article we are only interested in the column labelled Environment.
What this model demonstrates is frustration, an inability to move anything forward regardless of how much effort is employed, correlates with a lack of resources. Satisfaction occurs when an individual, team or organisation are appropriately resourced.
Let me give you an example: About a decade ago I was supporting a Finance Director of a large enterprise, with a headcount of 241 in their charge, through an organisational transformation.
While leading on a process engineering project, which involved everyone from one end of a particular finance process to the other, an issue was raised by a team leader around recurring problems with their IT infrastructure crashing several times per day. Something they had complained about on numerous occasions, which had previously fallen on deaf ears. This resulted in a high level of frustration across the coal face teams in finance who relied heavily on software services to go about their daily activity.
Culture
The model below is based on a decision matrix the US Navy SEALs use for leadership selection. For the purpose of this article I have swapped Low Trust for Sympathy, defined as: Feelings of pity and sorrow for someone else's misfortune, and High Trust with Empathy, defined as: The ability to understand someone else’s feelings. In the interest of remaining fact based, both definitions have been taken from the Oxford English Dictionary. With them we can demonstrate their relationship with Performance, defined as: A demonstration of technical skills. Four leadership archetypes emerge to offer a sense of who might manifest in each area:
These four archetypes correlate with specific behaviours that can be measured in any individual:
Parent: Overwhelmed, does too much of teams work, some of own, solves too many problems for others.
Slave: Drowning, does everyone else’s work, none of their own, first to solve other peoples problems.
Counsellor: Overly supportive, endlessly talks things through, crusading inertia, nothing gets done.
Coach: Own work is balanced with teams, facilitates team to be independent and solve own problems.
To continue with our example. The predecessors of the finance director were very much command and control orientated, which resulted in a combination of a parenting and slave culture. This meant most of the population had learned to expect their line managers would solve their problems for them, which in this case didn’t happen. I suspect due to the lack of evidence and context around the problem meaning no-action could ever be taken.
Fortunately the current FD was in favour of decentralised decision making, resulting in a switch to a coaching culture. This meant team leaders bumped up against a different wall with this issue. The FD was very outcome focussed and keen for the team leaders to become autonomous and take responsibility for defining problems and coming up with implementable solutions. However, their strategic thinking skills were woefully underdeveloped due to the learned helplessness instilled by previous command and control cultures running on instructional based output, i.e. Do this do that. Zero autonomy.
Let’s jump back to the ongoing process engineering session. I challenged one of the more vocal team leaders to use their team as guinea pigs for an experiment in order to quantify the problem with a rudimentary tally chart. The team of five, over the course of 5 working days, kept a tally of the number of system crashes and their durations.
If you want to learn more about leadership styles and their impact on an organisation and business outcomes do read: Leadership: Styles, Cause & Effect, Leadership: The Side No-one Talks About and Leadership: Narcissists, Sociopaths & Psychopaths.
Impact on Business
The model below is based on a decision matrix the US Navy SEALs use for leadership selection. For the purpose of this article I have swapped Low Trust for Inefficient and High Trust for Efficient, efficiency is defined as: Best use of resources. I have also swapped Low Performance for Ineffective and High Performance for Effective, effectiveness, defined as: Degree of mission success. We can now correlate the impact of organisational state on business outcomes:
The previous four organisational states correlate with specific business outcomes that can be measured to determine their level of success
High Cost/High Yield: Exhausts resources to achieve a great result, which is expensive and short lived.
High Cost/Low Yield: Exhausts resources to achieve a poor result, which is just expensive.
Low Cost/Low Yield: Barely moves the needle, useless if you want progress or change.
Low Cost/High Yield: Optimises available resources to achieve sustainable results.
Once the team had completed their 5 day tally and multiplied its effect across the entire department then over an entire year we were able to conclude the system outages were costing the salary time equivalent of employing two full time members of staff to do nothing for an entire year. Now we were talking the language this Finance Director understood, or (in theory) any senior leader for that matter.
Not only was the problem defined with an associated cost all the information needed to ask the IT Director to address the system issue was available, tipping the entire organisation into Low Cost/High Yield in terms of their IT infrastructure. This, to me, is a very simple yet text book example of strategic thinking: Where are we, where do we want to be, how are we going to get there?
It was great to witness a group of previously downtrodden team leaders, after a bit of coaching, experience the intrinsic reward of solving the problem for themselves, and being recognised for communicating their message well enough to influence their most senior stakeholder to take action on their behalf.
It set a precedent. If you take the time to quantify problems and suggest solutions you will be heard, and you didn’t need permission to go about fixing things that were getting in the way of doing your job well.
Interestingly prior to my arrival HR had recently completed their annual employee engagement survey, which sat at 15% under the previous FD. A year later we had collectively raised the bar to 85%.
If you want to learn more about this phenomenon the please do read: Culture: Digital Transformation & Organisational Readiness.
Conclusion
To me the ability to think strategically is the No. 1 leadership skill, which I find is typically under developed, if not absent. As demonstrated in this simple example: You cannot lead people if you have nothing tangible to lead them to. Your ability to think strategically directly impacts how well thought out your strategy is and whether or not it can be delivered. This is compounded when several leaders have to collaborate on the same strategy.
I’m sure as you read through you placed people you know in different quadrants. Now that you’ve assessed everyone else, might it be worth assessing yourself against these models?
Determine when and how you tip in and out of the 6 different levels of strategy.
Ask those around you for feedback.
Take note of what you are doing well.
Take note of what needs work.
Set some next steps to up your game accordingly.
If you would benefit from support to set you and your organisation up for success, ensuring you take a strategic approach, then please do schedule a call with me by putting a 60mins in my diary at a time that suits you. We can discuss your situation and options over an eCoffee. I also offer a live online 90 min module using the first model in this case study to Create Common Purpose, for suitable dates and times check here, you can check out useful resources below and even sign up for my newsletter.
Best Wishes
Kenny
