When members of an organization – executives and staffers alike – feel like their organization lacks direction and focus, the refrain, “We don’t have a strategy” is heard echoing the halls. However, we have found that the causes of such opinions are more nuanced than simply a lack of strategy. In our experience, there are two underlying issues that are commonly lumped together when it feels like the organization doesn’t have a strategy: 1) ambiguity around the implications of the strategy (what does the strategy mean) or 2) leadership indecision (lack of alignment among leaders about what is the priority or what is important).
Both strategic ambiguity and leadership indecision result in unclear priorities and create real problems for determining where the organization should focus its resources and time. Since the consequences are so similar, leaders often assume the same root cause – lack of strategy. However, a deeper look suggests that the solution differs depending on whether the problem lies in indecision or strategic ambiguity.
Strategic Ambiguity
When members of the organization say that there isn’t a strategy, leadership bristles because they have often spent considerable time and resources in developing what they consider to be a strategy. While many times there is an articulated strategy, the implications of that strategy are unclear to the organization and its members. As a result, leaders and employees assume that there isn’t a strategy.
To make the strategy clearer to the organization, leaders must take the time to break the strategy down into components like resources, strategic capabilities, timing, and implied trade-offs. By breaking the strategy down so that the implications of the strategy (the “so what”) is understood, members of the organization can then align their values, actions, resources, and efforts behind the strategy.
For example, let’s assume that our organization strategy includes becoming more customer centric. To help our clients understand how to break down a strategy, we often use the metaphor of a Rubik’s Cube. If we think of solving the cube as the strategy, each side represents an aspect of the organization such as work processes, structure & governance, information & metrics, people & rewards, continuous improvement, and leadership & culture that need to be aligned to the strategy. When all parts of the Rubik’s Cube are aligned, we can say that the organization is strategically aligned and efforts to implement and execute will be meaningful. Organizations can operate faster when everyone within the organization understands the implications of strategy since members of the organization can focus their resources and adjust at the speed of the market.
This process is painted vividly in a finance department we worked with a few years ago. The department wanted to help with the strategic data and analytics of their firm but regularly had to postpone these activities due to their functional necessities or “have-tos” like compliance reporting and performing audits. Because they did not fully understand the implications of the organization strategy on their department, they could not focus effectively on either the strategic or the functional imperatives. Instead, they tried (unsuccessfully) to do both and couldn’t deliver strategic value to the company in either area.
The other cause the underlies the sentiment “we don’t have a strategy” is related to leadership indecision. The impact of leadership indecision is the same as strategic ambiguity, but it originates from the organization’s leaders not being able to reach consensus, agreement, or alignment around what the company’s strategy should be.
There are a few methods leaders can use to reach consensus and alignment around a strategy. The first involves making trade-off decisions. True clarity around a strategic position comes not from knowing what you will do, but from clearly defining what you won’t do. Clearing your plate of the things that you won’t do can change a group’s perspective and provide needed focus and clarity.
Another method for alleviating leadership indecision comes from a strong leader taking charge and forcing the organization to align around a strategy and agree. In these instances, such a leader champions the work and refuses to let the group swirl. Instead, they hold everyone accountable and stalwartly push the work forward with a “this will happen” attitude. Rarely, does this type of leader advocate a particular point of view, but they strongly insist that the team achieve consensus around something.
A last technique to help leaders reach consensus is to play out certain scenarios to visualize the possible strategic options. Although this method can take more time and resources than the other two, it provides members of the team a more complete picture of what certain strategies might look like and expose potential problems or misfits before any strong commitments are made. Sometimes, seeing how strategy will play out down the road will give indecisive leadership teams the comfort needed to decide and commit.
Much like clarifying strategic ambiguity, the benefits of curing leadership indecision are substantial. In a recent redesign engagement with a financial services organization, the leadership team struggled to understand what their customers wanted and expected. Rather than take the time to understand their customers and make clear and crisp decisions about their strategy, they made big assumptions and rolled out an organization that was based on an underdeveloped strategy. The team soon had to backtrack on their organizational changes and lost critical momentum and credibility. Had this organization taken the time to answer the tough strategic questions and achieve true leadership alignment around their strategy, they could have avoided the painful consequences of jumping forward too quickly.
Although many executives and organization members alike complain that their organizations lack strategy, the reality is that most issues surrounding focus and direction can be ascribed to either a lack of strategic clarity or a lack of leadership alignment. While the consequences of both of these root issues are similar, the solutions are very different and demand separate approaches. Through proper diagnosis, increased clarity, and proper mitigation methods, organizations can define the true root of the feeling that “we don’t have a strategy” and help transform their organizations so they can deliver desired results.
“We don’t have a strategy” – I can’t count how many times this has been a big theme in an org design diagnostic effort. Your breakdown of the likely differences in root cause is a helpful framing to be sure we’re not distracted by the complaint and look closely for what is really generating what looks like lack of strategy. Perception is reality until we help them change their thinking about what might really be the critical gaps.